Honeywell Estimates Smart Building and Homes to Meet 20 Percent of Eletricy Demand by 2020

Collaboration between Users and Utilities Expected to Account for More Than 100 Gigawatts of Power Annually, Altering Current Energy Delivery Models and Determining Success of the Smart Grid

MINNEAPOLIS, June 13, 2011 – Within the next decade, more than 20 percent of electrical demand in the United States is expected to be met by building operators and homeowners more effectively optimizing their energy consumption and resources in collaboration with their utilities, say energy experts at Honeywell (NYSE:HON).

This shift will put energy users at the center of efforts to make the utility grid smarter and more stable. Accomplishing the transformation will include measure such as permanent reductions in energy use, temporary consumption reductions when demand spikes and strains the grid, and increased onsite generation and storage. The key driver in all cases is the continued innovation and deployment of applications that connect homeowners and building-owners to utilities, and allow users to automate their response to changes in energy reliability and prices.

Honeywell is actively working to help energy users and utilities realize the benefits of a smarter grid, and the expected growth in customer-focused energy programs will be a key theme during its annual Users Group for Buildings, which begins today. Traditionally a conference for facility owners and operators, Honeywell is adding a utility track to bring both customer groups together to discuss new opportunities for trimming energy consumption and costs, and managing demand.

Currently, energy capacity managed through customer-focused programs from utilities only represents about 5 percent of total U.S. requirements. But according to the Federal Energy Regulatory Commission (FERC), utilities’ demand response programs could increase that figure to 14 percent by 2020, and would reduce peak demand by 100 gigawatts. This level of generation capacity would eliminate the need for approximately 2,000 peaking power plants, plants that sit idle until a utility company’s customer energy demands are greater than the power it can deliver. In many cases these peaking plants are costly to build and are powered by coal or diesel fuel, both of which contribute to carbon emissions. The figure could top 20 percent if customers add more onsite generation, such as solar and wind-powered systems and through advances in energy storage technology, according to Honeywell.

In addition, energy-efficiency measures could easily cut annual electricity consumption in the U.S. by 2,700 terawatt-hours, or 10 percent of total usage, thereby reducing carbon dioxide emission by an estimated 1.8 billion metric tons.

“The real gains come in combining all these efforts,” said Paul Orzeske, president of Honeywell Building Solutions. ”The smart grid is not just about making utility equipment and networks more intelligent. The other side of the coin is providing energy users with the technology that allows them to participate in the dynamic exercise of balancing supply and demand.”

However, to ensure the success of the evolving grid, several challenges must be addressed. This includes setting national standards to ensure that utilities and their customers can securely exchange information, and creating federal and state incentives that foster domestic resources, and encourage both efficiency and flexibility. Merging traditional energy-saving initiatives in facilities with utility-driven programs must also continue to gain momentum.

[an error occurred while processing this directive]“The lines between producer and consumer are starting to blur, which provides an opportunity to change the old and somewhat antiquated energy models,” said Jeremy Eaton, vice president of energy solutions for Honeywell Building Solutions. “We need to create effective bonds between utilities and their customers — bonds that deliver value across the entire supply-demand continuum. The good news is the technology to build these connections and give users the ability to automate energy decisions already exists. And it requires less capital than generating new power.”

Honeywell has a legacy of working with both utilities and their customers, giving it a unique perspective on how to maximize smart grid investments. With controls in 150 million homes, ten million buildings and thousands of industrial sites, and experience managing demand response and energy efficiency programs for more than 100 utilities, Honeywell has the offerings and experience to empower smart energy users.

The company recently received several grants from the Department of Energy as part of the largest grid modernization investment in U.S. history. Honeywell is also helping power providers across the globe better manage energy supply and demand, giving their customers the tools to automatically adjust electricity use and reduce the burden on the utility infrastructure.

For more information, visit the Honeywell website.

Honeywell International (www.honeywell.com) is a Fortune 100 diversified technology and manufacturing leader, serving customers worldwide with aerospace products and services; control technologies for buildings, homes and industry; automotive products; turbochargers; and specialty materials. Based in Morris Township, N.J., Honeywell’s shares are traded on the New York, London, and Chicago Stock Exchanges. For more news and information on Honeywell, please visit www.honeywellnow.com. Honeywell Building Solutions is part of the Honeywell Automation and Control Solutions business group, a global leader in providing product and service solutions that improve efficiency and profitability, support regulatory compliance, and maintain safe, comfortable environments in homes, buildings and industry. For more information about Building Solutions: www.honeywell.com/buildingsolutions.

This release contains certain statements that may be deemed “forward-looking statements” within the meaning of Section 21E of the Securities Exchange Act of 1934. All statements, other than statements of historical fact, that address activities, events or developments that we or our management intends, expects, projects, believes or anticipates will or may occur in the future are forward-looking statements. Such statements are based upon certain assumptions and assessments made by our management in light of their experience and their perception of historical trends, current economic and industry conditions, expected future developments and other factors they believe to be appropriate. The forward-looking statements included in this release are also subject to a number of material risks and uncertainties, including but not limited to economic, competitive, governmental, and technological factors affecting our operations, markets, products, services and prices. Such forward-looking statements are not guarantees of future performance, and actual results, developments and business decisions may differ from those envisaged by such forward-looking statements.

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