TRANSCRIPT OF THE PODCAST ON ENERGY EFFICIENCY AND ENERGY SAVING MEASURES

Hi. My name's Brian Castelli. I'm the Executive Vice President and Chief Operating Officer of the Alliance to Save Energy in Washington, DC. I'm here today to talk a little bit about energy efficiency and how valuable it can be. How valuable it can be here in Ukraine, as well as how valuable it is, frankly, anywhere in the world.

I guess one of the first topics to think about, also, in addition to the energy efficiency, would be biofuels, because biofuels are going to be, I believe, a very important part of the energy equation in the coming years. Biofuels are made from biomaterials such as fast growing switch grass or fast growing poplars to corn to rapeseed to many other, sugar cane for example, and all these are great bio-fuels. Woody biomass is good, and in the future we're going to be seeing a lot of cellulosic products. In other words, not made particularly from a food crop, but made from the waste from food crops, which is even going to be better, because then we'll have a market, an additional market for the farmers, and at the same time, not be increasing the demand for food products. So biofuel is a real interesting and active part of the, I think, global energy strategy that we'll see in the future.

Companies that produce other fuels, oil companies and those that sell gasoline or produce gasoline, are now becoming interested in biofuels at all because they realize that they need to be more than just an oil company. They need to be a full service fuel provider, whatever that provider is. So I think that we're going to see biofuels in the future. We'll see biofuels being made into synthetic gas. We'll see a whole bunch of different things, and I think this is going to be a real exciting era in the future, and one that will give us a diversity of fuels and a diversity of homegrown fuels. There's biomass here in Ukraine. Ukraine's known for the fertile soils, its forest products, and I think that it's going to be a natural here to have it, just as it's going to be a natural in other countries, such as the U.S., Canada and other places. I think there's a lot of potential here, and I think that the people in Ukraine should be thinking about biofuels as a way to get ahead here in this new energy world that we're going to see.

Energy efficiency is also something that's been around a long time, but it's getting more prominence now as we see other fuel prices increase, and that's going to be the big driver here, I believe. Demand is up all over the world for different fuels. The populations in China and India, the two most populous countries in the world, are looking to drive demand way up for all kinds of fuels: natural gas, oil, and others. So, energy efficiency is going to play a key role in meeting that demand, and also in keeping the price of those fuels at a very good level. So I see energy efficiency as playing a critical role in the energy future of not only the United States or Ukraine, but of all the countries.

So, how do we get energy efficiency? Does it apply to residential consumers? Does it apply to commercial consumers? Does it apply to industrial consumers? The answer to that question is yes, it does apply to all three of those sectors, and all three of those sectors could be large users of energy efficiency.

Energy efficiency programs have been carried on for a number of years in the United States. For the last thirty years the United States has been decreasing its energy use per person. We're still one of the most energy intensive consumers in the world, and currently we use about 100 quadrillion BTUs (British Thermal Unit) of primary energy every year. However, over the last thirty years, had we not had energy efficiency, we would be using 143.5 quadrillion BTUs of primary energy. Energy efficiency, it turns out, is the largest of all of our energy resources in the United States. It's larger than oil. It's larger than coal. It's larger than natural gas. Energy efficiency is a key and critical element of any country's national energy strategy.

Energy efficiency is the cheapest, cleanest, and fastest way to get energy into the system. Utilities now are starting to embrace energy efficiency as a way to meet their future demand, because energy efficiency is much cheaper than any other generating source. Energy efficiency, in the United States, is often in the 2 cent to the 3.5 cent per kilowatt hour, whereas coal is in the 4-4.5 cent area, wind is in the 4.5-5 cent price area. So, energy efficiency all of a sudden becomes an important part of a utilities resource program.

In fact, in California and in the State of Washington, they have a loading order, called a priority loading, and before any energy utility company can provide any traditional generation, it first has to look at energy efficiency and do all the energy efficiency measures that are economically viable. Then as a second step in the priority loading, it has to look at renewable energy and do all the renewable energy that's economically viable. And finally third, they can rely on traditional, conventional sources. So with policies like that, we're seeing much more energy efficiency being driven in to the market place and I think that's a critical area.

Industrial consumers are also facing high prices of natural gas. Chemical companies and others use natural gas not only to fire boilers and for process manufacturing, but also they use it as a feedstock for plastics, for drugs, for other products, and when the price of natural gas gets high, they need help. So, by doing energy efficiency programs, they can help lower the demand, and when you lower the demand, you lower the price.

So we have an awful lot of things that we can be thankful for that energy efficiency can do. The benefits of energy efficiency far outweigh the costs, and over the lifetime, they are always cheaper than any other way to get a fuel resource into the economy.