PREPARED REMARKS BY BOB PERCIASEPE
PRESIDENT, CENTER FOR CLIMATE AND ENERGY SOLUTIONS
INNOVATIVE FINANCE & CLEAN POWER, A SOLUTIONS FORUM
JUNE 25, 2015
Welcome everybody and thank you for being here. I especially want to thank our co-host for today’s event: The George Washington University Law School’s Environment and Energy Program.
My name is Bob Perciasepe and I’m president of the Center for Climate and Energy Solutions, or C2ES.
I think many of you know us, but for those of you who don’t, we’re an independent, nonpartisan, nonprofit group dedicated to bringing diverse interests together to solve our climate and energy challenges.
Today is a perfect example of how we go about doing that. We’re going to be talking a lot about energy efficiency and renewable energy – and how innovative financing can help us increase investment in those areas. I’m pleased to be bringing together top financial experts from Bank of America, JPMorgan Chase, and the Coalition for Green Capital; state leaders from Tennessee and Pennsylvania; and energy leaders from Schneider Electric and Duke Energy. I think this group in itself shows you the mix of people who have to start working harder together to make sure we can make progress on clean energy and energy efficiency.
Finance may or may not have been your favorite class in college, but much of the progress we need to address our climate challenge – more efficiency and more low-carbon energy -- comes down to one question: How do we pay for it? Financing and using markets are ways to accelerate the rate of change.
On the other side of the coin, we’re already paying mounting costs worldwide for climate impacts like increasingly frequent storms and intense heat waves. We’re seeing rising sea levels creating higher risk in coastal areas. We face the prospect of more damage to our infrastructure and more disruptions to our supply and distribution chains, as well as our power and water supplies.
The primary cause of these problems, and you can take this all the way to the Vatican, is us. We’ve been pumping heat-trapping gases into the atmosphere for generations. Last year was the hottest since we started keeping records over 100 years ago.
But we know that there are things we can do. We know what some of the solutions are. We know how to make progress within a generation to change that trajectory. We need cleaner energy, cleaner cars, and more efficient ways to use energy.
Here in the United States, the No. 1 source of carbon emissions is the generation of electricity. EPA is in the process of finalizing a plan that will put a lot of responsibility on states to look at how they can innovate to develop clean power plans to reduce emissions from electric generation. We already have a process underway with light duty vehicles and heavy duty trucks, making them more energy efficient. And we have a lot of opportunity to think about how to do this at the state level for power.
The beauty here is while we continue to think about how to deal with this at the national level, cities and states and businesses are already innovating. They’re already making progress not only in reducing emissions but also in finding ways to accelerate the rate of change and stimulate innovation.
Of course, we want not just clean energy, but also affordable energy. This is a balance we have to have. We’re seeing solar and other renewables drop in price, something that can continue with increased deployment. Efficiency reduces how much energy we use, so that even if there’s a slight uptick in rates, a homeowner’s bill can stay the same.
The objective of having cleaner power and also using less of it provides a real opportunity to find that sweet spot of maintaining that affordability. It’s like what we’re looking at with automobiles. If you use less fuel, the actual cost to own the car is cheaper. The same can be said of energy efficiency in the home, business, and industry.
C2ES found something interesting on affordability when we recently looked at six economic modeling studies of the Clean Power Plan. All of the models project energy efficiency will be the most-used option to implement the plan. The majority of the studies project either cost savings to consumers or total costs of less than $10 billion a year, Per household, that’s about 25 cents a day.
So, how do we get to this future of affordable clean energy and energy efficiency? It takes investment, and that’s what we’re here to explore. How do we catalyze that investment? How do we leverage public funds to get more private dollars? What innovative business models are already working, and how do we scale those up?
It’s not simple. We face some barriers to investment like high upfront costs. If you invest in new windows and solar panels for a high rise, it will take a while to recover those costs in lower energy bills. Another barrier is lack of familiarity. People aren’t sure about new technologies and new financial products, which can make them harder to buy and sell.
Fortunately, there are ways to overcome these barriers. We have a brief overview of some of these options. I’ll mention two: Clean Energy Banks, sometimes called Green Banks; and Energy Savings Performance Contracts.
Clean Energy Banks are generally government-created institutions that can leverage a small amount of public money to increase private investment in clean technologies. Several states have them or something like them – Connecticut, New York, Kentucky, and Hawaii. And others, like Maryland, California, and D.C are thinking about them.
They can provide direct loans, but they also have other tools, such as credit enhancements, letters of credit, and loan loss reserves, that can help lower the risk for private lenders and investors.
So far, Connecticut’s green bank, the nation’s first, has attracted about $9 of private investment for every $1 of public money invested in clean energy projects. The bank oversees more than $100 million in assets.
The second example is an Energy Service Company, or ESCO, whose business model is based on establishing Energy Savings Performance Contracts with customers like cities, hospitals and universities. These contracts let a customer get energy-saving or clean-energy technology at little to no upfront cost. They pay the investment back over time from the money saved through reduced energy bills.
The City of Knoxville, Tennessee, has a 13-year energy performance savings contract that will fund energy efficiency measures at all city buildings, parks and sports facilities. Each year, Knoxville will pay the ESCO a fee based on expected savings from things like better lighting, water conservation, weatherization, and heating and cooling upgrades.
Innovative financial tools are not a panacea, but they are an essential tool to overcoming many of the barriers facing a new technology. They can also engage a broader group of investors, bring more capital to the table, and reduce costs. Those are the conditions that allow new technologies to spread.
The Earth is undoubtedly warming. What’s the cause, what are the impacts, and what can we do about it?
Below is a list of resources to learn more about the impacts of climate change, what individuals can do to help, and which policies can make a big difference
What are the Impacts of Climate Change?
The Earth is warming and will continue to do so if we keep releasing greenhouse gases into the atmosphere. This warming brings an increased risk of more frequent and intense heat waves, higher sea levels, and more severe droughts, wildfires, and downpours. To learn more:
What can you do to help?
C2ES works to help individuals learn how they can save energy at work, school, and home. Learn some of the steps you can take to make an impact:
What would make a huge difference?
Sensible policies can spur demand for clean energy and technologies and reduce carbon emissions cost-effectively. Learn about some of the options:
Key Insights from a Solutions Forum on
By Jason Ye
Energy efficiency is a critical component of the proposed Clean Power Plan. It offers states a least-cost pathway for reducing carbon dioxide emissions from the power sector. A C2ES Solutions Forum held May 18, 2015, brought together city, state, and business leaders to explore how intelligent efficiency can drive reduced energy usage and emissions under the rule.
Among the questions C2ES discussed at this event:
- What is intelligent efficiency and how can it reduce costs and emissions?
- Can intelligent efficiency also help with reliability?
- What role will energy efficiency play in the Clean Power Plan?
- What are some cities, states and businesses doing right?
- What role can cities, states, and businesses play together in using energy efficiency to implement the Clean Power Plan?
- What would help cities and states use energy efficiency under the Clean Power Plan?
- Why would a utility want to sell less of its product – electricity?
C2ES will continue the conversation with cities, states, and businesses to share insights and innovative ideas that will help us get to a clean energy future. Our third Solutions Forum on June 25 will explore innovative ways to finance clean energy technology and infrastructure.
For more information about the C2ES Solutions Forum, see: http://www.c2es.org/initiatives/solutions-forum
Energy efficiency can be an attractive way for states to meet the plan’s targets because, in addition to being relatively inexpensive to deploy on its own, energy efficiency reduces the need to build new, costly power plants in the future.
C2ES examined six economic modeling studies that project the likely impacts of the Clean Power Plan on the U.S. power mix and electricity prices. Despite starting with different assumptions, all of the studies project that energy efficiency will be the most used and least-cost option for states to implement the plan, and that overall electricity consumption will decline as a result.
The majority of the studies project either cost savings to power users under the Clean Power Plan or increases of less than $10 billion a year. That translates to less than $87 a year per household, or about 25 cents a day.
|C2ES President Bob Perciasepe moderates a Solutions Forum panel with (l to r): Steve Harper, Global Director, Environment and Energy Policy, Intel Corporation; Alyssa Caddle, Principle Program Manager, Office of Sustainability, EMC; and Lars Kvale, Head of Business Development, APX Environmental Markets.|
Our second Solutions Forum focused on how to spur more energy efficiency, especially through “intelligent efficiency” — a systems-based approach to energy management enabled through networked devices and sensors.
States have an array of policy options to reduce carbon emissions from power plants. In the first of a three-part clean power series, C2ES brings together state leaders and industry experts to explore market-based approaches to efficiently and effectively implementing EPA's proposed Clean Power Plan.
April 15, 2015
9:00 a.m. – 12:00 p.m.
Capitol View Conference Center
101 Constitution Ave. NW
Washington, DC 20001
(Doors open at 8:30 a.m.)
Watch video of Bob Perciasepe and state officials.
Watch video of business leaders' discussion.
Director, Rhode Island Department of Environmental Management
Director, Virginia Department of Environmental Quality
Director of Environmental Programs, Colorado Department of Public Health & Environment
Vice President, Environmental Management and Resources, DTE Energy
Government Affairs and Corporate Social Responsibility, Holcim (US) Inc.
Director of Energy and Environmental Policy, Duke Energy
Senior Manager, Federal Government Affairs, Exelon
Senior Fellow, Brookings Institution
Professor, Stanford Law School
President, Center for Climate and Energy Solutions
PREPARED REMARKS BY BOB PERCIASEPE
PRESIDENT, CENTER FOR CLIMATE AND ENERGY SOLUTIONS
DRIVING ENERGY EFFICICIENTY WITH IT, A SOLUTIONS FORUM
MAY 18, 2015
I want to welcome everybody to today’s session. My name is Bob Perciasepe, and I’m president of the Center for Climate and Energy Solutions, or C2ES. We are an independent, nonpartisan, nonprofit organization dedicated to bringing together diverse interests to find solutions to our climate and energy challenges.
Today is a good example of what we try to do. We’re pleased we’re able to bring together a forward-thinking utility executive like Ralph Izzo from PSEG; leaders from innovative companies like Intel, EMC, NEST, and APX, and state and city pioneers in efficiency and sustainability from Illinois, Minnesota, and Philadelphia.
And we’re excited that the Energy Foundation and the Digital Energy and Sustainability Solutions Campaign, or DESSC, are helping sponsor some of this work.
We’re here to talk about energy efficiency and the key role it will play as cities and states look to reduce power plant emissions under the Clean Power Plan.
Energy efficiency is a pretty simple thing to contemplate. Every one of us has probably done something in our lives to be more efficient. And yet when it comes to electricity, we still have significant gaps in our efficiency. We continue to waste more energy than we need to in this country and in the world.
We waste energy when we produce it, when we transmit it, and when we use it. It would be like going grocery shopping and leaving a bag of food at the store, throwing a couple of bags out the window as you’re driving home, and dropping a couple of bags on your front lawn. Then you get in the house and you’ve got one bag left. Now of course, that is an exaggeration, but it shows all along the way there’s loss.
When we waste energy, we waste money. If we save energy, we can save money and reduce our emissions. All of these impacts affect both our environment and our economy.
So, there are three things that I think we need to address. One is, energy efficiency should be a key strategy for reducing power plant emissions under the Clean Power Plan both for economic purposes as well as environmental purposes. Second, information and communications technology can help us achieve energy efficiency and that’s going to be a key part of what we’re talking about today. And finally it’s going to take cities, states, and businesses working together to make this happen. That’s why we have the group of people we have today with us to talk about that.
The proposed EPA Clean Power Plan is something that’s on the front burner for a lot of states, cities and companies in the energy business. The plan sets targets for states to reduce power sector emissions, but gives them incredible flexibility in how to meet those targets. It’s clear that energy efficiency will be a key tool in the toolbox.
C2ES has a new report examining six economic modeling studies that project the likely impacts of the proposed plan. All of the models project that energy efficiency will be the most-used option to implement the Clean Power Plan -- because it’s the least-cost option. We could see an overall decline in the demand for electricity over time while maintaining our quality of life and all of the goals we have for the use of electricity.
Also, the majority of the studies we examined project either savings to power consumers or costs of less than $10 billion a year. To put that in context: That means implementing the Clean Power Plan would cost each household about 25 cents a day.
So, how do we get to this more energy-efficient future?
We have the technology – right now – that can help us be significantly more energy-efficient. We’re going to hear more today about intelligent efficiency. This is a systems-based approach looking at that drive back from the grocery store. How can you keep from leaving bags at the store or losing them while you’re driving home or forgetting them on the front lawn? How can technology and intelligent efficiency help, whether it’s networked devices, sensors, or smart grids? And how can we measure and verify that the energy savings efforts are credible?
Some estimate intelligent efficiency could help America cut energy use by nearly a quarter in just a few years. We’d be reducing greenhouse gas emissions. And we’d be throwing a lot fewer dollars out the window.
We looked at what the federal government can do by deploying more information and communication technologies across federal agencies, and we estimated the government could save more than $5 billion in energy costs.
Finally, if we have all of this great technology, why aren’t we using more of it?
We need the right policies, regulations, and incentives to integrate this technology and accelerate its deployment.
Cities, states and companies are going to be important in this whole arena. How do we bring together the businesses that are innovating in energy and efficiency with the cities and states that are implementing programs in those areas? It’s not self-implementing. It doesn’t just happen. There has to be way to get a larger penetration of these technologies.
Innovative partnerships and programs are going to be important going forward. Cities, states, and businesses can work together -- to promote energy efficiency, and help deploy the information technology that can make it cheaper, easier, and maybe even more fun to save energy.
Nobody likes waste. And yet when we produce, distribute and use electricity, we’re wasting up to two-thirds of the energy.
Although we can’t eliminate all of these losses, we could reduce waste and increase reliability through “intelligent efficiency”— technology like networked devices and sensors, smart grids and thermostats, and energy management systems.
If we used energy more efficiently, we’d also reduce the harmful carbon dioxide emissions coming from our power plants — and reduce our electric bills.
That’s why energy efficiency is expected to be a critical, low-cost path for states looking to reduce power plant emissions under the proposed Clean Power Plan.
C2ES is pulling together top experts in sustainability, efficiency, and technology from cities, states and business to explore how we can deploy intelligent efficiency to help reach Clean Power Plan emissions targets. (RSVP for our event Monday, May 18, in Washington, D.C.)
Just as technology can instantly connect us with people across the globe or monitor our calories and whether we’re burning enough of them, we have technology that will allow us to network and monitor how we produce, deliver and consume electricity.
Key Insights from a Solutions Forum
By Jason Ye
States will have tremendous flexibility to choose how to reduce carbon emissions under the Clean Power Plan. One idea states are exploring is putting a price on carbon. The first C2ES Solutions Forum — held on April 15, 2015 — brought together legal and economic experts, state environmental directors, and business leaders to explore the potential use of market mechanisms to reduce these damaging emissions efficiently and cost-effectively.
For more information about the C2ES Solutions Forum, see: http://www.c2es.org/initiatives/solutions-forum
Key insights and highlights from the event on carbon pricing and clean power include:
- Most economists agree that the most efficient way to address climate change is to put a price on carbon.
- The U.S. Environmental Protection Agency (EPA) has given states tremendous flexibility to determine the best way to achieve emission targets.
- Virtually every state is already engaged in some activity that reduces emissions.
- Market-based options available under the proposed Clean Power Plan go beyond creating or joining a cap-and-trade program or instituting a carbon tax.
- States and businesses generally agree that market mechanisms are a proven, least-cost way to reduce emissions.
- States believe support from the business community will be essential to adopting market-based options.
- State and business leaders recognize the need to talk to one another about the best way to reduce emissions.
- States are concerned about having enough time to develop market-based policies.
- State and company representatives see a role for EPA to help states after the Clean Power Plan is finalized.
C2ES will continue the conversation with states and businesses to share insights and innovative ideas that will help us get to a clean energy future. Our second Solutions Forum on May 18 will explore improving energy efficiency, which reduces emissions, through information and communication technologies. Our third event on June 25 will examine how to finance clean energy technology and infrastructure.
|C2ES President Bob Perciasepe moderates a Solutions Forum panel with (l to r): Martha Rudolph, Director of Environmental Programs, Colorado Department of Public Health & Environment; David Paylor, Director, Virginia Department of Environmental Quality; and Janet Coit, Director, Rhode Island Department of Environmental Management.|
States will have tremendous flexibility to choose how to reduce their carbon emissions under the Clean Power Plan, and one idea they should explore is putting a price on carbon.
The Center for Climate and Energy Solutions (C2ES) recently brought together legal and economic experts, state environmental directors, and business leaders to explore the potential to use market mechanisms to reduce these damaging emissions efficiently and cost-effectively.
Here are three key insights from this Solutions Forum: