Monday, December 03, 2007

Getting Energy Efficiency on the Executive Radar Screen

Stock analysts will tell you that the typical industrial executive is fully challenged to remain in control of his or her company’s top three business issues. These usually include revenue/profit targets, product development, and “stay-out-of-jail” compliance issues. Energy doesn’t make the list. It’s one of those “other” issues that are routinely delegated down below the executive suite.

This is why it’s so difficult to give away free energy audits. For those of you who don’t know, the U.S. Department of Energy’s Industrial Technologies Program conducts the Save Energy Now effort that provides free energy assessments and energy analysis training to qualified industrial plants. DOE-ITP maxed-out its 2006 budget for this activity in providing 200 assessments. They budgeted for 250 more assessments in 2007, but by October, they were scrambling for takers—so DOE lowered the thresholds of eligibility. At the same time, 250 more slots were announced for 2008.

According to DOE-ITP’s 2006 annual report, there are just over 200,000 manufacturing facilities in the U.S., and probably half of those are eligible to get a free assessment from DOE-ITP. However, not even 500 takers have been identified to date. Of course, no one expects all the eligible plants to participate, but with today’s energy markets being what they are, you’d think there would be a line out the door for this service.

There’s a TON of explanation about Save Energy Now on the DOE website. But for the reasons given above, industrial executives don’t spend a lot of time trolling the Internet for energy-related news. It’s just not on their radar. The program is aggressively promoted via email from DOE, state energy offices, and other intermediaries. But these messages are directed to the usual industrial contacts: mid-level engineers who are rarely empowered to do something radical like invite the government to poke around their plants, which is how Save Energy Now is frequently (and erroneously) perceived.

Energy, as a stand-alone issue promoted by energy people (read: “engineers”), will not capture executive attention. However, it might get noticed if it were attached to one or more of the top three executive issues. It would also help if the message came from the influencers upon whom executives rely for advice. How much more compelling would Save Energy Now be if it were promoted by the U.S. Chamber of Commerce? Also, executive demand for industrial energy assessments would skyrocket if the concept were to be promoted by the accounting community.

Next question: how easy is it to get government agencies to collaborate across their turf boundaries?



At 3:09 PM, Anonymous Anonymous said...

Good day Mr. Russel
The next question would be is, after these companies received their free DOE audit, how many actually did something with these reports. I have been following these reports on the DOE website and then trying to follow up with the company's representatives in an attempt to have them look at our natural gas energy saving equipment.
It almost feels like the DOE pushed them into these audits, and now they are saying "thanks, we will take a look at it when we get time".
The "low hanging fruit" projects are being considered or have been done.
The more intensive projects do cost more initially, but the monthy savings are also much higher. The yearly savings can be incredible.
They can be led to water, but we can't make them drink.


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