mckinsey-Clusters of opportunity emerge.ppt

McKinsey Company TRACKER Unit of measure 1 Footnote SOURCE: Source Title Unit of measure Working Draft - Last Modified 4/22/2010 4:59:26 PM Printed 11/30/2009 1:16:33 PM | Document type Date CONFIDENTIAL AND PROPRIETARY Any use of this material without specific permission of McKinsey Company is strictly prohibited * 0 Percent, 100% = 9,100 trillion BTUs of end-use energy efficiency potential Source: Energy Information Agency’s Annual Energy Outlook 2008; McKinsey analysis Clusters of opportunity emerge Industrial Total (Trillion BTUs) Energy support systems Energy-intensiveindustry processes Non-energy intensive Industry processes * * * * N = 330,000 enterprises 40 Commercial Total (Trillion BTUs) Existing private buildings Government buildings New private buildings Office and non-commercial equipment Communityinfrastructure * * * * * * N = 4.9 million buildings,~3 billion devices * Residential Total (Trillion BTUs) Existing non-low income homes Existing low-income homes New homes Electrical devices small appliances Lighting major appliances * * * * * * N = 129 million homes,2.5 billion devices * * 10 Source: McKinsey analysis Barriers Structural Agency issues Transaction barriers Pricing distortions Ownership transfer issues Behavioral Risk and uncertainty* Awarenessand information Custom and habit Elevated hurdle rate Availability Adverse bundling Capital constraints Product availability Installationand use Solution strategies Information flow Educate users on energy consumption Promote voluntary standards/labeling Establish pricing signals Capital outlay Increase availability of financing vehicles Provide incentivesand grants Raise mandatory codes + standards Support 3rd-partyinstallation Addressing barriers in non-low income homes Educate users on energy consumption Promote voluntary standards/labeling Competing uses for a constrained budget Capital constraints Limited availability of contractors Product availability Improper