Jeff Harris Director, Emerging Technologies Market Transformation in Energy Efficiency: A Northwest Perspective Presentation to the 2010 mid-year NASUCA Conference June 14, 2010 San Francisco, CA

2 About NEEA  Non-profit corporation; est in Portland, OR  Funded by electric utilities in MT, ID, OR & WA  Governed by representative Board; public and private utilities, state governments, public interest groups; oversight by State utility Commissions  Five-year funding commitment from 14 direct funders  Total funding 2010 ~ $30 million  50 employees

3 Vision and Mission Vision: Energy efficiency is a cornerstone of a vibrant sustainable Northwest. Mission: Mobilize the Northwest to become increasingly energy efficient for a sustainable future.

4 NW Power Future: Bottom line: All new load growth met with efficiency and renewables

5 Annual Northwest Energy Efficiency Investment Bonneville Power Administration Public Utilities Investor Owned Utilities Northwest Power and Conservation Council State Regulatory Commissions Northwest Energy Efficiency Alliance Energy Trust ofOregon Regional Technical Forum End Use Consumers Markets, Codes & Standards = Policy Recommendations = Technical Recommendations = Program Funding = Conservation Programs = Market Transformation Programs/Projects The “Plan” = Policy = Rate Revenues

6 NEEA Definition of Market Transformation “Market Transformation is the strategic process of intervening in a market to create lasting change in market behavior by removing identified barriers or exploiting opportunities to accelerate the adoption of all cost-effective energy efficiency as a matter of standard practice.”

7 MT is a Process.... Market Assessment MT Hypothesis (Logic Model) MT Intervention Strategy Tactics Implement ation Exit? Evaluate

8 Market Transformation: Strategy Development  The Logic Model:  For each market barrier or opportunity: Barrier B Intervention A Outcome C ENERGY SAVINGS

9 Common Market Barriers Misalignment with consumer needs Lack of Awareness Lack of information Price Poor Availability Consumer Experience Poor channel access to market

10 Market Transformation Strategies Create strategic partnerships Build market knowledge and experience Develop relationships that help influence energy codes and standards Provide credible information Align EE with Consumer Needs

11 Market Transformation in CFLs From this: To this:

12 Diffusion of innovation Theory

13 Diffusion Curve % Market Share Time

14 Diffusion Curve Emerging Tech Early Adopters Baseline (What Occurs Naturally) NEEA Utility Local Programs Primary Role % Market Share Time

15 Diffusion Curve Emerging Tech Early Adopters Baseline (What Occurs Naturally) NEEA Utility Local Programs Primary Role Transformation Market Pulp & Paper DHP Pilot Consumer Electronics Commercial Real Estate Homes Building Ops Food Processing Healthcare Building Design and Construction Energy Savings / Net Market Effect % Market Share Time

16 Diffusion Curve Emerging Tech Early Adopters Baseline (What Occurs Naturally) NEEA Utility Local Programs Cost MWh Primary Role Transformation Market Energy Savings / Net Market Effect % Market Share Time Pulp & Paper DHP Pilot Consumer Electronics Commercial Real Estate Homes Building Ops Food Processing Healthcare Building Design and Construction

17 Diffusion Curve Emerging Tech Early Adopters Codes and Standards Baseline (What Occurs Naturally) NEEA Utility Local Programs Cost MWh Primary Role Transformation Market Energy Savings / Net Market Effect % Market Share Time Pulp & Paper DHP Pilot Consumer Electronics Commercial Real Estate Homes Building Ops Food Processing Healthcare Building Design and Construction

18 Market Transformation Success: CFLs Source: NEEA

19 Market Transformation Success: Clothes Washers Source: NEEA

20 Market Transformation Success: Windows Source: NEEA

21 Market Transformation Results: Overall Significant Savings 556 aMW saved through 2008 (of which 264 are net market effects) Enough to power 182,574 homes each year, or one coal-fired power plant Prior investments continue to achieve cost effective savings (at < 1 cent/kWh) 556 aMW

22 Market Transformation Support Structures % Market Penetration Time Goals Supporting Market Penetration Local energy efficiency program implementation Codes & Standards (G1) Codes & Standards (G1) Market Adoption (G1) Emerging Technologies (G4) Help EE Orgs Achieve Their Goals (G2) Build Knowledge Through Education and Training (G3) Support Region’s Efforts to Promote EE (G5) Regional EE Planning/Implementation (G6)

23 Why you should care: Why is market transformation important for the future?

24 Net-zero buildings will require highly integrated energy efficiency systems and coordination between market actors to deliver buildings that actually perform at a level that is unprecedented; to do otherwise will be very expensive..... Why you should care (continued).

25 Thank You

aMW Savings Targets Estimated 5 and 10 Year Total Regional Savings Estimated 5 and 10 Year Net Market Effects Total Resources Costs cents / kWH NEEA only Levelized Costs cents / kWH 100 aMW is enough to power 69,000 homes each year

27 NEEA’s Unique Value  Fill pipeline of emerging technologies  Deliver regional leverage with “upstream” market actors  Realize economies of scale  “Lock in” savings through codes and standards  Expand regional market capability  Avoid resource duplication  Mitigate risk

28 How NEEA Works PARTNER SERVICES COMMERCIAL INDUSTRIAL RESIDENTIAL EMERGING TECH

29 Estimated Budget Allocation:

30 Support and maintain a regional upstream delivery platforms for energy-efficient products and services Residential Key Initiatives:  New Construction – reduce market barriers, influence voluntary programs/labels and set the stage for code upgrades  Consumer Electronics – initial focus on flat-screen TVs  Ductless Heat Pumps – pilot demonstrating energy savings potential  Lighting – Continued focus on CFL purchase research  TopTen USA – highlighting the most energy-efficient products

31 Simultaneously build demand for and supply of energy efficient products and services in select markets. Commercial Key Initiatives:  Hospitals/Healthcare & Real Estate – Helping organizations use Strategic Energy Management to become more energy efficient  Building Market Skills/Capacity – provide resources, training and tools to design and building operations communities  80 PLUS – encourage and track growth of energy-efficient power supplies for computers

32 Industrial Work to set industry-wide goals, encourage individual organizations to adopt Strategic Energy Management and coordinate regionally. Key Initiatives:  Collaborative Energy Strategies -- working on an industry-wide approach with the food processing industry to setting goals and increasing efficiency  Strategic Energy Management – Support companies in integrating energy management into their company cultures  Regional Coordination – partnerships with stakeholders that help develop market ready offerings

33 Codes and Standards Locking in regional savings through codes and standards Codes & Standards Voluntary energy efficiency programs Time Market Penetration

34 Emerging Technologies Upcoming Initiatives:  Residential Heat Pump Water Heaters  Regional Advisory Committee  Net Market Effect: 0 aMW by 2014; 5aMW by 2019  Portfolio Target: 300 aMW Total Regional by 2030 Provide a mechanism for the region to invest in emerging technologies in a way that minimizes risks to any one funder and maximizes potential benefits.

35 Upcoming Initiatives:  Develop a website/ information services portal  Create promote online forum/collaboration tools  Hire and deploy a circuit rider  Coordinate regional conference/ events  Coordinate training/ workshops Partner Services Support the region’s efforts to promote energy efficiency through market research, collaboration and information sharing.

Deregulation Codes and standards accelerate Climate change awareness Northwest $60M Northwest $ M NEEA $20M Economic Challenge Climate Change Increased EE Investment and Awareness Northwest Ramp to $1-$2B NEEA $25M NEEA ~$40M Annual Northwest Energy Efficiency Investment

37 Market Transformation Accomplishments 1990 Today 2007 : CFL sales top 18 million 2001 : Market share for ENERGY STAR windows hits 75% : VFD cold storage fans reduce energy use by 61-86%. 1997: Efficient washers. 50% market share today - highest in the nation : 80 PLUS. computer power supplies could save NW 8.5 million kWh annually : BacGen reduces wastewater treatment energy use by up to 50% : NEEA Launched 2004 : Northwest ENERGY STAR new homes spec – 15% more efficient than code : NW Food processing industry commits to 50% reduction goal 2009 : Ductless heat pump pilot begins 2005 : BetterBricks healthcare focus – today 30% of region’s beds have adopted a SEMP.

38 About NEEA Funding  ~$192M from (doubling)  Bonneville Power Administration (on behalf of ~130 publics)  Public (Direct Publics): 6  IOUs: 5  Energy Trust of Oregon Board Oversight and Supporters  State governments  Energy industry representatives  Public interest groups Team:  Deep bench of expertise  42 full-time staff  National and local partners  Extensive contractor base Results  – 264 aMW netted  Enough to power cities of Spokane and Tacoma each year Mission  Mobilize the Northwest to become increasingly energy efficient for a sustainable future