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									    THE U.S. HIGH-TECH INDUSTRY
                 AND
       ELECTRICITY DEMAND


                     AeA (American Electronics Association)
                        Electronic Industries Alliance (EIA)
                   Information Technology Industry Council (ITI)

High-Tech Energy
Working Group
                             OUR OBJECTIVES




      • Clarify the role of high tech in U.S. electricity demand picture

      • Highlight potential of our products as part of energy solution

      • Understand Administration perspective, scope of pending report

      • Explore next steps




                                                                           2
High-Tech Energy
Working Group
                               OVERVIEW



   • U.S. high-tech industry drives job creation and economic growth

   • Electricity used in high-tech manufacturing

   • High-tech companies committed to energy conservation

   • Electricity used by high-tech products

   • The Internet potential

   • Back–up data

                                                                       3
High-Tech Energy
Working Group
 THE U.S. HIGH-TECH INDUSTRY DRIVES JOB CREATION
               AND ECONOMIC GROWTH

 • High-tech employment -- comprising producers of technology
   products and services -- totaled 5.3 million in 2000 (4.8% of the total
   U.S. private sector workforce). Source: AeA Cyberstates 2001

 • High tech contributed 50 percent of the acceleration in U.S.
   productivity growth in the second half of the 1990s. Source: DOC, Digital
    Economy 2000



 • Falling prices of high-tech goods and services have reduced overall
   U.S. inflation by an average of 0.5 percentage points a year (from
   1994 to 1998). Source: DOC, Digital Economy 2000

    High Tech = information technology manufacturing, software and computer-related
    services, and communication services
                                                                                      4
High-Tech Energy
Working Group
   THE U.S. HIGH-TECH INDUSTRY DRIVES JOB CREATION
         AND ECONOMIC GROWTH -- EFFICIENTLY


  • High-tech employment represents 10.6 percent of the U.S.
    manufacturing workforce in 2000. Source: AeA Cyberstates 2001

  • High tech accounted for only 4.7 percent of all electricity purchased
    by U.S. manufacturing industries in 1999. Source: AeA; Annual Survey of
     Manufacturers.


  • High tech helps create a highly efficient economy: Information
    technology improves communications between suppliers and
    customers, facilitating U.S. manufacturers’ efforts to sell products
    and reduce inventory. Source: DOC, Digital Economy 2000



                                                                              5
High-Tech Energy
Working Group
                                         ELECTRICITY USAGE IN MAJOR
                                        MANUFACTURING SECTORS, 1999

                  180000000
                                  156,945,358
                  160000000
                                         130,266,759         Total manufacturing = 829,000,000 kWh
                  140000000
kWh (in 1,000s)




                  120000000
                  100000000
                                                70,693,203
                                                                     53,287,763
                   80000000
                                                        61,345,118           52,853,541
                   60000000                                                          44,590,590
                                                                                                  38,995,501        26,683,846
                   40000000                                                                            28,518,819
                                                                                                                             23,333,569        6,337,820
                   20000000
                                                                                                                                   8,719,262          5,141,594

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                                                                                                                                                    6
       High-Tech Energy
       Working Group                                                                                   Source: AeA; Annual Survey of Manufacturers
              HIGH-TECH COMPANIES COMMITTED
            TO REDUCING ENERGY DEMAND FURTHER


      • Intel has set a 2001 corporate objective to reduce its energy
        consumption by 10 percent this year.

      • Agilent Technologies is budgeting $20 million for projects
        aimed at significantly reducing its energy consumption with the
        expectation that these efforts will reduce energy consumption by
        15 percent.

      • Hewlett Packard’s energy conservation efforts have helped it
        cut five kilowatt-hours off its energy usage at its Cupertino
        campus every year since 1991, despite having increased the
        size of the facility by 300,000 square feet. Source: Silicon Valley
          Manufacturing Group
                                                                              7
High-Tech Energy
Working Group
            HIGH-TECH COMPANIES COMMITTED
       TO REDUCING ENERGY DEMAND FURTHER (cont.)


      • Over the last 10 years, IBM has conserved an estimated 8.2
        billion kilowatt hours of electricity and, as a result, avoided
        approximately 5.66 million tons of carbon dioxide emissions,
        while saving about $518 million in expenses.


      • Sun Microsystems’ commitment to energy conservation has
        resulted in a 37% reduction in energy use at one facility and use
        of more energy efficient photocopiers saved 220,000kw
        nationwide during 1999. Source: Silicon Valley Manufacturing Group



                                                                          8
High-Tech Energy
Working Group
               QUICK REFERENCE CONVERSION TABLE

         800
                                                                                             750


         700

         600

         500
 Watts




         400

         300
                                                                        200
         200
                                                    150


         100
                                    50
                   30

          0
                Laptop         PC in energy    Average PC +     40-watt bulb, 5           One
               (standby)       saving mode        monitor          hrs/day             horsepower
                                              Equipment Type

                        1 megawatt can power 1,000 homes
                        3.62 trillion kilowatt hours powered the U.S. in 1998
                                                                                                   9
High-Tech Energy
Working Group                                      Source: Lawrence Berkeley National Labs; NOVA, PBSonline
         ELECTRICITY USED BY HIGH-TECH PRODUCTS

      • High-tech products are NOT major component of national
        electricity demand

      • Lawrence Berkeley National Labs (LBNL) has analyzed high-
        tech energy demand and concluded:

           – Office and network equipment comprise only 2 percent of
             U.S. electricity
           – Including telecommunications equipment and energy to
             produce office equipment, demand share rises to only 3
             percent
           – Analysis based on “bottom up” effort using best measured
             data


                                                                                  10
High-Tech Energy
Working Group                         Source: Lawrence Berkeley National Lab (LBNL)
                             POPULAR MYTHS

      • Media attention for previous analysis by Greening Earth Society
        (GES) (Western Fuels Association) reached a different
        conclusion:

           – “Internet-related” share of national electricity demand was 8
             percent in 1998
           – Total electricity demand by all computers and office
             equipment was 13 percent in 1998
           – Growth to 50 percent within 20 years

      • GES analysis was based on inaccurate data and assumptions
        (see back up slide)


                                                                         11
High-Tech Energy
Working Group
                      MYTH                                              FACT

  1. The Internet was responsible for 8               1. This statistic is exaggerated by a
      percent of all electricity use in 1998              factor of 8



  2. The entire digital economy                       2. It is actually about 3 percent.
      (including office,
      telecommunications, and network
      equipment) accounted for 13
      percent (’98)

                                                      3. Actual use is about 100 watts of
  3. Each Cisco router uses 1,000 watts
                                                          power


  4. PC plus monitor uses 1,000 watts                 4. PC plus monitor in use = 100-120
                                                          watts of electricity and dips to 20-
                                                          25 watts or less in energy-saving
                                                          mode

  Source: Mark Mills, The Internet Begins With Coal   Source: Lawrence Berkeley National Labs (LBNL)

                                                                                                   12
High-Tech Energy
Working Group
                                                                                                                 R                                    Percent of Electricity Use Per Household
                                                                                                                      ef
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Working Group
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High-Tech Energy
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                                                                                                                                                                                                 AVERAGE ELECTRICITY USAGE PER HOUSEHOLD




                                                              13
Source: EIA, A Look at Residential Energy Consumption, 1997
   NEW PRODUCT GENERATIONS ARE INCREASINGLY
               MORE EFFICIENT
                                                                                                                                                   1992
                                                                         120
            120
                                                                                                                                                   1993
            100                                                                           70
                                                                                                                                                   1995
             80
 Watts                                                                                                                    55
             60                                                                                 40                                                 1997
                          30              30                   30
             40                    15             15                                                                                16
                                                                      10                               10     15      6
                                                                                                                                                   1999
             20                                    30
                                                               10                                                                                  2000
               0




                                                                                                                                           19
                                                                      Multif unctional
                                                   Printer, Fax, or
                   Computer (200




                                                                                                        HP LaserJet


                                                                                                                      HP LaserJet
                                   Monitor (any




                                                                                         copies/min)
                                                                                         Copier (30




                                                                                                                                             99
                                                                                                                                    19
                                                                                                          A/A-1


                                                                                                                         X/X-1

                                                                                                                                      92
                                                                         Device
                                      size)


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                      w atts)




                                                                                                                                                   2001




                                                                       Equipment Type
                                                                                                                                                  14
High-Tech Energy
Working Group                                                                Source: EPA Energy Star; Hewlett-Packard Company
                      THE INTERNET POTENTIAL



      • The Internet enables energy efficiency gains of two basic types:

           – Structural gains:
              • achieved when growth shifts to sectors of the economy
                that are not particularly energy-intensive such as the
                high-tech industry and away from sectors such as
                chemical manufacturing, pulp or paper manufacturing,
                and construction, which are energy-intensive

           – Efficiency gains:
              • achieved when businesses change their activities
                 reducing energy use relative to their output of goods and
                 services
                                                                                       15
High-Tech Energy
Working Group                          Source: Center for Energy & Climate Solutions
       THE INTERNET POTENTIAL -- STRUCTURAL GAINS

      • Structural gains could include:


           – Reduction of, or elimination of the need for, office space. By
             2007, B2C and B2B e-commerce together could avoid the
             need for 1.5 billion square feet of retail space and up to 1
             billion square feet of warehouse space.


           – Energy savings just from the operations and maintenance of
             these "un-buildings" could total 53 billion kilowatt hours per
             year, about 13 percent of total electricity growth projected
             under business-as-usual scenarios.



                                                                                        16
High-Tech Energy
Working Group                           Source: Center for Energy & Climate Solutions
        THE INTERNET POTENTIAL -- EFFICIENCY GAINS



      • Efficiency gains could include:

           – The use of the Internet to purchase goods. Internet
             shopping uses less energy to get a package to a house:
             Shipping 10 pounds of packages by overnight air - the most
             energy-intensive delivery - uses 40 percent less fuel than
             driving roundtrip to the mall. Shipping by truck saves 90
             percent.




                                                                                      17
High-Tech Energy
                                      Source: Center for Energy & Climate Solutions
Working Group
                  MACRO TRENDS VALIDATE
             ENERGY EFFICIENCY ROLE OF INTERNET

      • Rise of Internet has coincided with a decrease rather than an
        increase in energy intensiveness of economy

      • Comparing pre-Internet era (1992-6) to Internet era (1996-
        2000):

           – GDP growth rate increased by nearly 50 percent, while
           – Electricity demand growth rates actually declined

      • If Internet was a significant “energy hog,” you would expect to
        see accelerated electricity demand growth rates, not the decline
        the data actually show



                                                                                      18
High-Tech Energy
Working Group                         Source: Center for Energy & Climate Solutions
                         GDP vs. OTHER GROWTH RATES
                                 ANNUAL GROWTH RATES

                                    1992-1996    1996-2000

       5.0%

       4.5%

       4.0%

       3.5%

       3.0%

       2.5%

       2.0%

       1.5%

       1.0%

       0.5%

       0.0%
                   Electricity   Energy             CO2               GDP


                                                                                              19
High-Tech Energy
Working Group                     Source: U.S. Department of Energy, Energy Information Administration
              THE FOLLOWING PAGES
              CONTAIN BACKUP DATA




                                    20
High-Tech Energy
Working Group
                   TECHNOLOGY SUCCESS STORIES


      • Intel has developed the "Instantly Available PC" (IAPC) power
        management chip technology that enables PCs to meet the new
        Energy Star standard of 15 watts sleep-state power
        consumption.

           – PCs with IAPC consume 63% less energy per year than
             non-power managed PCs, driving an energy savings of over
             $10 billion in the US alone over the next 10 years.

           – This energy savings also reduces the pollution associated
             with generating electricity, equivalent to taking nearly 22
             million cars off the road.

                                                                           21
High-Tech Energy
Working Group
              TECHNOLOGY SUCCESS STORIES (cont.)



      • AMD flash memory semiconductors, found in a variety of
        appliances, equipment and vehicles, consume very low amounts
        of power, e.g. 0.002 – 0.036 watts, and these devices consume
        so little current in standby (0.0000002 amperes) that most test
        equipment cannot measure it.

      • AMD’s microprocessor families support the Energy Star
        computer specification of 15 W watts sleep-state power
        consumption. AMD has also developed PowerNow!, a
        combination of software and hardware, which allows set top
        boxes to reduce power consumption up to 74%.



                                                                     22
High-Tech Energy
Working Group
               TECHNOLOGY SUCCESS STORIES (cont.)


      • All of Sun Microsystems’ desktop products are Energy Star
        compliant. Sun’s Sun Ray 1 appliance requires less than 20
        watts while the traditional unit requires as much as 100 watts.
          Source: Electronics Industry Alliance, International Cooperative for Environmental Leadership, World

          Resources Institute, Taking a Byte Out of Carbon



      • Canon has developed a new "on demand" fixer technology for
        photocopiers that reduces energy consumption to 1/4th of the
        conventional level, while dramatically reducing warm-up times.

      • Ricoh’s Aficio1035 copier, launched in 2001, use one-ninth of
        the power of the Ricoh DS5330, launched in 1994 (34Wh/h/
        297Wh/h = 1/9 ).

                                                                                                                 23
High-Tech Energy
Working Group
              TECHNOLOGY SUCCESS STORIES (cont.)



      • IBM's revamped eServer z900 provides significant energy cost
        and space advantages over traditional server arrangements.

      • Kodak’s Digital Video Camera, the DVC323, allows customers
        to shoot still pictures or motion video – even to have a live
        teleconference – using home or office computers, which
        substitutes energy intensive travel with remote interaction.

      • From 1994 to 1997, the computing speed of IBM’s AS/400
        Model 9406 computer has increased six times while its power
        consumption in 1997 is only one-fifth of that in 1994.


                              Source: Electronics Industry Alliance, International
                                                                                     24
High-Tech Energy              Cooperative for Environmental Leadership, World
Working Group                 Resources Institute, Taking a Byte Out of Carbon
              TECHNOLOGY SUCCESS STORIES (cont.)


      • Panasonic’s technologies include electronic toll collection
        systems that automatically bill drivers for road tolls via an
        exchange of signals between car-mounted and toll-station
        equipment, thereby improving fuel efficiency. Source: Electronics
          Industry Alliance, International Cooperative for Environmental Leadership, World Resources
          Institute, Taking a Byte Out of Carbon




      • With approximately one third of the stock of copiers now Energy
        Star compliant, it is estimated the current savings of the Energy
        Star copier program to be 570 GWh/year. Source: Lawrence Berkeley
          National Labs, "It's Midnight...Is Your Copier On? Energy Star Copier Performance




                                                                                                  25
High-Tech Energy
Working Group
            EXAMPLES OF ERRORS IN GREENING EARTH
                    SOCIETY (GES) STUDY

                                              Units      GES           Actual          Ratio
                                                         estimate      estimate        GES/
                                                                                       Actual
Power used by phone
company central offices                          kW        500               55             9.1

Power used by mainframe computers + cooling      kW        250              19.2            13.0

Active power used by a typical PC + monitor      W         1000             150             6.7

Typical routers on the Internet                  W         1000              30             3.3

Typical routers on LANS and WANS                 W         1000              50             20.0

Electricity used to manufacture a PC             kWh       1500              300            5.0


                                                                                          26
High-Tech Energy
Working Group                                    Source: Lawrence Berkeley National Labs (LBNL)
     LOWEST STATE ELECTRICTY USAGE PER PERSON,
                           1998 RANKED


      Rank         State                      Electricity Usage Per
                                              person (MWh)


      47           New Hampshire                           7.8
      48           Hawaii                                  7.8
      49           New York                                7.2
      50           Rhode Island                            7.0
      51           California                              6.9


                            Source: AeA; Energy Information Administration,   27
High-Tech Energy
Working Group               State Electricity Profiles, 2000

								
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