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2007 ACEEE Market Transformation Symposium

March 20, 2007

Katharine KaplanENERGY STAR Product Manager:

Consumer Electronics & Office Equipmentkaplan.katharine@epa.gov

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Growing Concern over Energy Consumption

• Times are changing: investors, insurers, and the public are taking a serious interest in energy and the environment

• Here are just some of the signs…

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U.S. Energy Security & Supply Challenges

• U.S. reliance on foreign oil continues to climb– 1973—35% oil imported; 2003—56% imported; 2025 projection—

68% imported– U.S. demand for oil projected to grow 37% in next 20 years [1]

[1] Deutch, Philip J. “Think Again: Energy Independence.” Foreign Policy November/December 2005. http://www.foreignpolicy.com/users/login.php?story_id=3262&URL=http://www.foreignpolicy.com

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U.S. Energy Security & Supply Challenges

• A Council on Foreign Relations Independent Task Force determined: “The lack of sustained attention to energy issues is undercutting U.S. foreign policy and national security.” [1]

• Rise in Chinese oil imports is squeezing supplies and driving crude prices up– From 2000-2005, China’s energy consumption grew by 60% [2]

– China’s increasing oil ties with Iran could complicate U.S. interests and influence in Middle East

[1] Deutch, John; Schlesinger, James R.; Victor, David G. “National Security Consequences of U.S. Oil Dependency.” Council on Foreign Relations October 2006. http://www.cfr.org/publication/11683/

[2] Downs, Erica. “The Brookings Foreign Policy Energy Security Series: China.” The Brookings Institution December2006. http://www.brookings.edu/fp/research/energy/2006china.pdf

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Region 2003 Average Price

(cents/kWh)

2005 Average Price

(cents/kWh)

Percentage Change

New England 11.7 13.43 14.79%

Mid-Atlantic 11.6 12.51 7.84%

South Atlantic 8.11 8.84 9.00%

East North Central 8.16 8.44 3.43%

West North Central 7.43 7.81 5.11%

East South Central 6.76 7.42 9.76%

West South Central 8.66 10.01 15.59%

Mountain 7.97 8.68 8.77%

Pacific Contiguous 9.9 10.06 1.62%

Pacific Non-contiguous

14.96 17.74 18.58%

Average Electric Utility Prices by Region for 2003 versus 2005

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State Responses to Tight Electric Markets

• Tight electric markets leading to surge in proposed coal plants – ~150 plants proposed

• Cost of Super Critical Pulverized Coal plants soaring – 50-100% increase in capital cost (w/o considering carbon)

• Coal electricity now 8-12¢/kWh in many markets

• New coal could lock in high-cost electricity and emissions for 35-50 years

From R. Neal Elliott, Presentation on “Energy Market Outlook for 2007, ACEEE.

• 2006: An Inconvenient Truth becomesthe 3rd highest grossing documentary of all time

• 2007: Wins an Academy Award for Documentary feature

• Increased media attention bring “resurgence in commitment to environmentalism”– Newsweek, E-Magazine,

HGTV, Business Wire

• U.S.’s greening is:– Bottom-up (not top-

down/ or federal government-driven)

• And driven by:– Voter reaction to

intense weather events, especially hurricane Katrina

– Energy security worries– Political changes

(Schwarzenegger doing well)

– Businesses who recognize the inevitability of emission controls

February 2007

9July 2006

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Fashion retailer Diesel launches “Global Warming Ready” ad campaign. Left: catching rays on the shores of…Mount Rushmore?

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How much do U.S. consumers currentlyspend to power their electronics products?

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Space Heating11%

Miscellaneous30%

Cooling14%

Water Heating8%

Lighting17%

Appliances20%

Summary of National Residential Electricity Consumption by End Use for 2006

Miscellaneous Motors29%

Miscellaneous Heating

24%

Miscellaneous Electronics

47%

In 2006, U.S. national residential electricity consumption was projected to total 1,353 TWh. Electronics products, grouped under miscellaneous, accounted for 14% of total residential electricity consumption. End Use Consumption Estimate is from EIA's Annual Energy Outlook 2006, Report #:DOE/EIA-0383(2006)

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Summary of National Residential Electricity Consumption by End Use for 2020

Space Heating10%

Miscellaneous37%

Cooling13%

Water Heating7%

Lighting17%

Appliances16%

Miscellaneous Motors26%

Miscellaneous Heating

21%

Miscellaneous Electronics

53%

By 2020, U.S. national residential electricity consumption is projected to total 1,691 TWh. Electronics products, grouped under miscellaneous, will account for 19% of total residential electricity consumption.

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Summary of Dollars Spent per Household on Electricity by End Use for 2006

Space Heating, $121

Miscellaneous, $326

Cooling, $161Water Heating, $89

Appliances, $221

Lighting, $191

Miscellaneous Electronics,

$153

Miscellaneous Motors, $96

Miscellaneous Heating, $78

In 2006, the average U.S. household was projected to spend $1,111 annually on household electric bills. About $153, or 14% of this, was spent on power consumption for electronics products.

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Summary of Dollars Spent per Household on Electricity by End Use for 2020

Miscellaneous Electronics,

$218

Miscellaneous Heating, $84

Miscellaneous Motors, $107

Space Heating, $115

Cooling, $150

Water Heating, $77

Appliances, $184

Lighting, $194

Miscellaneous, $410

In 2020, the average U.S. household is projected to spend $1,129annually on household electric bills. About $218, or 19% of this, will be spent on power consumption for electronics products.

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Impacts on Consumer Spending/Purchasing Decisions

• 47% of consumers plan to spend less on discretionary items like HDTVs, PCs, and major appliances, due to higher energy and gas bills*

• 88% of consumers agree “somewhat” to “completely” that it is important for household appliances, electronics, heating/cooling systems, and lighting products to have the ENERGY STAR label **

• 80% of consumers rate energy efficiency as important to their purchase decisions**

• 6% of consumer spending was projected to be accounted for by energy prices by the end of 2005,#

which is higher than any point in the last decade

* Mary Ellen Lloyd, Dow Jones Newspapers, as appeared in the online edition of the Wall Street Journal. “Best Buy, Circuit City Down: Angst Over Consumers Continues” (July 12, 2006)** Understanding the LOHAS Consumer Report, The Natural Marketing Institute, 2004 # Daniel Chung and Zachary Karabell; Alger Market Commentary, as it appeared in the online edition of Forbes Magazine. “Energy Costs Drain Joe Six-Pack” (September 30, 2005)

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Summary of CEA’s CE Energy Consumption Study

• Excluding digital TVs, CE products consumed about 147 TWh of electricity in U.S. homes in 2006

• Nationally, CE electricity consumption was 11%of total residential consumption– EPA’s estimate for CE electricity consumption in 2006

is about 14% • CEA and EPA’s estimates fairly similar,

considering digital TVs not included by CEA– Analog TVs accounted for 36% of the total 147 TWh

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2006 CE Residential Energy Consumption (CEA Estimates)Consumer Electronics Product

CategoryEstimated Annual Energy

Consumption (TWh)Television – analog 53

PC – desktop 21Other 17

STB – cable 10STB – satellite 9.0

Monitors 7.6Compact Audio 6.2Cordless Phone 5.0

VCR 5.0DVD Player 4.4

PC – Notebook 2.8Video Game 2.4

Home Theatre in a Box 2.2TAD 0.9

STB – PVR 0.4

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What Does All This Mean?

• Consumers care about energy efficiency– 78% of survey respondents state that ENERGY STAR

certification is very or somewhat important for electronics* – 79% of survey respondents said they would look to a

national home appliance store such as Best Buy to purchase energy-efficient products**

– 95% of recent purchasers of qualified product are likely to purchase an item with the ENERGY STAR mark in the future*

• Manufacturers and the efficiency community must work together to:– Educate consumers about the energy implications of their

purchasing decisions and empower them with the knowledge to make the best possible choices

* National Awareness of ENERGY STAR: Analysis of CEE Household Survey Data** Energy Pulse 2005, the Shelton Group

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Potential Energy Implications of Home Networking

• Short-term: Adding network ability generally increases power consumption of products– Leads to increased ‘on’ time– Products/components added solely to support a networked

environment– Behavior of a single product on the network can greatly affect

energy use of other products • Long-term: Improved communication protocols between

products could enable substantial savings– Designing for networked infrastructure and interoperability from

the onset; establishing interoperability standards – Taking best advantage of increased sensors, displays, processing

and tracking abilities to optimize energy used and inform user of potential savings

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Potential Energy Implications of Product Convergence

• Short term: Energy usage could go either way, depending on whether products are designed with energy consumption in mind– Stakeholders must engage in discussions early in the

product development process to ensure energy savings

• Long term: Will reduce sheer number of technologies as well as standards that products must meet– Could reduce interoperability incompatibilities that

currently increase energy use

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Other Considerations

• Improve communications between products to optimize energy usage; routine activity shouldn’t keep product awake

• Maintain network presence in sleep mode• Incorporate these as built-in feature for products

and avoid need for user configuration• Make efficiency work while minding security

needs

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Potential Energy Implications of Product Convergence

• At a fork in the road right now

We are literally at a fork in the road…..

Where does that leave us now?

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Wide Diversity of Products-Look for Common Solutions

• Consumer electronics products are diverse in number, offering an array of features and functionality

• Use of many common components allows manufacturers and efficiency community to understand many products before they enter the market:– Power supplies– Processors– Memory– Displays– Network connections– Charging mechanisms

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ENERGY STAR Can be a Solution for Savings: External Power Supplies

• Developed specification with Australia, China, California, EU (Code of Conduct)

• Specification qualifies models with high active efficiency and low no-load power loss

• 57 partners signed on – Companies from Brazil, China, Finland,

Germany, Hong Kong, Japan, South Korea, Taiwan, United Kingdom, and USA

• 755 individual models and 50 product families with 245 models qualified, overall 1,000 qualified EPSs

• Tier 2 levels on the horizon • Applications

– Required in all new ENERGY STAR specifications including imaging & IT

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ENERGY STAR Can be a Solution for Savings: Internal Power Supplies

• Internal power supply requirement in new finalized specification for computers – Effective July 20, 2007– Products covered: notebooks, desktops, desktop-derived

servers, game consoles and workstations– Internal Power Supplies (IPS) must have a minimum efficiency

of 80% at 20%, 50% and 100% and PFC of 0.9

• 80 PLUS program utility rebate program (www.80plus.org)– 131 certified designs

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80 PLUS® Certified Power SuppliesJan. 2005 – Feb. 2007

0

20

40

60

80

100

120

140

2005Q1

2005Q2

2005Q3

2005Q4

2006Q1

2006Q2

2006Q3

2006Q4

2007-Q1(as of Feb-

21st)

Tota

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AcBelAkasaAntecAutecAVNETC&D TechnologiesCeletronixChannel Well TechnologyCoolerMasterCrown Young IndustriesDellDeltaEnermaxEnhance ElectronicsERSFairchild SemiconductorFSP GroupHECHewlett-PackardHigh PowerHiProLogisys ComputerON SemiSeasonicSilverStone TechnologySolytechSparkle PowerSystem General CorporationTaganTopowerYesico

Manufacturers (31)

6 914

17

3441

88

119

131

Date Certified

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ENERGY STAR Can be a Solution for Savings: Functional Adder Approach

• EPA understands there is no ‘one-size-fits all’ approach for electronics– As specifications are developed/revised, a category’s

unique characteristics are considered• Certain features increase the product’s power

consumption, but also add important functionality for the user

• EPA recognized this in the recently finalized Imaging Equipment specification by granting an additional power consumption allowance for some enhanced functionalities, such as wireless connections or additional memory

Product Category Current Spec & Effective Date Spec Revision/Tier II Development Plans

Battery Charging Systems Version 1.0; January 1, 2006 None

External Power Supplies Version 1.1; January 1, 2005 Tier 2 expected to take effect in 2008

Telephony (e.g., Cordless Phones)

Version 2.0; November 1, 2006 None

DTAs (Digital TV Adapters) Version 1.0; January 31, 2007 None

Complex Set-top Boxes Spec development launched in March 2007; effective date TBD

Currently under development

TV/VCR Tier 3 of Version 2.2; July 1, 2005 Version 3.0 currently under development; expected to be finalized Fall 2007 and take effect July 2008

Audio/DVD Tier 2 of Version 1.0; effective January 1, 2003.

None

Monitors Tier 2 of Version 4.1; January 1, 2006

Revision being considered now

Imaging Tier 1 of Version 1.0; April 1, 2007

Tier 2 expected to take effect April 1, 2009

Computers Tier 1 of Version 4.0; July 20, 2007

Tier 2 expected to take effect January 1, 2009

Summary of Current CE and OE Product Specs

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How Can Efficiency Programs Maximize Savings Opportunities?

• Educate consumers about the energy implications of their electronics purchases

• Work with manufacturers to encourage efficiency early in the product design process-don’t wait until products are baked

• Provide resources for research to ensure more efficient products reach the market-Think Big

• Look at full menu of mechanisms• Engage with industry when product standards are

being developed by manufacturing stakeholder-groups to ensure energy consumption is addressed

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Contact Information

Katharine Kaplan ENERGY STAR ProgramU.S. EPAkaplan.katharine@epa.gov(202) 343-9120www.energystar.gov