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Fully measuring the non-energy dollar


May 29, 2014 - 3:02pm
By Christopher H. Russell, Visiting Fellow, Industry

What is the true value of energy efficiency? Well, we all know that manufacturers use energy to meet their production goals. Energy is the lifeblood of the process and the business of manufacturing. Energy drives not just the machines, but also the pace and magnitude of the wealth created by manufacturers. Because it permeates every stage of the industrial process, energy provides ample opportunity to influence operating margins, returns on invested capital, productivity and product quality. Energy also performs concomitantly with safety and emissions compliance agendas.

In other words, a manufacturer’s energy dollar saved is more than a dollar earned. The challenge is to quantify the non-energy consequences of manufacturing activity. Evidence of this value is found not in the boiler room, but on the balance sheet. And such data is often beyond the reach of the facility engineer or others who traditionally “own” energy duties. Turf issues in industrial facilities may force energy champions to stick to their knitting—the result being that energy decisions are weighed solely in the context of their impact on utility bills. The wider consequences for business performance simply get lost in the noise.

Industrial business leaders are not the only people getting shortchanged by this narrow interpretation of energy value. Utilities and their regulators across North America note the vast potential for industrial energy efficiency to serve as a least-cost energy supply source. While energy efficiency provides economic relief to all ratepayers, energy policy cannot compel industrial investment choices. But maybe the lure of superior business performance can.

ACEEE is now building on earlier research to quantify the dollars provided by non-energy benefits. The ideal outcome is to amass sufficient data from past energy improvements to statistically infer non-energy benefits. We think this effort will require the collaboration of multiple utility jurisdictions, culling through the project feasibility data generated by past and future energy programs.

Existing non-energy value data helps to build awareness, but it’s not enough for quantifying investment results. It’s time to apply the principles of big data to energy efficiency programs. You can help us investigate the potential for achieving meaningful quantification of non-energy benefits. We are looking for industrial program managers and other interested parties to share data. The study will require large volumes of it, derived from industry surveys and utility records. Like any other data collection effort, this one will require consistent definition and measurement. Statistical reliability varies directly with the volume of data collected—so the more the better! If you can help, please let us know. If you don’t have data to share, but are excited by the prospect of quantifying non-energy benefits, you can still help by joining the project’s sponsors. With your help, we can at last begin to uncover the whole value of energy efficiency.