This paper examines the importance of ancillary savings and production benefits resulting from energy efficiency measures in industrial facilities. We review results from 81 energy efficiency projects that were developed into separate case studies for the U.S. DOE's Office of Energy Efficiency and Renewable Energy (EERE). We then use a methodology to assess and quantify the energy and ancillary benefits, including production benefits, of these projects and integrate them into the economic evaluation of these projects. This methodology yields a more comprehensive Cost of Conserved Energy (CCE), which can be directly compared to the cost of energy.
The case study assessment shows that ancillary savings and production benefits are quantifiable in 54 of the case studies in the sample (67.8%). The paper compares the CCE values for the data set with ancillary savings and production benefits against CCE values for the data set without such benefits and includes Conservation Supply Curves (CSC) for both sets of CCE values. CSCs are curves that display the cost of energy conservation. The analysis shows that for projects where ancillary savings and production benefits are part of the calculation, the CCE is less than the cost of energy, which signifies that in such cases it is more cost-effective to implement energy efficiency projects than to buy more energy. Since conventional modeling of payback calculations frequently omits ancillary savings and production benefits, the cost effectiveness of such projects is grossly underestimated. The paper concludes with a detailed discussion of one of the projects in the sample.