Copyright ©2012 E. I. du Pont de Nemours and Company. All rights reserved. The DuPont Oval Logo, DuPont™, and The miracles of science™ are registered trademarks or trademarks of DuPont or its affiliates.
Energy Efficiency: A Sustainability Journey
DuPont Sustainable Solutions
Juan Aguiriano Worldwide Managing Director – Sustainable Operations
September 7th 2012
Copyright ©2012 E. I. du Pont de Nemours and Company. All rights reserved. The DuPont Oval Logo, DuPont™, and The miracles of science™ are registered trademarks or trademarks of DuPont or its affiliates.
• Sustainability Drivers for Energy Efficiency
• Energy Efficiency and Singapore
• Energy Efficiency is a Business Opportunity
• DuPont Sustainability Journey
• Managing Energy Efficiency
• Market Facing Goals
Energy Efficiency – A Sustainability Journey
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Copyright ©2012 E. I. du Pont de Nemours and Company. All rights reserved. The DuPont Oval Logo, DuPont™, and The miracles of science™ are registered trademarks or trademarks of DuPont or its affiliates.
Energy efficiency is a component of the big sustainability picture…
Sustainability
People
SHE Knowledge and skills
Stakeholder engagement
Local content
Business ethical
practices & Society
Planet
Air emissions
(GHG, dust, etc.)
Water (consumption,
pollution)
Biodiversity (e.g., land
remediation)
Waste (generation,
toxicity, disposal)
Depletable resources
consumption (e.g., energy)
Profit
Asset productivity & Capital
effectiveness
Local requirements are of increasing importance to multiple industries to manage local stakeholders
and ensure a social license to operate
Energy management and energy efficiency must be part of a
corporate sustainability strategy
Consuming less energy to produce more goods…
Energy consumption in industry can represent up to 60% of GHG emissions
7-Sep-12 DuPont Sustainability Journey
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Environmental concerns linked to energy are an
element of sustainability
Copyright ©2012 E. I. du Pont de Nemours and Company. All rights reserved. The DuPont Oval Logo, DuPont™, and The miracles of science™ are registered trademarks or trademarks of DuPont or its affiliates.
External drivers Volatility, magnitude and escalation of energy costs are increasing the urgency to drive improvements in energy efficiency.
Governments and global institutions are introducing new energy management regulations and policies, pressuring companies & societies to re-think energy consumption.
Companies are expected to publish energy improvement goals and are being held accountable for delivering results.
Energy efficiency is being used as a powerful strategy to lower the cost of goods and attract customers at every level.
1. Volatility of resource costs
2. Public policy
4. Public accountability
5. Competition
The Investment community is increasing the weight of a company’s energy efficiency commitments and capabilities when making investment choices.
3. Access to capital
Multiple Global Drivers are pressuring companies to improve Energy Efficiency
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EE is high on the agenda in Singapore with targets in place, strong government support and abundant opportunities.
Energy Efficiency is Good for Singapore
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Industrial Energy use represents 54% of total consumption in Singapore.
Source: EDB. Singapore Energy Efficiency Strategy, 2012.
Copyright ©2012 E. I. du Pont de Nemours and Company. All rights reserved. The DuPont Oval Logo, DuPont™, and The miracles of science™ are registered trademarks or trademarks of DuPont or its affiliates.
Energy is finite, and yet energy demand is rapidly outpacing supply, driving prices higher as well as the cost to society.
Within the industrial sector – the largest consumer of energy – there is much opportunity to become more energy efficient through improved energy management.
In doing so, companies can not only generate business value, but also societal value.
Energy Efficiency is a Business Opportunity
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Copyright ©2012 E. I. du Pont de Nemours and Company. All rights reserved. The DuPont Oval Logo, DuPont™, and The miracles of science™ are registered trademarks or trademarks of DuPont or its affiliates.
Strategic Approaches to Energy – A Business Opportunity
Operational efficiency (inside out approach
prevailing)
Product innovation (outside in approach
prevailing)
Influence on Society and the competitive
landscape
Awareness and Compliance
Moving from discrete energy reduction initiatives to integrated energy management strategies that return significant cash and market advantage.
Risk Mitigation Cost Reduction Competitive advantage Revenue generation
Operational Excellence Sustainable Growth Licence to Operate
Energy Security Energy Consumption Sustainable Energy
Mega Trend Energy Efficiency Products
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Companies are strategically focusing on its efficient use as a way to gain competitive advantage
Not sure
Not at all
Somewhat
Very
Extremely
0.00%
3.10%
16.30%
39.80%
40.80%
More than 80% of surveyed companies rated energy to be “extremely “ or “very” important to their business, making energy
an strategic factor to focus on to gain competitive advantage.
Energy has become one of the strategic factors driving business decision-making. Business and consumers are increasingly considering the energy efficiency of the products and services they buy and use. In an industrial context, companies are searching for the most energy-efficient process design solutions. (…) these development are the results of economic and political facts: the long-term depletion of fossil fuels and public policy decisions to curb greenhouse gas emissions (GHG). Thus, energy has become a key factor in gaining a competitive edge, and the relevant global markets are growing rapidly. Source: McKinsey & Company, Energy: A key competitive Advantage New sources of growth and productivity, April 2009.
Source: The Conference Board, Strategic Energy Management, 2004.
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Copyright ©2012 E. I. du Pont de Nemours and Company. All rights reserved. The DuPont Oval Logo, DuPont™, and The miracles of science™ are registered trademarks or trademarks of DuPont or its affiliates.
Bus
ines
s In
tegr
atio
n
1972 1989 1994 2000 2006
Renewable Energy, Energy
Use Flat
Corporate Environmental
Planning
Announced 2015 Market facing Goals
Announced 2010 footprint
reduction Goals
Compliance
Corporate Environmentalism
Sustainable Growth
Sustainable Growth Market Facing Goals
SHE Commitment
Employee Safety
Process Safety
Environment
Energy
Productivity
Sustainability
The DuPont journey from Safety to Sustainable Growth
7-Sep-12 9
1990
DuPont Sustainability Journey
Copyright ©2012 E. I. du Pont de Nemours and Company. All rights reserved. The DuPont Oval Logo, DuPont™, and The miracles of science™ are registered trademarks or trademarks of DuPont or its affiliates.
Cost savings: $6 Billion (USD) Industry recognition: “Laggard” to “Leader” 427th consecutive quarter dividend
DuPont has achieved a significant footprint reduction
* TRI = Toxic Release Inventory
Sources:
DuPont Global Reporting Initiative (GRI) report: http://www2.dupont.com/Sustainability/en_US/assets/downloads/2011_DuPont_GRI_Report.pdf
DuPont Sustainability Progress Report: http://www2.dupont.com/Sustainability/en_US/index.html
7-Sep-12 10 DuPont Sustainability Journey
Copyright ©2012 E. I. du Pont de Nemours and Company. All rights reserved. The DuPont Oval Logo, DuPont™, and The miracles of science™ are registered trademarks or trademarks of DuPont or its affiliates.
Reducing Environmental Footprint
Greenhouse Gas Emissions > 14.62 MM metric t CO2-e Water Conservation > 32 billion gallons Fleet Fuel Efficiency > 100% leading tech vehicles Air Carcinogens > 0.9 million pounds Independent Verification of Site Programs 100 % site Serving the Marketplace Environmentally Smart Opportunities from R&D > $US 640 M Products that Reduce GHG > $US 2 Billion revenue Revenues from Non-Depletable Resources > $US 8 Billion Products that Protect People > 1,000 products
Core Value Performance We continue to drive towards the Goal of Zero in each of our
Core Value areas (Safety, Environment, Ethics, Respect for People)
DuPont is on track to deliver 2015 Footprint and Market Facing Goals
DuPont Sustainability Progress Report: http://www2.dupont.com/Sustainability/en_US/DuPont_2010_Sustainability_Progress_Report.pdf
7-Sep-12 11 DuPont Sustainability Journey
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An Integrated Approach to Develop and Operationalize World-Class Energy Management
Division & Site Structure Roles & Accountability Performance Management
Bottom-up business
review
Top-down critical issues identification
Goals development & benchmark
Stakeholder engagement
Management System Design and Implementation
Detailed targets
Corporate Analysis &
Prioritization, KPI
Communicate & Cascade Leadership
Process & Tools Organization
Structure 3 4
5 2
Organizational Processes
Assess & Envision Sustain
Leadership Alignment Planning & Initiatives Execution Influence Model
Competence Best Practice Talent Management
1
Guidelines, Standards
Business Units Plans
Cultural Transformation
Capability Building
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Copyright ©2012 E. I. du Pont de Nemours and Company. All rights reserved. The DuPont Oval Logo, DuPont™, and The miracles of science™ are registered trademarks or trademarks of DuPont or its affiliates.
Integrated Operations Management Systems
Focus on what really matters, with the right
people
The right tools and practices to solve root
level problems
People instinctively
doing the right things
The right skills and coaching
Mindsets and Behaviors
Role modeling/
coaching dialogue/ difficult
discussions
Capabilities Engine
Technical Model Managing Process
6
An integrated management system that fully develops people and organizational capability for effectiveness and creativity in utilizing assets and eliminating all waste, e.g. energy waste.
Current and future requirements for capability and performance
7-Sep-12 13
Required Business outcomes
DuPont Sustainability Journey
Copyright ©2012 E. I. du Pont de Nemours and Company. All rights reserved. The DuPont Oval Logo, DuPont™, and The miracles of science™ are registered trademarks or trademarks of DuPont or its affiliates.
How to Get Started on Energy Efficiency ? The Key Success Factors
Develop Skills and Capabilities of People to Support Cultural Change
Implement a Vertically Integrated Management Approach to Drive Results
Connect Diverse and Complex Components of Energy Management and Efficiency
Elevate Energy and its Cost as a Strategic Business Issue
Identify and Execute the Right Opportunities to Drive Maximum Gains
1
2
3
4
5
7-Sep-12 14 DuPont Sustainability Journey
Copyright ©2012 E. I. du Pont de Nemours and Company. All rights reserved. The DuPont Oval Logo, DuPont™, and The miracles of science™ are registered trademarks or trademarks of DuPont or its affiliates.
Elevate Energy and its Cost as a Strategic Business Issue 1
• Understanding business implications of energy consumption and escalating costs
• Analyzing implications of energy cost variability on portfolio profitability • Benchmarking and quantifying the total opportunity value.
What are strategies for developing attractive, “non-cap” opportunities?
Universe of Attractive Business Improvement
Opportunities
Universe of Energy Improvement Opportunities
Capital Improvements
7-Sep-12 DuPont Sustainability Journey
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Identify & Execute the Right Opportunities to Drive Maximum Gain 2
Assess Plant Energy Use (1st or 2nd Party)
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 Month
Implement Changes
Identify Project Opportunities Quantify Stake for Savings Determine Feasibility Prioritize Improvements
Capital Projects
First Savings Achieved
-100%
-50
-0 Typical Savings Run Rate
Six Sigma Projects
Repeat Assessment Process Every 3 Years
Institute Monthly Program Reviews with Plant Manager
Plant Manager Appoints Plant Energy Champion
Appoint Plant Energy Team
Opt in
Set Breakout Target [Beginning of each year]
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A range of methodologies should be used to select and fund projects ranging from simple cost-effectiveness to the most detailed triple-bottom line ROI sensitivity analyses across the whole company portfolio
Implement a Vertically Integrated Management Approach to Drive Results
0
50,000
100,000
150,000
200,000
250,000
300,000
350,000
400,000
450,000
500,000
0 2000000 4000000 6000000 8000000 10000000 12000000 14000000 16000000
Cum
ulat
ive
Ener
gy S
avin
gs, G
J
Cumulative Cost $k
Energy Projects Pareto Curve
80% of Cumulative Savings from projects below the line.
-$250,000 $250,000 $750,000 $1,250,000 $1,750,000
13
3
19
7
14
11
4
20
5
18
1
8
12
9
16
17
15
Cost Effectiveness, $k
Proj
ects
Energy Projects Cost Effectiveness
Cost Effective
Not Cost Effective
0
200,000
400,000
600,000
800,000
1,000,000
1,200,000
Base
line
Ene
rgy
Usa
ge
Ener
gy P
roje
ct R
educ
e C
oal L
oss
A
Ener
gy P
roje
ct L
ong
Wal
l Per
form
ance
A
Ener
gy P
roje
ct E
lect
ricity
Mon
itorin
g D
Ener
gy P
roje
ct D
iese
l Mon
itorin
g B
Ener
gy P
roje
ct F
lota
tion
Opt
imis
atio
n A
Ener
gy P
roje
ct E
lect
ricity
Mon
itorin
g C
Ener
gy P
roje
ct L
ong
Wal
l Rel
iabi
lity
A
Ener
gy P
roje
ct R
educ
e C
oal C
onta
min
atio
n
Ener
gy P
roje
ct L
ong
Wal
l Eng
inee
ring
A
Ener
gy G
oal
Baseline
Energy Reduction Projects Energy Goal
Ener
gy S
avin
g G
J
Selected Projects
Cumulative GJ Reduction Impact of Selected Energy Reduction Projects
14313
19211201067
12
4
175816191815
2627280
1
2
3
4
5
6
7
8
9
10
0 1 2 3 4 5 6 7 8 9 10
Low
<---
------
------
------
-----
Cos
t Im
pact
-----
------
------
------
- > H
igh
Hard <------------------------------------ Ease of Implementation ------------------------------------> Easy
Energy Projects Priority Matrix
CHPP
Util
isatio
n A
Elec
tric
ity M
onito
ring
B
Dies
el M
onito
ring
B
Redu
ce C
oal L
oss A
Flot
atio
n O
ptim
isatio
n A
Engi
ne P
rogr
am A
Digg
er U
tilisa
tion
A
Redu
ce C
oal C
onta
min
atio
n
Exca
vato
r Rat
e Im
prov
emen
tEx
cava
tor U
tilisa
tion
ADi
esel
Mon
itorin
g A
Long
Wal
l Per
form
ance
A
Long
Wal
l Rel
iabi
lity
A
Elec
tric
ity M
onito
ring
D
Elec
tric
ity M
onito
ring
C
Long
Wal
l Eng
inee
ring
A
Elec
tric
ity M
onito
ring
ASh
ovel
Rat
e Im
prov
emen
t ADr
aglin
e Ra
te A
Shov
el U
tilisa
tion
A
1500 kt 2500 kt 6000 kt
-200
-150
-100
-50
0
50
100
150
200
Incr
emen
tal c
ost
$/to
nne
(Tot
al E
mis
sion
s)
kT CO2-e Cumulative Project Life Abatement
Marginal Abatement Cost Curve (Selected Projects by Saving)
$23 Carbon Cost
Indicative Projects Labelled as ExamplesIndicative Projects Labelled as ExamplesIndicative Projects Labelled as ExamplesIndicative Projects Labelled as Examples
3
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Connect Diverse and Complex Components of Energy Management and Efficiency
Recognize the Energy Challenge
Develop Energy Plan
Energy Mapping
Prioritize & Quantify Capital Projects
Integrate in to Capital Planning Process
Execute Capital Projects
Low cost/ Non-capital Investment Projects
Cross-functional Facilitated Improvement Projects
Input
Methodology Subject Matter
Exper t ise Resources
Management of Change (MOC)
Operational Excellence
Identify & Prioritize Opportunity
60% Opportunities but substantial capital investment
40 % Opportunities with low capital
investment
4
7-Sep-12 DuPont Sustainability Journey
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Energy Management – How To Drive the Culture ?
These elements, and the system for realizing them, form the best practice reference model against which cultural change is implemented
Strong Leadership
Appropriate Organizational Structure
Focused Processes and Actions
Integrated Energy Management
Culture
Engaged & Committed Leadership
Challenging Goals, Policies, & Principles
Metrics and Data-Driven Decisions
Integrated Energy Efficiency Organization
Responsible Line Organization
Timely Recognition of Success
Consistent & Targeted Business Planning Process
Commitment to Training & Development
Effective Communication System
Standard Improvement Methodology
5
7-Sep-12 DuPont Sustainability Journey
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7-Sep-12 20 DuPont Sustainability Journey
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Backup Slide Energy Efficiency – Programs in Singapore (EDB)
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Copyright ©2012 E. I. du Pont de Nemours and Company. All rights reserved. The DuPont Oval Logo, DuPont™, and The miracles of science™ are registered trademarks or trademarks of DuPont or its affiliates.
Backup Slide Energy Efficiency – A Sustainability Journey
7-Sep-12 DuPont Sustainability Journey
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Copyright ©2012 E. I. du Pont de Nemours and Company. All rights reserved. The DuPont Oval Logo, DuPont™, and The miracles of science™ are registered trademarks or trademarks of DuPont or its affiliates.
Backup Slide - Why Industrial Energy Efficiency?
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