1999 ACEEE Summer Study on Energy Efficiency in Industry

1999 ACEEE Summer Study on Energy Efficiency in Industry

Industry and Innovation in the 21st Century

Sheraton Saratoga Springs
Saratoga Springs, NY
June 15, 1999 to June 18, 1999

Conference Chair:

Helena Chum, National Renewable Energy Laboratory

Highlights of the 1999 ACEEE Summer Study On Energy Efficiency in Industry
Howard Geller, former Executive Director, ACEEE

The American Council for an Energy-Efficient Economy (ACEEE) held its third biennial Summer Study on Energy Efficiency in Industry in Saratoga Springs, New York in June 1999. This conference was devoted to technology, policy, and implementation issues related to industrial energy use. The study addressed especially the nexus of energy efficiency, environmental quality, and economic productivity. Two hundred experts from around the world attended the 1999 Summer Study. The resulting 840-page conference Proceedings included 73 peer-reviewed papers.

The theme of the 1999 Summer Study was "Industry and Innovation in the 21st Century." Competitiveness is a key issue and innovation now comes from all over the world. Human ingenuity will continue to harvest scientific and technological advances to the benefit of society. Many industries are fundamentally changing the way they do business and their areas of emphasis. Information technologies help achieve those changes. These trends have implications for industrial energy efficiency strategies at the international, national, state, local, and corporate levels.

One plenary speaker, Mr. Ged Davis, Vice President of Shell's Global Business Environment, prognosticated on the energy technologies of the 21st century. The presentation explored past and present technology innovations and societal factors that led to specific convergence of technologies. This convergence shaped today's energy sources with petroleum as the major source of transportation fuels for our vehicles and transportation systems, and a combination of coal, natural gas, petroleum products, and electricity serving industry's energy needs. Mr. Davis then explored future convergence of technologies and gave examples from Shell's work and investments. There is no doubt that at some point in the future, fossil energy sources will decline and other sources will emerge. Natural gas will increasingly become important as the cleanest of the fossil resources. Renewables and hydrogen are likely to emerge as major future energy sources.

One of the hottest topics of the conference was productivity benefits from energy efficiency projects. By quantifying non-energy benefits that often follow energy efficiency improvements and expressing them in terms that corporate managers can easily understand, the value of efficiency measures is enhanced and the chance that projects can be approved is increased. Case studies of non-energy impacts were presented for an aluminum shelter, a steel tube manufacturing plant, a foundry, a cement mill, and a petroleum terminal. Some show return on investment jumping from 5 years to 5 months when non-energy benefits are quantified and incorporated in the cost-effectiveness analysis.

Several companies presented their own case studies on how they are improving energy efficiency and productivity. Johnson and Johnson described how it is implementing "best practices" across its 188 facilities operating around the world. It achieved its goal of reducing energy intensity (energy consumption per unit of output) by 10 percent during 1991-96. Johnson and Johnson then set a more ambitious goal of a 25 percent reduction in energy intensity by 2000 (using 1991 as the reference year) in most regions. As of early 1999, it was 95 percent of the way to meeting this goal in its 96 U.S. facilities, with the vast majority of projects providing a payback of three years or less. Other company case studies were highlighted in a session featuring U.S. Environmental Protection Agency's Climate Wise partner companies.

The Summer Study also addressed the progress being made in voluntary programs to reduce energy use and greenhouse gas emissions in industry. Papers cover the experience with these programs in both Europe and North America. The Proceedings has a wealth of information on the pros and cons of various programs—how they compare across countries and which strategies appear to be working best.

Another topic that generated significant interest at the 1999 Summer Study was combined heat and power (CHP). One presenter summarized the European perspective and experience where CHP has achieved a high electric supply market share in some countries (40 percent in Denmark and 30 percent each in Finland and the Netherlands). Representatives of both the U.S. Department of Energy and the U.S. Environmental Protection Agency presented the federal strategies to increase the implementation of CHP in the United States. Strategies include changes to permitting procedures, inclusion of CHP-friendly strategies in the federal restructuring legislation, and supporting tax credits and changes in depreciation schedules, among others.

Several process industries were highlighted at the Summer Study, including chemicals, pulp and paper, metals and metals fabrication, and glass. Some of the highlights included: an analysis of efficiency improvements in the U.S. metal casting industry; reports on the status of U.S. Department of Energy's Industries of the Future program with the aluminum, paper and pulp, and glass industries: and an analysis of the potential energy and carbon emissions savings from expanding materials recycling and reuse as well as biomass feedstocks in Germany. Policies for promoting plastics recycling in Germany and the United States also were reviewed.

The effects of electric utility restructuring on operations and maintenance programs in industry, aggregation opportunities, choosing suppliers and negotiating contracts, and also innovation received considerable attention at the 1999 Summer Study. A number of papers addressed the evolution of energy service companies (ESCOs), including developments related to performance contracting and the formation of strategic alliances to offer a wide range of services including but not limited to energy efficiency services.