Rediscovering Existing Federal Programs

The U.S. Census Bureau estimates that small- and medium-sized manufacturers account for 70 percent of—or approximately 10.2 million—manufacturing jobs within the United States and represent an estimated 75 percent of U.S. manufacturing facilities.  Plagued by volatile energy prices, a shrinking pool of well-trained manufacturing professionals and limited cash reserves to pursue strategic improvements, many small manufacturers are focused on hold-and-defend market strategies as a result of the tepid economic climate.    

As legislative priorities of the 112th congress begin to emerge, jobs, workforce training, and stimulation of the U.S. economy remain a part of the conversation.  Revitalizing U.S. manufacturing is a key element of advancing this agenda.  In addition to a flurry of new, innovative ideas that are being generated, it is important to keep in mind existing federal programs that have successfully contributed to industrial energy efficiency and continue to do so with limited resources.

DOE’s Industrial Assessment Centers

Industrial Assessment Centers (IACs) are a network of technical assistance centers focused on industrial energy efficiency that are housed within 26 participating universities across the nation.  This program, funded by the U.S. Department of Energy’s (DOE) Industrial Technologies Program (ITP), matches teams of engineering students and faculty from a given IAC  with local small- and medium-sized manufacturers (SMMs) to evaluate energy use within participating facilities.  IAC teams perform energy efficiency assessments on a wide variety of industrial process and cross-cutting systems. These assessments yield targeted energy efficiency recommendations with realistic payback periods.  The IAC teams also utilize ITP’s suite of energy assessment software tools in addition to its engineering best practices. Based on aggregate assessment data, the average IAC energy savings assessment identifies over $70,000 in annual energy cost savings.

The Industrial Energy Efficiency Imperative 

The concept of Industrial Assessment Centers (formerly known as Energy Analysis and Diagnostic Centers) was originally established by the U.S. Department of Commerce in 1976.  At the time, following the nation’s first major energy crisis, the program was conceived to assist manufacturers save energy, reduce cost of operations, and stay in business—particularly small manufacturers, who may not otherwise have the expertise or internal capacity to conduct their own energy savings assessments.  Meanwhile, students pursuing industrial engineering disciplines—electrical engineering, mechanical engineering and materials science, among others—would gain valuable field exposure to industrial facilities while integrating energy efficiency into their academic curriculum.

At the outset, 4 universities were selected to participate in the federally-funded program.  Today, under guidance and funding from DOE’s Industrial Technologies Program, the IAC program has grown to 26 universities with over 300 students participating annually. The IACs have relied on the proficiency and dedication of their academic staff to provide high quality assessments for more than 30 years. This has enabled the IAC program to become a highly impactful and cost-effective federal energy efficiency program.

Proven, Measurable Results

Since 1980, the IAC program has maintained one of the most extensive records of assessment and recommendation data in existence.  IACs have catalogued nearly 15,000 industrial energy savings assessments including more than 111,000 energy efficiency recommendations.  As a result, over its 33 years, the IAC program has prompted participating industrials to implement nearly 52,000 energy efficiency improvements representing over $4.5 billion energy saving for U.S. manufacturers.

In addition to finding energy savings opportunities, many IAC assessments uncover valuable co-benefits such as increased productivity, expanded capacity, reduced product waste, and operations and maintenance cost savings. Based on IAC data, the average manufacturer generates nearly $16,000 in productivity enhancements and an additional $2,800 in reduced production waste due to implemented IAC recommendations.  Further benefits are captured anecdotally in periodic case studies.

A Gold Standard in Workforce Training

A parallel benefit to the low-cost energy assessments is the valuable workforce training IACs provide.  The IAC program serves as an important vehicle through which engineering students are introduced to energy management and efficiency. As a result, IACs help to funnel well-qualified engineers with exposure to energy efficiency into the manufacturing sector.  In addition to working directly in manufacturing plants, many IAC graduates pursue other energy-related careers. Since its inception, more than 2,500 students have graduated from universities with an IAC. Typically, each student participates in an average of 18 energy savings assessments, although many have experience with up to 40.  As a result, over 55 percent of IAC graduates go on to pursue careers related to energy efficiency.

The capacity-building role that the IACs play is crucial to the sustained growth of energy efficiency investments in the industrial sector. With variable energy costs and the need to remain competitive in the face of foreign competition, energy efficiency has grown in importance for U.S. industry. Because IAC graduates are knowledgeable about the most up-to-date technologies and best practices for improving energy efficiency, they can validate decision-making on energy efficiency investments within an industrial plant.  
 

IACs—Funding and the Future

Over the past decade, the IAC program has been subject to drastic budget cuts forcing cutbacks in programmatic offerings.  In fact, current funding hovers at approximately $4 million annually, less than half of FY2000 funding.

Nevertheless, IACs continue to provide an illustrative example of a strategic federal investment generating quantifiable returns—an important point to remember as the 112th congress searches for opportunities to rationalize federal spending.   

In early 2011 ITP will issue a competitive solicitation for colleges and universities interested in directing Industrial Assessment Centers. The outcome of this solicitation will determine the pool of IACs that will continue to offer valuable technical assistance and essential workforce training over the next 5 years.