Tuesday, July 01, 2008

Free Industrial Energy Assistance: What You Should Know

Many industrial facility managers are looking outside their organization for some kind of free assistance for controlling their energy costs. Energy assistance programs of various kinds are conducted by certain state, federal and utility outreach offices. It costs money to conduct these programs, and that money almost always comes from tax payers, utility ratepayers, or from industry associations. On one hand, it can be argued that the cost of energy assistance is an investment in economic development. A more cynical take is that these programs allow industry to benefit from other people’s money. Let’s not rush to judgment. For now, let’s simply review the most common forms of program assistance—and the pros and cons of each.

New technology research and technology (R&D). Leading researchers develop new technologies that may allow industry to make more products with less energy. Since the 1980s, the U.S. Department of Energy (U.S. DOE) has led the charge in pooling costs, risks, and know-how needed for energy R&D. R&D work—and hence the funding—is channeled mostly through universities and national labs.

PROS: By pooling resources and risk, R&D funded cooperatively by government and business consortia makes a wider variety of energy-saving technologies available somewhat faster and with less redundant use of resources. R&D funds ultimately trickle through to the local economies that host the national labs and universities. The universities are not just developing technology—they are also the training ground for the next generation of energy experts.

CONS: R&D efforts usually take years to develop. Note, for instance, efforts led during the late 1990s by the U.S. Department of Energy—industrial energy “roadmaps” that culminated in a “Vision 2020,” or in other words, results that were expected some 20 or more years after their inception. For the 15-person metal fabrication shop in Arkansas or the 100,000 square-foot food processor in Pennsylvania struggling to meet this year’s production targets, the benefits of industrial energy R&D may seem way beyond reach—or even relevance.

Energy information “tool kits” for the do-it-yourself (DIY) plant technician. By the year 2000, government and utility program designers rightly noticed that many industrial facilities simply lacked awareness of energy waste and the means for becoming more energy-efficient. This is when U.S. DOE’s BestPractices effort emerged, wisely focused on the handful of technologies that are common to most facilities, such as steam, compressed air, and motor drives. The “tools” are tip sheets, sourcebooks, diagnostic software, and case studies, all mounted on the BestPractices website-- available for free download via the worldwide web.

PROS: Developed by expertise drawn from industry, government, and academia, the BestPractice tool kit provides comprehensive, unbiased guidance to its users.

CONS: The BestPractices program (and its many spin-offs and imitators) is predicated on the assumption that “if you build it, they will come.” In other words, we assumed that practitioners in industry would readily adopt any and all “how-to” direction if it was given away for free. In practice, we find that is not the case, since many facilities remain indifferent to these materials. Facility managers tell us they lack the time and expertise to pursue information resources, regardless of cost. We should also recognize the lack the incentive to focus on “efficiency” when one is held accountable for meeting production targets at any cost.

Corporate energy management strategy guidance. The U.S. Environmental Protection Agency’s (EPA) Energy Star program attempts to communicate directly to corporate leaders, issuing a message that generally links energy management to profitability, competitiveness, and the abatement of combustion and related environmental risks. The EPA’s body of work encourages industry to implement strategic energy goals, plans, and accountabilities.

PROS: EnergyStar for industry is certainly the deepest and richest well of information regarding corporate energy management planning. Based on lessons learned from the best-of-the-best corporate energy programs, EnergyStar provides a roadmap for designing and implementing a rigorous energy management discipline. It’s all on a website, and it’s free.

CONS: “Energy management planning” is a concept yet to be accepted especially among small- and mid-sized industrial facilities. While top managers are generally interested in reducing energy costs, very few leaders establish the appropriate staff accountabilities to make it happen. People in an industrial environment stake their careers on meeting production targets and growing the business, not achieving “efficiency,” per se. Industry’s common practice is to seek relief in the form of a one-time project—“once and done”—so that they can return to what really matters. “Energy management,” and its emphasis on continuous improvement, implies a new layer of responsibilities which don’t appeal to industrial staff who are already overworked and spread too thin.

Energy audits. An energy audit measures the gap between current and optimal energy performance for a given facility. Why not offer individual facilities some quantification of potential their savings? If industry leaders saw how much value was at stake, would they not be more inclined to cut the waste by implementing greater efficiency? The U.S. Department of Energy has been doing this, to date providing several hundred industrial energy audits for free. In return, the DOE asks only for the privilege of publishing the results of each so that the rest of industry can be informed and inspired by the magnitude of potential savings.

PROS: Some, but not all industrials, will accept a free energy audit. Some documentation of potential savings is provided to those that do. As energy prices go up, managers are beginning to enquire more frequently about energy audits.

CONS: The energy audit concept is poorly understood by many. For one thing, the very act of getting an energy audit fixes nothing. It only provides the roadmap for getting to the savings. Almost always, an energy audit is a technical document written by engineers for an engineering audience. It usually says nothing about the “people” issues that will help or hinder the implementation of recommended improvements. While the number of enquires about energy audits ( and “free” audits in particular) is on the rise. As explained at length elsewhere in this blog, energy audits are not a commodity, and you effectively get what you pay for.

Capital grants.
A handful of entities have attempted to provide grants—to actually give away money—to industrial facilities that commit to a specific energy improvement project.

PROS: The preparation for such grant programs certainly stimulated a lot of discussion about needed technologies.

CONS: In the end, it was actually hard to give away money. Energy “projects,” pursued without the larger context of an improvement program, are often seen as a distraction from all-important production goals. Also, such projects simply represent change—and where there’s change, there’s risk. In a business environment, the time and effort that are devoted to efficiency are expended at the risk of missing all-important production schedules.

Lessons learned? The promotion of industrial energy efficiency depends on a carrot AND a stick. The give-away of free resources will help only if industrial leaders first ensure that their staffs have the goals and accountabilities for making measurable energy improvements.



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