federal support for energy efficiency in u.s. industry collaboratively addressing energy management...
TRANSCRIPT
FEDERAL SUPPORT FOR ENERGY EFFICIENCY IN
U.S. INDUSTRY
Collaboratively Addressing Energy Management in Small- and Medium-
Sized Manufacturers (SMMs)
What is the Alliance to Save Energy?
The Alliance to Save Energy
Policy Leaders
Environ-mental Groups
Academia
Business Leaders
Mission: To promote energy efficiency
worldwide to achieve a healthier economy, a cleaner environment, and greater energy security.
Organization: Staffed by 60+ professionals 32 years of experience $12 million annual budget Recognized as the premier
energy efficiency organization in the world
Alliance Associates ProgramBusiness ▪ Government ▪ Public Interests
Sponsorship and participation of more than 160 organizations Involvement by businesses in all economic sectors Initiatives underway in research, policy advocacy, education, technology deployment, and
communications
• Direct SMM jobs• Sector supports another 6.8
million service jobs indirectly• Manufacturing multiplier
Effect
Innovation
• 13-14 times more patents per employee
Agility• Nimble production• Mobility around
R&D breakthroughs
• ~350,000 small- and medium-
sized manufacturing (SMM) facilities
(99% of U.S. plants)
• Represent 70% of U.S.
manufacturing jobs (10.2 million)
Economic Engine
Core Benefits of Small Manufacturers
Other Key Benefits of a Healthy Manufacturing Sector
In 2008, manufacturing value-added GDP was valued at $1.63 trillion (11.5% of total)
U.S. competitiveness
Attracting foreign investment“Insourcing”: $153b in 1990>>>$519b in 20041 in 12 American manufacturing professionals are
now employed by a foreign owned firm
Energy
Universal Need for Energy
GHG Emissions—Climate Change
Energy Security
U.S. Competitiveness
Jobs/Domestic Economy
Feedback Loop—Healthy Tax
Base
Energy as a Fundamental Public Interest
Industrial Assessment Center
(IAC) Program
• 26 universities
• Free technical assessments
• Average of $55,000 savings/assessment
• Technical teams >> students & staff—training!
Manufacturing Extension
Partnership (MEP) Program
• 1600 specialists in 392 locations
• Serviced 25,000 SMMs in 2006
• Productivity, training, tech transfer, technical oversight and engineering
Green Suppliers Network
• ‘Lean & Clean’ assessments (~$7,500)
• Supplier Focus
• Deployed through MEP network
• ~3:1 return on investment
Small Business Development Centers
(SBDCs)• 63 lead SBDCs
• Network of additional 1,100 service providers
• Management assistance focus
• New energy audit program & technical assistance for EE tech manufacturers
Key Federal Resources Supporting Industrial Energy Efficiency
“ENERGY” “LEAN” “POLLUTION PREVENTION” “COMPETITIVENESS”
Other Federal Resources
U.S. Department
of Labor
• $500m in training grants for ‘high growth/emerging industries’ under ARRA
• $105m earmarked for advanced manufacturing
• 11 states have received money for proposals that include training in the manufacturing sector
U.S. Department
of Agriculture
• Rural Business Enterprise Program (97.5% of U.S. land considered ‘Rural’)—includes some $$$ specifically for energy efficiency
• Rural Energy for America Program (REAP): loan guarantees/grants for rural SMEs in support of EE or RE projects
• Business & Industry (B&I) Guaranteed Loan Program: covers facility improvements, expansion, equip’t upgrades, pollution control and biofuel production
“RURAL DEVELOPMENT”
“WORKFORCE TRAINING”
Dangers of Programmatic Stovepipes• Federal programs appear disparate
and disjointed
• Competing for Manufacturers’ Time, Attention and $$$
• “The whole is greater than the sum of its parts.”
• Tunnel Vision: “Stepping over a steam leak to investigate material flow.”
• Inefficient Use of Federal Funds
The ChallengeThere are an estimated 350,000 small- and medium sized manufacturing
facilities in the United States, dispersed widely across the nation.
Achieving a Broad Reach:
NIST’s Manufacturing Extension Partnership (MEP) Program
• 392 centers across the nation with more than 1600 field staff
• Located in every state and Puerto Rico
• Relies heavily on technical experts from local engineering/consulting firms
• Serviced nearly 25,000 manufacturers in 2006 alone
IACs Rural Development OfficesEPA P2 Programs
• 26 University-based centers
• 63 lead SBDCs with a network
of over 1100 service
affiliates
• Largely regional EPA offices, state agencies and
SBDCs
• 47 state offices and 800
area/local offices
SBDCs
-Best Practices in Engaging Small Manufacturers-
Leverage Business & Technical Relationships
SMMs
Vendors & Technical Experts
Utilities
State Agencies, Trade Associations,
Non-profits
Lenders/
Financial Institutions
Explore Local Utilities’ Offerings
Challenges Facing UtilitiesEnergy Efficiency Tactics
DSM Programs: Energy Audits, Financial Incentives
Operations & Maintenance (O&M) Training; Technical
Consultation
Rate Incentives for Load Shedding/Shifting Participants
• Energy Efficiency Resources Standards
(EERS)
• Peak Load Reduction
• Emissions Regulations??
• Financial incentives/resources• Fast-tracked permitting• Tax credits• Determines local regulatory environment
Work with Municipalities, State Energy Office and Other State Agencies.
….clean, healthy, profitable manufacturers are a win-win.
• Jobs• Tax base• Attracts new business
Utilize State and Local Agencies & Organizations
ENERGY EFFICIENCY
State & Municipal $$$EECBG
(Energy Efficiency & Conservation Block
Grants)
$3.2B distributed through municipalities; Focus on pollution prevention, energy efficiency and the creation/retention of jobs
State Energy Programs
(SEPs)
Other Industrial EE Funded
Under ARRA
Existing State Incentive Programs
$3.1B in SEP formula grants; State Awards range from $21m-$226m; Industrial EE retrofits1 of 5 high potential programs
• $3.84m going to 11 state agencies• $2.5m going to regional partnerships
• $149.3m to specific industrial EE projects
Includes other grants, loans/loan guarantee programs or access to revolving loan funds; >360 active programs listed in
DOE ITP’s State Incentives and Resource Database
• Lender have little/no in-house energy expertise
• Short ROI requirements—EE investments perceived as high-risk
• Energy savings are not assets, but future cash flows
• Leverage federal offerings (eg: loan guarantees) to limit lenders’ risk
• Include trusted investors in an energy assessment ‘out brief’
• Explain facility operations and company strategy to investors
• Ensure investor understands ‘non-energy benefits’ of energy efficiency projects
Loop-In Local Investors…clearing investment hurdles
Keep SMMs Abreast of Regulatory and Policy Developments
SMMs need lead time to comply with impending legislation/regulation- Ideally, should factor into strategic thinking
and equipment upgrades
Trade associations do not have the reach to touch all SMMs
Assistance navigating regulatory environment provides a real benefit
May be subject to local requirements as well- Can SMM energy savings contribute to EERS
requirements??
Promote Technology Transfer
Many SMMs operate without dedicated energy personnel—no bandwidth to evaluate new technologies
Technical experts are a trusted resourceTechnological capacity to understand/evaluate different technologiesSee lots of plantsAccess to lots of data—hard figures and anecdotal
Develop a Federal/State database(s) cataloguing capabilities and deficits of emerging industrial technologies:
Energy consumption, Functionality, Reliability, Market maturity, Implementation Costs, etc.
Enable Information Exchange Convene energy personnel of similar
(or different) plants- Forum to discuss energy questions,
challenges, strategies
- Sharing engineering expertise—system optimization, project planning, share outside consultants
• Small Manufacturers more inclined to exchange information on a ‘pre-competitive’ basis (?)
• Plant tours can be valuable in seeing new approaches/techniques
• O&M protocols
Involve Owners/Executives Where Possible
• Close the loop in communication between floor staff and front office
• Streamline decision making and project implementation
• Ensure a mutual understanding of technical and fiscal constraints
Develop a Comprehensive Service Offering
Lean Manufacturing Techniques
(MEPs)
Pollution Prevention
(Green Suppliers Network)
Energy Efficiency(IACs)
Strategy/ Profitability
(MEPs, SBDCs)
-Federal Collaboration in Action-
Economy, Energy, Environment
E3(Economy, Energy,
Environment)
Department of Commerce
Environmental Protection Agency
Department of Labor
Department of Energy
Small Business Administration
Capitalizes on core strengths of each agency
Offers a dynamic framework that can be tailored to participating localities
Stretches individual agency investment
Avoids competition among agency programs
Effective delivery of a comprehensive offering
Snapshot of San Antonio E3 Pilot
**Data gathered by U.S. EPA
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($200,000)
($150,000)
($100,000)
($50,000)
$0
$50,000
$100,000
Annual Cost Savings
Company Investment
Simple Payback (years)
2.52
2.05
5.40
1.481.28
4.99
0.56 2.21
1.421.79
Pilot Totals:Total Demand Reduction: 557 kW
Total Annual Energy Reduction: 2,902,454 kWh
Total Annual CO2 Reduction: 1,744 mtCO2
THANK YOU ON BEHALF OF THE ALLIANCE INDUSTRIAL TEAM
Paul Bostrom
Associate, Industrial Team
R. Bruce Lung
Project Manager, Industrial Team
Jeff Harris
Vice President, Programs