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EXECUTIVE SUMMARY

Saarbrucken is located in the Saar River Valley along the French border in the heart of Germany’s coal country, adding a healthy touch of color and irony to Saarbrucken’s extraordinarily progressive energy platform. Despite the fact that the City sits on hundreds of years worth of coal, the City and its utility, Stadtwerke Saarbrucken, view coal as a "transitional fuel" which must be replaced with highly-efficient and non-polluting power supplies (through advanced power plants and district heating), energy efficiency, and renewable energy resources. In each of these areas, Saarbrucken has become a European and international leader.

The basis for Saarbrucken’s success with promoting efficiency has been its financing program called The Participation Program. This program provides positive monthly cash flow for participating customers while shifting the burden of the cost of energy efficiency from the utility’s balance sheet to consumers. Stadtwerke Saarbrucken works with local banks to aggregate customer loans, then guarantees the loans against default, and by doing so has been able to buy-down loan interest rates for its customers. To date the banks have lent close to $22 million while the utility’s cost of administering the program has been on the order of $2.2 million.

Bolstered by its successful financing program Stadtwerke Saarbrucken has realigned its rate structures and now offers 14 discrete energy efficiency programs that range from consumer education programs to energy conservation diagnostic services and incentive programs. For instance, more than 15,000 information requests are handled annually by the downtown Info-Center E. The Heat Passport Program provides lower electricity rates for customers that can prove low energy intensities. The utility provides rebates for purchasing energy-efficient appliances and incentives for converting from electric to gas water heating. A pilot program is focused on school lighting and school gymnasium lighting retrofits in particular.

Saarbrucken’s efforts with solar energy are also exemplary. In addition to retrofitting each of its community pools Stadtwerke Saarbrucken’s Solar Rooftop Program is intended to install photovoltaic arrays on approximately 1,000 homes throughout the City. To date over 130 systems have been installed. The utility has also invested in a future concept home in Ensheim where the entire roof of the home is covered with photovoltaic panels owned by the utility!

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EXECUTIVE SUMMARY

Norway is a country blessed with abundant energy resources, awash in hydroelectricity, or what Norwegians call "the clean energy," as well as North Sea oil and gas. Norway’s energy self-sufficiency is the envy of many other energy-strapped countries. What makes this profile so intriguing is that Oslo Energi and the City of Oslo have pioneered the use of an innovative revolving fund to promote energy efficiency that may well become an internationally-acclaimed model for the finance of energy efficiency, but which ironically has been generally underutilized in Oslo itself.

The Ekon Fund established by the City of Oslo in 1982 has proven to be an elegant mechanism for providing and facilitating a pool of capital for retrofits. The Fund was developed by applying a small surcharge on each kilowatt-hour sold in Olso. (The Fund has been supported with a 0.16 ¢/kWh surcharge, equal to 2.9% of average electricity rates.) This "fresh" capital, plus interest earned on the balance and oustanding loans, has created a fund of significant magnitude.

To date the Ekon Fund has enabled approximately 20,000 customers within Oslo to engage in efficiency retrofits that have resulted in 2,528 GWh of energy savings. These projects have cost a total of over $110 million. In its "banner years" the Fund saved 65 GWh, 59 GWh and 62 GWh annually. Ironically, the Fund has been challenged by its success as its primary shortcoming has been its own inability to grant and loan money fast enough. Its current balance of approximately $100 million U.S. dollars (577 million NOK) has become highly attractive to politicians keen on reallocating the money for other social programs. But for now, the City has decided to guard the Fund against such uses and maintain its capital for its original purpose: energy efficiency retrofits.

The Oslo Ekon Fund is the primary focus of this profile and represents a brilliant financing mechanism for energy efficiency that may be best transferred to other jurisdictions for a number of reasons. Energy efficiency is typically driven by high prices, which Oslo does not have. Efficiency is driven by shortages of power, which Oslo does not have. Finally, energy efficiency is driven by concerns about the security of future power supplies, and this is not a Norwegian concern either! Thus the mechanism and the full service orientation of the Fund make a good deal of sense and may be successfully replicated elsewhere, but the Fund has been proportionately less successful in Norway,... one of the Northern Hemisphere’s great energy anomalies!

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EXECUTIVE SUMMARY

Copenhagen is a leading city in terms of energy efficiency, and like other European leaders profiled by The Results Center, its efforts have been broad and have spanned supply-side efficiency, the aggressive promotion of district heating, energy efficiency initiatives, renewable energy developments, and transportation. Together these efforts are providing a framework for Copenhagen’s commitment to carbon dioxide reductions and to decreasing its dependence on foreign energy supplies. In fact, in 1991 Denmark as a whole became self-sufficient in its oil and gas use as compared with 1973 when it imported 100% of its oil.

Copenhagen’s largest singular achievement with energy management has been the construction of what will become the largest district heating system in the Western world. This network now supplies 67% of the space heating demands of the City, and when complete in the year 2002 will supply fully 95% of the space heating demands of Copenhagen.

The City of Copenhagen has implemented demand-side management programs using an approach that is based on energy advisory services. This approach underscores the City’s commitment to provide its energy customers with appropriate price signals and then to inform its customers that energy efficiency upgrades are in their best interest. Thus the ultimate costs of efficiency are borne by the customers and the total costs of DSM are moved off the utility’s balance sheet. Nevertheless, the City projects that these services will provide 265 GWh annually by the year 2005.

Like the City of Oslo, Norway, (See Profile #79) The Copenhagen Lighting Department collects revenues to fund its efficiency efforts through the use of a small surcharge, equal to less than half a percent of the current average kWh rate, applied to every kilowatt-hour sold. These resulting funds have been used to hire skilled energy engineers who prepare detailed energy surveys of the City’s largest energy consumers and to support the downtown energy center and its staff, plus various energy efficiency campaigns.

While the overall picture of responsible energy use in Denmark is epitomized by Copenhagen’s comprehensive initiatives, the City is plagued by the erosion of savings that challenges energy efficiency initiatives around the world. Despite high prices and a series of factors intended to discourage automobile use, it is nevertheless on the rise in Copenhagen. Similarly, the dramatic influx of waterbeds in Denmark has created a demand for electricity that is greater than the entire country’s wind generation capability! Thus the model presented in Copenhagen, which provides for a host of innovative and progressive policies and practices, is complete with challenges and opportunities that will be watched carefully by countries similarly committed to carbon dioxide reductions in the coming years.

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EXECUTIVE SUMMARY

Pacific Gas & Electric’s Model Energy Communities (MEC) Pilot program, what has been commonly called "The Delta Project," was a research initiative that not only serves as a model for a new and innovative form of demand-side management, but which also has provided a host of important lessons learned. The project was conceived to test the opportunity to use DSM as a localized least cost resource, thereby deferring the need for the capital expansion of transmission and distribution systems.

The region served by The Delta Project is largely residential (a classic "bedroom community") with some 25,000 homes, the vast majority of which are owned by two-income families that work in San Francisco or Oakland and return home at the end of the day. At that time, and especially when temperatures exceed 105° F, the homeowners concurrently turn on their air conditioners creating a localized spike in demand. While The Delta Project sought to contain this needle peak through energy efficiency measures, a key lesson learned was that load management options, such as appliance cycling in particular, may have provided a more expeditious means of fulfilling the Project’s load shape objective.

The Delta Project was not only ambitious in scope and purpose, but also needed to be implemented quickly to fulfill its basic purpose of substation deferral. The Project was implemented in approximately 18 months in a geographically succinct area focused on the proposed Lone Tree substation. It was designed to assess whether DSM could be a cost effective alternative to substation construction; to determine whether intense marketing and direct install program delivery could result in desired levels of savings by triggering high participation and penetration levels; and to assess customer acceptance of such a strategy.

Many rich lessons were learned by PG&E program staff: First and foremost, the project did serve to defer the construction of the Lone Tree substation, although disaggregating the program’s effects from other factors such as the depressed new residential construction market and weather patterns was complex. Second, the program succeeded in delivering a host of DSM measures in a short time frame. This, however, was not without difficulty. PG&E also learned an important lesson about the homogeneity of neighborhoods and thus their relative lack of end-use and end-use consumption diversity. Perhaps most importantly, The Delta Project highlights the litany of unanticipated factors that relate to such a program design, knowledge which can now be used to help program designers to develop effective T&D deferral programs in the future.

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