Making the Business Case for Investing in Energy Efficiency ...

Making the Business Case for Investing in Energy Efficiency, Management and Productivity 8th Clean Energy Ministerial June 6 , 2017

About the BCSE • The Business Council for Sustainable Energy (BCSE) is a coalition of companies and trade associations from the energy efficiency, natural gas and renewable energy sectors. • The Council advocates for policies at state, national and international levels that: • increase the use of commercially-available clean energy technologies, products and services • support an affordable, reliable power system • reduce air pollution & greenhouse gas emissions

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US energy overview: The economy is more energy productive than ever

2016

2014

2012

2010

2008

2006

2004

2002

2000

1998

1996

1994

1992

1990

1.9 1.8 1.7 1.6 1.5 1.4 1.3 1.2 1.1 1.0 0.9

GDP (indexed) Primary energy consumption (indexed)

● Energy productivity continues to rise: in 2016, GDP rose 1.6% while total primary energy consumption fell by 0.2%. Source: US Energy Information Administration (EIA), Bureau of Economic Analysis, Bloomberg Terminal Notes: Values for 2016 energy consumption are projected, accounting for seasonality, based on latest monthly values from EIA (data available through October 2016). GDP is real and chained (2009 dollars); annual growth rate for GDP for 2016 is based on consensus of economic forecasts gathered on the Bloomberg Terminal as of January 2017. © Bloomberg Finance L.P. 2017. Developed in partnership with The Business Council for Sustainable Energy.

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US energy overview: Electricity generation mix 100%

80% 60%

8%

9%

11%

10%

22%

22%

24%

24%

19%

20%

20%

20%

13%

12%

13%

13%

25%

31%

28%

28%

19% 19%

19%

20%

48%

44%

45%

42%

15%

33%

34%

19% 19%

40% 49%

14%

20%

Oil 37%

39%

39%

33%

30%

Coal

2016

2015

2014

2013

2012

2011

2010

2009

2008

2007 ●

Natural gas

Nuclear

0%

●

Renewables (including hydro)

Natural gas has eclipsed coal as the largest contributor to the US electricity mix, hitting 34% in 2016. Coal sank to second place, providing 30% of the mix – its lowest share on record. Since 2007: coal’s share plummeted from 49% to 30%, while natural gas’s grew from 22% to 34% and renewables from 8% to 15%.

Source: EIA Notes: Values for 2016 are projected, accounting for seasonality, based on latest monthly values from EIA (data available through November 2016). In chart at left, contribution from ‘Other’ is not shown; the amount is minimal and consists of miscellaneous technologies including hydrogen and non-renewable waste. The hydropower portion of ‘Renewables’ includes negative generation from pumped storage. © Bloomberg Finance L.P. 2017. Developed in partnership with The Business Council for Sustainable Energy.

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US energy overview: Greenhouse gas emissions, power sector, energy sector and economy-wide (MtCO2e) 8,000

3,000 GHG emissions from power sector only

Total (gross) GHG emissions, 2005-2016e

7,500

2,500

7,000

Obama's target, 2020 2,000

Total GHG emissions, 1990

1,500

GHG emissions from energy sector, 1990-2016e

2020

2018

2016

2014

2012

2010

2008

2006

2004

2002

2000

1998

2020

2018

2016

2014

2012

2010

2008

2006

2004

2002

2000

1998

0

1996

4,000 1994

500

1992

4,500

1990

● ●

1,000

1996

5,000

1994

5,500

1992

6,000

1990

6,500

US GHG emissions are at their lowest levels in 25 years, falling to an estimated 6.5GtCO2e in 2016, 12% below 2005 levels. In 2016, power-sector emissions shrank 5.3% year on year, bringing them to 24.1% below 2005 levels.

Source: Bloomberg New Energy Finance, EIA, EPA Notes: ‘Sinks’ refer to forests and green areas which absorb carbon dioxide. Values may differ from last year’s, due to recalculations and revisions published by the EPA, primarily to methane emissions. Values for 2016 are projected, accounting for seasonality, based on latest monthly values from EIA (data available through October 2016). ‘Obama’s target’ refers to a pledge made in Copenhagen climate talks in 2009. The target shown here assumes 17% reduction by 2020 on 2005 levels of total GHG emissions, but the actual language of the announcement left vague whether the reductions applied to economy-wide emissions or just emissions of certain sectors. Data for total GHG emissions comes from EPA’s Inventory of US Greenhouse Gas Emissions and Sinks (1990-2014), published April 2016. Data for CO2 emissions from the energy sector comes from the EIA’s Monthly Energy Review.

© Bloomberg Finance L.P. 2017. Developed in partnership with The Business Council for Sustainable Energy.

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US energy overview: Energy as share of total US personal consumption expenditure Electricity and natural gas as a share of total consumption expenditure 2.5%

Total energy goods and services as a share of total consumption expenditure 10%

Electricity 2.0%

8%

1.5%

6%

1.0%

4%

Natural gas

0.5%

2%

0.0% 1960 65

0% 1960 65

●

●

70

75

80

85

90

95 2000 05

10

15

70

75

80

85

90

95 2000 05

10

15

Americans are dedicating less of their household spending to energy than at any other time on record: energy consumption as a share of total consumption expenditures averaged 3.9% in 2016, the first year in which this measure came in below 4% since at least 1959. Consumption costs for natural gas and electricity reflect a similar trend: natural gas represented under 0.4% of total spending, and electricity came in at 1.4%, both the lowest totals on record.

Source: Bureau of Economic Analysis, Bloomberg New Energy Finance Notes: Values for the fourth quarter of 2016 are preliminary. © Bloomberg Finance L.P. 2017. Developed in partnership with The Business Council for Sustainable Energy.

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Finance: Corporate procurement of clean energy and energy efficiency Key players: corporate clean energy procurement Retail

●

Manufacturing

Insurance

Automotive s

Tech

Hospitality

Manufacturing

Other

Financial &

●

Key players: corporate energy efficiency

Corporate clean energy procurement has continued to gain momentum. 83 companies have pledged to source 100% of their energy consumption from renewables by signing onto the “RE100” initiative. Notable signees include Apple, BMW, HP, Johnson & Johnson, Kingspan, and P&G. Google also announced in 2016 that it is on track to meet this milestone by 2017. Corporations are also increasingly taking action on energy efficiency, with more companies adopting ISO 50001, an energy management systems standard for reducing costs and carbon emissions. The US Department of Energy Superior Energy Performance program, which certifies facilities that have implemented the ISO 50001 standard, continued to expand in 2016: new buildings certified include multiple facilities from Schneider Electric and 3M, and the JW Marriott in Washington, DC. In addition, the new “EP100”, an initiative where companies pledge to double their energy productivity, launched in early 2016. Member companies include Johnson Controls and Swiss Re.

Source: Bloomberg New Energy Finance, company announcements, DOE. Note: The key corporate energy efficiency players displayed here are drawn from EP100 members and the list of ISO 50001 certified facilities. ISO 50001 certification means that a company has met established efficiency standards at one or more of its facilities. © Bloomberg Finance L.P. 2017. Developed in partnership with The Business Council for Sustainable Energy.

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Panelists • Kateri Callahan, President, Alliance to Save Energy • Clay Nesler, Vice President, Global Sustainability and Industry Initiatives, Johnson Controls • Bill Sisson, Sr. Director, Sustainability, UTRC, United Technologies Corporation • Mike Thompson, Global Director, Refrigerant Applications, Ingersoll Rand • Harry Verhaar, Head of Global Public & Government Affairs, Philips Lighting • Nellie Cheng, Managing Director, China, US Green Building Council • Elizabeth Pei, Director, Corporate Affairs, Schneider Electric China

Energy Productivity: The First Fuel for Meeting NDCs Kateri Callahan President, Alliance to Save Energy CEM8 | June 6, 2017 www.ase.org

IEA Climate Bridge Scenario

www.ase.org

Energy Efficiency: America’s Greatest Resource A Quiet History of Huge Success!

U.S. Energy Resources Used in 2014 Energy Efficiency and Conservation Petroleum Natural Gas Coal Nuclear Power

Biomass Hydroelectric Wind, Geothermal, and Solar Other -5

0

5

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60

Quads

Energy Savings

www.ase.org

Production and Net Imports: EIA 2014 Data EEC Estimate: ACEEE

Domestic Production

Net Imports

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Setting Bold Goals Drive Policy Action: United States

1970-2010: Historical; 2011-2030: Projected Sources: All data taken from U.S. Energy Information Administration 2011 Annual Energy Review, 2012 Annual Energy Outlook and 2017 Annual Energy Outlook

www.ase.org

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The world’s most influential companies commit to doubling energy productivity

www.ase.org

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Public Private Collaboration for Energy Efficiency Clay Nesler Vice President, Global Sustainability and Industry Initiatives, Johnson Controls Email: [email protected] Twitter: @ClayNesler

Johnson Controls —

U.S. DOE Better Plants and EP100

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SEforALL Building Efficiency Accelerator

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US-China CERC-BEE Consortium

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Making the Business Case for Investing in Energy Efficiency, Management and Productivity CEM8 Side Event

June 6, 2017

© United Technologies Corporation

This document contains no technical data subject to the EAR or the ITAR. UTC Proprietary - This material contains proprietary information of United Technologies Corporation. Any copying, distribution, or dissemination of the contents of this material is strictly prohibited and may be unlawful without the express written permission of UTC. If you have obtained this material in error, please notify UTRC Counsel at (860) 610-7948 immediately.

Our Brands

Iconic brands delivering the smart, sustainable solutions the world needs

UTC PROPRIETARY - This page contains no technical data subject to the EAR or the ITAR.

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Why Energy Efficiency in Buildings? An energy & climate imperative 20% global GHG

A business opportunity for growth, which remains largely untapped

A top market opportunity to deliver the UN Sustainable Development Goals with a potential value of US$555770 billion (business revenues and savings) by 2030. 23 UTC PROPRIETARY - This page contains no technical data subject to the EAR or the ITAR.

A tested action-oriented business collaboration model Bringing together the value chain in local markets… EEB Laboratory (3-day workshop)

… to overcome market barriers • Awareness and leadership • Workforce capacity • Financing • Policy and regulation

... to drive market activity & innovation EEB platforms:

24 UTC PROPRIETARY - This page contains no technical data subject to the EAR or the ITAR.

Running title UTC PROPRIETARY - This page contains no technical data subject to the EAR or the ITAR.

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Energy Efficiency in Buildings – EEB Amplify Private sector engaging with local stakeholders and officials to stimulate demand for financially viable energy efficiency investments

26 UTC PROPRIETARY - This page contains no technical data subject to the EAR or the ITAR.

Our Global Footprint Manufacturing, Distribution & Office Locations

America

384 Climate 75 Industrial 24 Corporate

World-Class Talent in Every Market More than 40,000 employees globally

Europe, Middle East, India, and Africa


Asia Pacific


Global Footprint and Ingersoll Rand Locations We have a total of 867 facilities around the world, including 51 manufacturing facilities worldwide.27

Ingersoll Rand Climate Commitment

Ingersoll Rand is helping to solve some of the world’s most pressing challenges – including the unsustainable demand for energy resources and impact on greenhouse gas emissions

EcoWise™ Portfolio The EcoWise™ portfolio of products represents an exclusive set of products that, through low GWP refrigerant use and energy efficiency, enable our customers to lower their operational GHG footprint. EcoWise™ products : 1. Are more efficient than minimum energy efficiency standards 2. Contain refrigerant that has a GWP < 700 - or – a greater than 50% GWP reduction than the standard - and – is next generation (olefin-based) 3. Provide a material benefit to the customer

.

Thermo King truck and trailer refrigeration

Trane Series E CenTraVac

Trane Sintesis air-cooled chiller

2015 Introduction Establishes our market leadership and provides industry with a viable path forward

Recent EcoWiseTM Projects Emissions Reductions Through Efficiency and Low GWP Refrigerants Efficiency and process improvements Hospital Breclav (Czech republic)

Efficiency and process improvements Ferrero chocolate factory – Stadtallendorf, Germany Efficiency and Sustainability improvements FAURECIA – Tarazona, Spain

Efficiency and noise solution of Maria Pia Hospital – Turin, Italy

Efficiency and process improvements City of Sultan – Sultan, Washington

Eurotunnel Reduces Energy Costs by 40% Commercial HVAC EMEA – Tunnel, France Efficiency and process improvements “Nouvel Hopital Civil” – Strasbourg, France Efficiency Improvement IKEA – Aubonne, Switzerland

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Global trends

50%

increase in Light Points in 2030 compared to 2006

30 October 2014

31

3 2

Improvement in Lighting Energy Productivity

30 October 2014

32

3 3

Need to double the rate of EE improvement! 1. Accelerate renovation of existing infrastructure

30 October 2014

2. Leapfrog to most efficient technology for new infrastructure

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Case study

Enabling a comfortable, productive and sustainable environment at The Edge ‘The Edge’, Deloitte and AKD, the Netherlands

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The LED Revolution: ‘Everybody wins’ 50-70% energy & cost saving Carbon footprint reduction Improving peoples lives Benefits beyond illumination

30 October 2014

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John Ferraro Building Los Angeles Dept. of Water and Power

Leading Energy Management and IOT with Innovation At Every Level

Elizabeth Pei, Director at Schneider Electric (China)

Confidential Property of Schneider Electric

Schneider Electric, the Global Specialist in Energy Management and Automation

€26.6Bn

~ 5%

~160K+

FY 2015 revenues

of revenues devoted to R&D

people in 100+ countries

Confidential Property of Schneider Electric | Page 42

when life is… ENERGIZED • +50% energy consumption by 2050 due to urbanization, industrialization, digitization

Electricity to grow twice faster than energy consumption

• 2.3 bn people do not have

EFFICIENT •3X

efficiency needed to solve climate change

• 82% of untapped energy efficiency in buildings • 50% of untapped energy efficiency in industry

CONNECTED • 10X more incremental connected devices than incremental connected people by 2020

• 30 bn connected things by 2020 • Software runs everything

either access or reliable access to electricity

Schneider makes life Safe, Reliable, Efficient, Sustainable and Connected


Sources : Industry Reports

We have an opportunity to co-create the future

More

More

More

More

ELECTRIC

DIGITIZED

DECARBONIZED

DECENTRALIZED

Efficiency gains will come from IT/OT convergence


- Data Center - Building - Grid - Industry

EcoStruxure

Cloud and/or On Premise

End to End Cybersecurity

Building


Data Center

Industry

Apps, Analytics & Services Edge Control

Connected Products

Grid

The direction of Schneider China is closely following that of China’s economy

New-Type Urbanization

One Belt, One Road

Made in China 2025

• Urbanization is the engine stimulating domestic demand and spurring economic growth.

• Infrastructure construction leading to Chinese companies increasingly “going global”.

• Staying with innovation-driven, intelligent restructuring and green development.

• Urbanization is accelerating industrial structural transformation and upgrades

• Contributing to China’s industrial upgrade and boosting economic restructuring.

• Promoting the strong integration of IT in industrialization with intelligent manufacturing as the main focus of direction.


在互联互通的产品层构建创新

.

CNBM & Schneider Electric in Belt & Road

• July, 2015, under the witness of Premier Li Keqiang and French President Francois Hollande, Schneider Electric signed the MOU with CNBM (China National Building Material Group) under the “China-France agreement to co-develop the third-party market” • Background:

• 65% of the cement in "Belt and Road" countries are provided by China. • Cement production is highly energy-intensive • CNBM is the 2nd largest producer in the world. Energy consumption >60% of total costs.

• What we do: smart technologies to help CNBM lower its energy use • Energy Saving Potential: per International Energy Agency, energy costs can be reduced by 18% with the best-available technologies.
