Industrial Energy Efficiency Forum, 2012: Looking Back and Gearing Forward - Energy Efficiency Successes in Manufacturing

Since the 1970s, energy efficiency and energy management programs for manufacturers have evolved substantially. Currently, many government and utility programs provide valuable tools, best practices and guidance that can help industrial-end users save energy and improve competitiveness.

On May 17, 2012, the Alliance to Save Energy and the Southeast Energy Efficiency Alliance hosted the Industrial Energy Efficiency Forum. This event gathered several experts and representatives from U.S. manufacturers who came to Washington, D.C. to discuss energy efficiency within the industrial sector — from the early efforts to current energy efficiency programs and future initiatives in U.S. manufacturing.

DOE Kickoff

Dr. Kathleen Hogan of the U.S. Department of Energy (DOE) started the event by discussing the business case for manufacturing and competitiveness, featuring passages from  the President’s state of the Union address on energy efficiency’s potential.

She also highlighted the flurry of energy efficiency activity in the 1970s that was prompted by high energy costs and uncertainty.

Now with price volatility, climate change and other concerns, the U.S. industry has another opportunity to embrace energy management and sustainability strategies. Dr. Hogan pointed to programs such as Better Buildings/Better Plants (BB/BP) and Superior Energy Performance (SEP), which provides a model for continuous improvement. SEP certification requires conformance with ISO 50001 and a rigorous M&V protocol to verify energy savings.

Going forward, the DOE’s Innovative Manufacturing Initiative could introduce a wide range of energy-efficient processes and process technologies in the U.S. industrial sector.

Dr. Hogan then presented SEP certification to two plants in the Southeastern U.S. — Volvo Trucks in Dublin, Virginia and Nissan North America in Smyrna, Tennessee— that were the first  plants in the Southeastern U.S. to achieve SEP certification. Volvo achieved the platinum level for improving energy intensity by 25.8%, showing that significant gains are possible, and Nissan achieved the silver level for reducing energy intensity by 7.2%.

Panel 1: The Early Days

The forum’s first panel focused on industrial energy efficiency from the 1970s to the present. Bill Prindle from ICF International made the point that though energy efficiency technology options are much more significant today than in the 1970s, culture change will be the largest enabler of significant energy efficiency gains in industry.

Prindle also relayed that the business case for energy efficiency today is much broader and that many firms are beginning to implement energy-management strategies. Looking towards the future, Prindle foresees that industrial supply chains will be an area in which large-scale improvements in energy efficiency will be possible due to the energy footprint being higher in companies’ supply chains than within their own facilities.

Steve Schultz, corporate energy manager for 3M, emphasized that energy efficiency is a critical part of 3M’s strategic plan and is viewed as a way to maintain their competitive advantage.

In the early years, Schultz said 3M devised energy management activities on their own. Later, the company took advantage of the growing body of voluntary energy efficiency programs to bolster their own energy management program. Energy use and costs are now actively tracked across all of 3M’s business units and the company has permanent energy teams at 56 of their largest facilities. The results are  impressive — from 1973 to 2010, 3M’s production increased 300% while energy consumption rose only 4%. Looking forward, 3M is including water efficiency into its sustainability program. 

The third panelist, Ethan Rogers from ACEEE, provided anover view of public sector and market-based industrial energy efficiency programs going back to the 1970s. The public sector solutions and programs tended to focus on reducing energy consumption while market-based practices, technologies and standards focused on energy intensity by relating energy to production. Ultimately, Rogers found that programs and tools focusing on energy intensity were more well-received by manufacturers. Future programs will likely need to address the embedded energy in supply chains as well as energy management systems and advanced manufacturing to generate energy efficiency gains. 

Better Buildings/Better Plants – Building the Future

Before the second panel, Maria Vargas and Andre de Fontaine of the DOE addressed the audience about the BB/BP program. BB/BP currently works with more than 100 companies representing 1400 plants across the U.S. to improve energy performance. Together, these plants account for about 5% of the U.S.’s industrial footprint. One new element they shared is that the DOE recently entered into an agreement with the Appraisal Foundation to integrate energy efficiency investments in appraisals of manufacturing properties. Guidelines for such appraisals are expected in one year. In addition, the DOE’s Office of Energy Efficiency and Renewable Energy (EERE) continues to work on tax incentives and workforce training programs to help deliver more energy efficiency improvements into the marketplace. 

Panel 2: Looking Forward

The second panel focused on the future of industrial energy efficiency and the role that Combined Heat and Power (CHP) can play in U.S. manufacturing.

Paul Hamilton of Schneider Electric started the panel off by emphasizing that a cultural shift in manufacturing will have the greatest impact in energy efficiency.  Younger  employees are more conscious of sustainability and aware of energy efficiency and this awareness can be leveraged by manufacturers and can eventually institutionalize energy efficiency.

The other element that offers significant potential for energy efficiency gains, according to Hamilton, is the intersection of IT and newer generation automation/controls equipment. As these more sophisticated control technologies become more prevalent, a wider range of industrial systems and processes will become data enabled allowing for more precise process control  and  predictive analytics that will allow end users to tune energy use on a continuous basis.

Next, Mike Kijak of Volvo Trucks and Ken Roden of Nissan North America discussed their respective plants’ approach to energy efficiency and their experiences with SEP. According to Kijak, the results achieved while seeking SEP certification yielded more credibility for the energy team. This yielded greater  energy efficiency funding and a greater openness to address energy use of process equipment, which had previously been off limits.

Roden said Nissan was already committed to sustainable manufacturing before embarking on SEP certification. But SEP, according to Roden, provided a strong mix of tools, recognition, and training that empowered the employees to address energy use within the manufacturing processes. For Roden, it is important for government to listen to industry in order to understand the unique needs and characteristics of manufacturers. Government can play the role of a facilitator, supporting networking and sharing best practices to catalyze energy efficiency actions across industry.

“The training we underwent simultaneously with other manufacturers in the Southeastern group of the current demonstration plants was very helpful,” Roden said.

Wrapping up the panel, Paul Lemar, President of Resource Dynamics Corporation, addressed the BB/BP program as a Technical Account Manager (TAM) for five industrial partners as well as CHP for the industrial sector. Many of the companies in the BB/BP program are on track to meet the program’s 25% energy intensity reduction goal. According to Lemar, “there needs to be an effective path to management” in order to communicate the value of energy efficiency within the BB/BP companies — many of which understand the need to invest in energy efficiency, but face funding constraints and hurdle rates that are difficult to overcome.   

Lemar then focused on how CHP is an effective way to increase industrial energy efficiency.  One of its most compelling benefits is the reduction in grid-supplied electricity purchases as CHP systems can be in the 70–80% efficiency range.  In addition, companies participating in BB/BP and plants seeking to be certified in SEP can get credit by implementing CHP. There is still strong market penetration potential for CHP, Lemar emphasized, and with lower natural gas prices, implementing CHP systems will become more desirable for manufacturers. By the year 2030, it is estimated that CHP systems could provide up to 20% of U.S. generating capacity.

The Forum concluded with an energy managers’ roundtable with Chris Goddard of Nissan, Chadwick Porter of Volvo and Hamilton. All three agreed that sustainability is becoming crucial for manufacturers, but that each company defines sustainability in their own way. Energy efficiency was viewed by all three as a key way to achieve greater sustainability in manufacturing.

In response to a question about what manufacturers need to do to achieve significant energy efficiency gains in a short timeframe, the energy managers stated that funding and management support are essential and that grants and incentives would be more helpful than low interest loans to most firms.