Can energy-intensive manufacturers be winners under the Clean Power Plan?

There is a concern that any new environmental regulation can hurt the bottom lines of energy-intensive manufacturers. In the case of the EPA Clean Power Plan, states that comply with the rule by investing in energy efficiency will find the opposite is likely to be true: their businesses will be more productive and their economies will grow.

A coalition of energy efficiency and industry representatives spread that message last week in a letter urging governors to include industrial energy efficiency in their plans to comply with the Clean Power Plan. Fifteen organizations, including ACEEE, signed the letter and sent it to governors across the country to illustrate the multiple benefits that industrial sector energy efficiency provides, and to suggest tools and resources to help states assess industrial efficiency opportunities.

There is great potential in the industrial sector for saving both energy and money. A recent study led by the Department of Energy estimated that up to 32 percent of industrial energy use could be saved through cost-effective efficiency measures. These savings could significantly contribute to state efforts to comply with the Clean Power Plan, which clearly identifies energy efficiency as an important, proven strategy for cost-effectively lowering carbon dioxide emissions from the power sector. Meanwhile, many states harness only a fraction of their industrial efficiency potential, even though industrial programs have a lower cost of saved energy than any other end-use sector.

To help states capture these industrial sector savings in their compliance plans, a short list of helpful resources accompanies the coalition letter. The list distills the top ten most useful resources on industrial efficiency that states can use to assess market potential, evaluate options for policy and program design, and obtain guidance on including industrial efficiency in a state compliance plan. Several of the resources were discussed in detail during a July 31 webinar hosted by David Gardiner and Associates. Audio and slides of presentations given by the Regulatory Assistance Project (RAP), ACEEE, and Institute for Industrial Productivity (IIP) are available separately online.

The states and their industrial customers will end up better off if states commit to including industrial sector energy savings in their strategy for meeting Clean Power Plan targets. Industrial energy efficiency can achieve significant, low-cost emissions reductions, while also increasing in-state jobs, increasing economic competitiveness, and improving energy reliability. At the same time, industrial customers can also earn revenue from Clean Power Plan crediting mechanisms that encourage and reward the implementation of energy efficiency in the industrial sector, in addition to lowering their own operating costs through energy efficiency investments. That’s why states can’t afford to ignore industrial energy efficiency as they piece together their compliance plans.