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Industrial Efficiency


  • [ GWh of Electricity Saved ]

    20.5K
  • [ Jobs Impact: ]

    • Low
    • Medium
    • High
  • [ Budget Impact: ]

    • Low
    • Medium
    • High
  • [ Conventional Pollutants Reduced: ]

    SO2
    2,691 tons
    NOx
    2,221 tons
    Hg
    .036 tons
    PM
    413 tons
  • [ Megatons of GHG Reduced: ]

    19.7

Overview

U.S. manufacturing accounted for 11% of GDP in 2011,1 employing close to 12 million workers.2 Companies in the industrial sector spend $94 billion annually3 and consume 5.5 million GWh energy,4 which is 31% of total U.S. power usage.5 While domestic manufacturing is less energy-intensive than that of many other developed countries,6 it is still responsible for 1.5 gigatons of energy-related GHG emissions,7 which is more than a quarter of total U.S. emissions. Simple efficiency upgrades in the industrial sector could curb total U.S. emissions by nearly 10%.8 And cutting industrial energy use by 10% could save companies a combined $10 billion in expenses,9 making American products more competitive overseas.

Analysis

There are already a lot of options for industrial companies to improve their energy efficiency. But long payback periods on efficiency investments,10 information barriers, and the absence of a clear competitive advantage11 discourage their implementation. Small to mid-sized manufacturers, which account for 90% of the U.S. production industry,12 rarely have the staff or resources to spend time comprehensively analyzing their energy use,13 nor do they have the baseline data necessary to make informed decisions.14 Instead, companies generally have to rely on individual suppliers’ data when making equipment purchasing decisions, which may not be easily comparable between supplier options.15

While other PowerBook Components cover industry-specific improvements, many processes use similar equipment and can benefit from similar efficiency upgrades. Most industrial processes involve equipment such as motors, compressors, or transformers, and high-efficiency options are often available.16 Sensors, smart equipment, and optimizing electricity use could lead to energy savings of 15% to 20%.17 Facility energy managers, usually found only at larger manufacturing facilities,18 can often identify ways to reduce energy usage at any type of industrial facility.19

Implementation

To get over the obstacles facing efficiency in the industrial sector, a combination of policy approaches is required.

Prioritize Federal Procurement from Efficient Suppliers

To create a market pull, all federal contracts should require that government suppliers either pursue the U.S. Council for Energy-Efficient Manufacturing’s Superior Energy Performance Certification20 or become part of DOE’s Better Plants program.21 Participation in these programs requires companies to benchmark their energy use and make improvements over several years of up to 25% of initial energy use. As the largest consumer in the U.S.,22 the federal government has a significant ability to impact energy efficiency implementation.

Federal Energy Manager Support for Small-to-Mid-Sized Manufacturers

  To avoid unfairly penalizing small and medium-sized manufacturers through efficiency procurement policies, the Department of Energy and Department of Commerce should ensure that the manufacturing extension program23 and Industrial Assessment Center program24 are properly prepared to help manufacturers become compliant. These existing programs currently provide technical advice.

Create an Industrial Equipment Standard Program

DOE and EPA should work with the National Electrical Manufacturers Association (NEMA) and other interested parties to create a broad program similar to the NEMA premium standard for motors and transformers.25 In the consumer sector, the Energy Star program helps consumers make smart purchasing decisions through education and standardized data.26 In the industrial sector, no similar federal program exists for equipment. Standardizing the testing protocols and making comparison between products easier could even allow for the creation of a rebate program, similar to that proposed in the bipartisan Energy Savings and Industrial Competitiveness Act of 2011,27 or help utilities offer easy-to-understand rebates for curbing demand.

EndNotes
  1. “Advancing Energy Productivity in Manufacturing,” Industrial Summary, Alliance to Save Energy, November 5, 2012, p.1. Accessed March, 7, 2013. Available at: http://www.ase.org/resources/advanced-energy-productivity-manufacturing.
  2. United States, Department of Labor, Bureau of Labor Statistics, “Manufacturing,” Industries at a Glance, Accessed March 7, 2013. Available at: http://www.bls.gov/iag/tgs/iag31-33.htm#workforce.
  3. United States, Department of Energy and Environmental Protection Agency, “Fast Facts on Energy Use,” ENERGY STAR. Accessed on March 7, 2013. Available at: http://www.energystar.gov/index.cfm?c=learn_more.fast_facts.
  4. United States, Department of Energy, Energy Information Administration, “Early Release Estimates from the 2010 MECS,” Manufacturing Energy Consumption Survey, March 28, 2012. Accessed March 7, 2013. Available at: http://www.eia.gov/consumption/reports/early_estimates.cfm.
  5. “Industrial Efficiency,” What You Need To Know About Energy, The National Academies. Accessed March 7, 2013. Available at: http://needtoknow.nas.edu/energy/energy-efficiency/industrial-efficiency/.
  6. “IEA Energy Scoreboard 2011,” International Energy Agency, p. 35. Accessed March 7, 2013. Available at: http://www.iea.org/publications/freepublications/publication/name,34729,en.html.
  7. United States, Department of Energy, Energy Information Administration, “Emissions of Greenhouse Gases,” Report, any specific table number?, December 8, 2009. Accessed March 7, 2013. Available at: http://www.eia.gov/oiaf/1605/ggrpt/carbon.html.
  8. Vestal Tutterow, Aiming Zhou, Jeffrey Harris, and Paul Bostrom, “Greenhouse Gas Emissions and the Industrial Sector: Polies, Programs, and Opportunities for Energy Efficiency,” Report, Alliance to Save Energy, July 28, 2009, pp. 4-138. Accessed March 7, 2013. Available at: http://aceee.org/proceedings-paper/ss09/panel04/paper04.
  9. Calculations based on the $94.4 billion spent annually. See “Fast Facts on Energy Use.”
  10. “Advancing Energy Productivity in Manufacturing.”
  11. Christopher Russell and Rachel Young, “Understanding Industrial Investment Decision Making,” American Council for an Energy-Efficient Economy, October 25, 2012, p. 11. Accessed March 7, 2013. Available at: http://aceee.org/research-report/ie124.
  12. United States, Department of Commerce, Census Bureau, “Business Dynamic Statistics,” Firm Characteristics Data Tables. Accessed March 7, 2013. Available at: http://www.census.gov/ces/dataproducts/bds/data.html.
  13. Jeffery Harris, Paul Bostrom, and Robert Bruce Lung, “Crossing the Valley of Death: Policy Options to Advance the Uptake of Energy-Efficient Emerging Technologies in U.S. Industry,” Alliance to Save Energy, p. 4. Accessed March 7, 2013. Available at: http://www.ase.org/resources/study-viability-energy-efficient-emerging-technologies-us-industry.
  14. Ibid, p. 4.
  15. Ibid, p. 5.
  16. “Partner Listing of NEMA Premium Compliant Electric Motors,” Table, National Electrical Manufacturers Association, June 28, 2012. Accessed March 7, 2013. Available at: http://www.nema.org/Policy/Energy/Efficiency/Pages/NEMA-Premium-Motors.aspx.
  17. Peter C. Evans and Marco Annunziata, “Industrial Internet: Pushing the Boundaries of Minds and Machines,” General Electric, November 26, 2012, p. 15. Accessed March 7, 2013. Available at: http://www.gereports.com/meeting-of-minds-and-machines/.
  18. Harris, Bostrom, and Lung, p. 4.
  19. United States, Department of Commerce, National Institute of Standards and Technology, “Next Generation Strategy,” Manufacturing Extension Partnership. Accessed March 7, 2013. Available at: http://www.nist.gov/mep/sustainability.cfm.
  20. “Achieving Superior Energy Performance,” U.S. Council for Energy-Efficient Manufacturing. Accessed March 7, 2013. Available at: http://www.superiorenergyperformance.net/.
  21. United States, Department of Energy, Energy Efficiency and Renewable Energy, “Better Plants,” Advanced Manufacturing Office. Accessed on March 7, 2013. Available at: http://www1.eere.energy.gov/manufacturing/tech_deployment/betterplants/.
  22. Harris, Bostrom and Lung, p. 12.
  23. United States, Department of Commerce, National Institute of Standards and Technology, “About the Manufacturing Extension Partnership,” Manufacturing Extension Partnership. Accessed March 7, 2013. Available at: http://www.nist.gov/mep/about.cfm
  24. United States, Department of Energy, Energy Efficiency and Renewable Energy, “Industrial Assessment Centers,” Advanced Manufacturing Office. Accessed on March 7, 2013. Available at: http://www1.eere.energy.gov/manufacturing/tech_deployment/iacs.html
  25. “NEMA Premium,” National Electrical Manufacturers Association. Accessed March 7, 2013. Available at: http://www.nema.org/technical/pages/nema-premium.aspx
  26. United States, Department of Energy and Environmental Protection Agency, “About ENERGY STAR,” ENERGY STAR. Accessed March 7, 2013. Available at: http://www.energystar.gov/index.cfm?c=about.ab_index.
  27. United States, Congress, Senate, “Energy Savings and Industrial Competitiveness Act of 2011,” 112th Congress, 1st Session, May 16, 2011. Accessed March 7, 2013. Available at: http://thomas.loc.gov/cgi-bin/query/z?c112:S.1000.IS:/.