Emerging Developments In Energy Efficiency And Government Policy

Transcription

1 Emerging Developments In Energy Efficiency And Government Policy Jeremy Eaton, VP, Honeywell Energy Solutions Richard Graber, VP, Honeywell Government Relations EMEA

2 Honeywell.com Forward Looking Statements This report contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of All statements, other than statements of fact, that address activities, events or developments that we or our management intend, expect, project, believe or anticipate will or may occur in the future are forward-looking statements. Forward-looking statements are based on management s assumptions and assessments in light of past experience and trends, current economic and industry conditions, expected future developments and other relevant factors. They are not guarantees of future performance, and actual results, developments and business decisions may differ from those envisaged by our forward-looking statements. Our forward-looking statements are also subject to risks and uncertainties, which can affect our performance in both the near- and long-term. We identify the principal risks and uncertainties that affect our performance in our Form 10-K and other filings with the Securities and Exchange Commission. 1

3 Energy Is Our Business Air Traffic Modernization Biofuels Green Buildings Reduced Emissions Nearly 50% of Honeywell s Product Portfolio is Linked to Energy Efficiency. The U.S. Could Reduce Their Energy Consumption By 20 25% Simply By Immediately & Comprehensively Adopting Existing Honeywell Technologies. Fuel Efficiency Industrial Process Efficiency Energy Efficiency, Demand Response & Smart Grid Energy Performance Contracts 2

4 Energy Efficiency Across ACS Innovative, Game-changing Products and Solutions Clinton Climate Initiative Energy Performance Contracts Smart Grid Wins Major Energy Savings and Emissions Reductions for Homes, Buildings, and Industrial Applications 60% of Products & Services Related to Energy Efficiency Global Leader In Delivery Of Energy Efficiency 3

5 Honeywell.com U.S. Energy Consumption Industry (gas) 32% Buildings (electricity) 40% Residential 22% Heating 31% Water Heat 12% Cooling 12% Lights 11% Refrigeration 8% Electronics 7% Wet Clean 5% Cooking 5% Computers 1% Other 4% Transportation (oil) 28% US DOE Buildings Handbook, 2008 Commercial 18% Lights 26% Heating 14% Cooling 13% Water Heat 7% Ventilation 6% Office Equipment 6% Refrigeration 4% Computers 3% Cooking 2% Other 13% Building Automation Can Control 66% Of Energy Use In Homes And Buildings 4

6 Honeywell.com A Smart Combination Honeywell Can Quickly and Effectively Address Existing Challenges By Linking Energy Efficiency (EE) + Demand Response (DR) Using Less Pays More 5

7 Honeywell.com Global Drivers Of Energy Efficiency Region Example Drivers Honeywell Offerings North America Cost Deferred maintenance PUC Mandates Sustainability ESPC, Retrofits HUS Turnkey Programs Remote Optimization Act!Earth Europe China Australia India Middle East Cost Sustainability (e.g., CRC) 5-Year Plan Target Energy Reliability Cost NABERs Regulation Cost (e.g., Diesel Backup) Energy Reliability Energy Reliability Regulation ESPC, Retrofits Audits Retrofit Automated DR Remote Optimization ESPC, Retrofits Retrofits Automated DR Automated DR Remote Optimization 6

8 Honeywell.com Clinton Climate Initiative: Expanding ESPC Globally Clinton Climate Initiative (CCI) Background Kicked Off By President Clinton at the C-40 Cities Summit in NYC in May of 2007 Goal to Improve Energy Efficiency and Reduce Greenhouse Gas Emissions in the Worlds Major Cities Utilizes U.S. Energy Performance Contract Process Honeywell was One of the First 4 Energy Service Companies (ESCO s) to Sign On to the Effort. Honeywell CCI successes Key Wins to Date for Honeywell Have Included: - Seoul - London - Hong Kong - Melbourne - Macau - India - Malaysia - Puerto Rico In Each Case Opening New Markets for EPC in Those Cities/Countries and Driving Almost $50M in New Orders. 7

9 Honeywell.com Smart Utilities State Grid of China Customer Background - Largest Utility in the Country and World - $600 Billion Investment Over 10 Years to Construct a Robust Smart Grid Demand Side Management - Published Measures in November Encouraged to Build System to Control 10% of Peak Load - Goal: Reduce Grid Electricity Sales Volume and Peak Demand By 0.3%; U.S. $1 Billion Reduction Auto DR Pilot Collaborative Effort - Pilot Project Co-supported By State Grid EPRI and U.S. Trade & Development Agency Proof of Concept - Testing Impact of Automated Demand Response (Auto DR) for Shedding Load in Commercial and Industrial Facilities Feasibility Study - Evaluate Price and Reliability of DR Strategies - Assess Environmental, Social and Business Impact 8

10 Honeywell.com Australia: Diving Efficiency In Commercial Sector NABERS Background NABERS Energy Annual Rating of a Building s Actual Energy Performance On a 5 Star Scale Benchmark for Measuring Relative Green Performance of Commercial Office Buildings Competition to Attract Good Tenants Has Driven Demand for NABERS Ratings Improvements State and Federal Governments Supporting Adoption Through - Minimum Ratings for Government Tenancies (4-4.5 Star Minimum Requirement) - Mandatory Disclosure of Ratings By Owners Honeywell NABERs Success: 530 Collins NABERS Energy Rating Improved From 2.5 Stars to 4.5 Stars and On a Trajectory to Achieve 5 Stars Honeywell Performance Guarantee Covers the NABERS Rating, Energy Use, Energy Cost Savings and Comfort Conditions Grid-synchronized Co-generation System for Low Carbon Electricity, Space Heating and Water Heating Energy Efficient Control Strategies, New High Efficiency Chillers and Water Efficient Cooling Towers Daily Tracking of NABERS Rating with Honeywell Energy Dashboard A $6.8M Project Completed in 9 Months with No Disruptions to Tenants 40% Cut in Base Building Energy Consumption 9

11 Honeywell.com Honeywell Activity Leading DR Charge 1 Million+ Residential Devices Installed Commercial and Industrial Gaining Traction Combining EE and DR Negawatts Permanent or Temporary Are the Cheapest Source of Energy Fills Intermittency Gap From Solar and Wind Investing for Success Strategic Acquisitions e.g., Akuacom and E-Mon Smart Grid Ready Solutions an Integral Part of Roadmap Participating in the Development of Open Standards Growing Globally Launch of Smart Grid Investment Grant Projects Winning New Projects in China and Other Countries 10

12 Energy Efficiency: A Goal Of Governments Around The World

13 Energy Efficiency Energy Efficiency Is Core to Government Strategies Worldwide: Promote Sustainable Growth Ensure the Security of Energy Supply Reduce Emissions of Greenhouse Gases and Other Pollutants Meet Long-term Energy and Climate Goals 12

14 U.S. Energy Efficiency Initiatives The American Recovery and Reinvestment Act Wherein More Than $80 Billion Has Been Dedicated to Building a Smarter Electric Grid and Expanding Capacity for Clean Energy Technology More Stringent Energy Efficiency Standards for Commercial and Residential Appliances The Recovery Through Retrofit Program Which Promotes Innovative Financing Options to Reduce Upfront Retrofit Costs for Consumers and Requires Straightforward Information About Energy Use in Homes 13

15 Examples of Initiatives Around the World China Committed to Medium and Long Term Plan for Energy Conservation National Development and Reform Commission Issued the Plan in 2004 Establishing a System for Monitoring, Evaluating and Public Reporting of Energy Intensity Eliminating or Reducing Production From Inefficient Industrial Processes, Technologies and Facilities Strengthening Energy Conservation Laws, Regulations and Standards (e.g. More Aggressive Enforcement of Building Codes) Promoting Energy Efficiency in Government Agencies India National Mission to Enhanced Energy Efficiency Adopted By Prime Minister s Council On Climate Change Goal: To Save 5% of Annual Energy Consumption and Nearly 100 Million Tons of Carbon Dioxide Each Year Assigns Energy Efficiency Targets to the Country s Most Energy-intensive Industrial Units and Allows Them to Retain Improvements in Areas of Targets in the Form of Energy Savings Certificates (ESCerts) Energy Service Companies are Promoted (Pilot Project is Underway with the Goal of Replicating It Across the Country) 14

16 European Commission s Energy Efficiency Plan 2011 Selected Highlights of the Plan: Steering Public Spending Towards Energy Efficient Products Helps to Reduce Public Authorities Expenditure On Energy Bills Energy Performance Contracting is an Important Tool in the Refurbishment of Buildings Energy Service Companies Deliver Energy Efficiency Improvements, Accepting Financial Risk By Covering or Helping to Finance Upfront Investment Costs and Refinancing This Through the Savings Achieved. They Can Help Public Authorities Upgrade Buildings By Grouping Them into Scalable Projects Under Energy Performance Contracts The Commission will Strengthen the Basis for National Grid Regulators to Take Energy Efficiency into Account in Their Decisions 15

17 UK s Green Deal What is the Green Deal? Proposed UK Energy Bill (Dec 2010) Included Provision for a New Green Deal Under the Green Deal, Government Will Establish a Framework to Enable Private Firms to Offer Consumers Energy Efficient Improvements to Their Homes and Businesses at No Upfront Cost and to Recoup Payments Through Energy Bill Surcharges To Qualify for the Green Deal, Expected Savings in Typical Properties Consuming a Normal Amount of Energy Must be Equal to or Greater Than the Cost of the Energy Savings Measures Installed Golden Rule 16

18 Solutions For All Green Deal Categories Heating, Ventilation and Air Conditioning Building Fabric Lighting Water Heating Microgeneration Global Energy Services Honeywell Can Help The EU Solve Its Energy Challenge...And Create Jobs 17

19 Honeywell Solutions In The Home Category Measures Honeywell Solutions Heating, Ventilation and Air Conditioning Condensing Boilers, Heating Controls, Underfloor Heating, Heat Recovery Systems, Mechanical Ventilation (Non-domestic) and Flue Gas Recovery Devices SEDBUK A Rated High Efficiency Boiler Energy Efficiency Heating Controls Building Fabric Lighting Water Heating Microgeneration Cavity Wall Insulation, Loft Insulation, Flat Roof Insulation, Internal Solid Wall Insulation, External Solid Wall Insulation, Draught Proofing, Heating System Insulation (Cylinder, Pipes) and Energy Efficient Glazing Lighting Fittings and Lighting Controls Innovative Hot Water Systems and Water Efficient Taps and Showers Ground and Air Source Heat Pumps, Solar Thermal, Solar Photovoltaic (PV), Biomass Boilers and Micro-CHP Energy Efficient Insulation Foam Ground and Air Source Heat Pumps Solar Photovoltaic (PV) Organic Rankine Cycle (ORC) Cogeneration Key: Black = Honeywell Offering, Gray = No Honeywell Offering 18

20 Honeywell Commercial Solutions Category Measures Honeywell Solutions Heating, Ventilation and Air Conditioning Building Fabric Condensing Boilers, Heating Controls, Underfloor Heating, Heat Recovery Systems, Mechanical Ventilation (Non-domestic) and Flue Gas Recovery Devices Cavity Wall Insulation, Loft Insulation, Flat Roof Insulation, Internal Solid Wall Insulation, External Solid Wall Insulation, Draught Proofing, Heating System Insulation (Cylinder, Pipes) and Energy Efficient Glazing Building Energy Management Systems (BeMS) and Devices Energy Efficient Insulation Foam Lighting Lighting Fittings and Lighting Controls LED Utility Lighting Lighting Control Retrofit Systems Building Energy Management Systems (BeMS) and Devices Water Heating Microgeneration Energy Services Innovative Hot Water Systems and Water Efficient Taps and Showers Ground and Air Source Heat Pumps, Solar Thermal, Solar Photovoltaic (PV), Biomass Boilers, Micro-CHP and Demand Response EPC, Energy Retrofit, Energy Monitoring and Sustainability Ground and Air Source Heat Pumps Solar PV Organic Rankine Cycle (ORC) Cogeneration Automated Demand Response Energy Performance Contracting Energy Retrofit Energy Monitoring and Behavioral Awareness Services Key: Black = Honeywell Offering, Gray = No Honeywell Offering, Blue = Honeywell Suggested Additional Category 19

21 Summary Energy Efficiency is a Focus for Governments Around the World Honeywell is Well Positioned to Provide EE Solutions that Help Enable: Ambitious Energy and Climate Goals Sustainable Economic Growth Security of Domestic Energy Supply Government Focus On Energy Efficiency Creates Incremental Opportunities for Honeywell for Decades to Come 20