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Industrial Energy Efficiency Program Best Practices
National Governors Association Policy Academy Philadelphia, Pennsylvania March 5th, 2013 Ethan Rogers, Senior Program Manager
American Council for an Energy-Efficient Economy (ACEEE)
• ACEEE is a nonprofit 501(c)(3) that acts as a catalyst to advance energy efficiency policies, programs, technologies, investments & behaviors.
• 50 staff in DC, DE, MI, WA & WI • Focus on end-use efficiency in industry, buildings,
utilities & transportation • Other research in economic analysis; behavior;
national, state & local policy. • Funding:
◦ Foundation Grants (52%) ◦ Contract Work & Gov. Grants (20%) ◦ Conferences and Publications (20%) ◦ Contributions and Other (8%)
• www.aceee.org
Types of Industrial Energy Efficiency (IEE) Programs
• Technical Assistance & Training • Prescriptive rebates • Custom Program • Self-Direct • Industry Specific • Energy Management • Market Transformation
ACEEE Report: Follow the Leaders http://aceee.org/research-report/ie112
Breakdown of Industrial Energy Efficiency Programs and Spending by Type, 2010 Type of Program 2010 Estimated Total
Spending throughout U.S. Percent of
Total
Utilities and Public Benefit Fund Organization
$737,000,000 84%
State Agencies and Public Universities
$ 74,000,000 8%
Nonprofit Organizations and Other Groups
$ 39,000,000 4%
Federal National and Local Deployment
$ 29,000,000 3%
Total, non-ARRA $879,000,000
2010 ARRA Spending $228,000,000 additional
Total, including ARRA $1,107,000,000
Sources: ACEEE Report IE121
Training & Technical Assistance
The most efficient system can use more energy if not operated properly!
The first and last steps should always include training people
Prescriptive and Custom Rebate Programs
Prescriptive • $/item • Good for:
• common equipment with;
• Simple metrics • Examples:
• Lighting • Water heaters
Custom • $ / kWh or MMBtu • Suited for upgrades,
expansions, updating, & refurbishing buildings
• Examples: • Heat exchangers • Compressed air system • New production line
Self Direct Industrial Energy Efficiency Programs • They offer some “relief” from Public Benefit Charge,
(PBC) by offering an exemption from, rebate against, escrow of, or credit to the fees paid by the participating customer;
• They are officially sanctioned and administered by a utility, public service commission or state energy department;
• They expect some energy savings in return by assuming, requesting or requiring that the participating customer invest some or all of the saved money back into energy efficiency projects on site.
States with structured self-direct States with less structured self-direct States with PBC in place but no self-direct option States with opt-out States with no PBC States with pending/possible self-direct
Self-Direct Program Options in the United States
http://aceee.org/research-report/ie112
Opt-Out Self-Direct Type of program
Opt-out Less structured More structured, lower oversight
More structured, higher oversight
Payment of PBC None None Fully/partially on
bill Fully/partially on
bill
M&V of savings None None/minimal Minimal, self-reported
Minimal to substantial
How funds used Firm assumed to use saved PBC funds for energy
efficiency
Firm assumed to use saved PBC funds for energy
efficiency
Rate credit or project rebate
Personal escrow account, rate
credit or project rebate
Follow-up None None to minimal Minimal Minimal to substantial
Examples NC, KY MN, MO MT, OR WA, CO
Public Benefit Maximization
Public Benefit Maximization
Opt-Out/Self-Direct Program Continuum
Sources: Elliott and Chittum 2009, Young 2011, Stipe 2011, Helmers 2011, Landers and Montgomery 2010, Edwards 2011, Schutt 2011, Walker 2011, Mauney 2011, Landers 2011, Goetze 2011, Romero 2011, Zarnikau 2011, Wankum 2011
Reverse Auction
How it works
• Fund amount is set • Companies bid in
energy saving and desired amount of financial assistance
• Scored and distributed on a $/kWh (or MMBtu)
Pros & Cons
• Lowest cost energy savings
• Get mostly low-hanging fruit
• Miss large projects with big long-term savings
Industry Specific
Provide a full suite of services targeting a large portion of a local industrial base that have common opportunities
• Require commitment • Establish Energy Plans • Best practices training, may
include establishing energy management systems
How can an Energy Management System (EnMS) drive IEE projects
Energy is a variable cost of production, • Therefore: it should be measured,
monitored, managed and forecasted • These activities are best accomplished
through a management system, and; • A continuous improvement program
Market Transformation
• Intended to make lasting changes in the market with respect to EE technology
• Overcome specific market barriers • Examples: • ENERGY STAR in new home construction • Retro-Commissioning • Multi-family residence • Combined Heat & Power (CHP)
Measurement & Verification (M&V)
What is Measured
• Program and private investment
• Energy saved • Influence of incentives • Durability of savings All = Cost Effectiveness
Who Uses Results
• Policy makers • Regulators • Program managers • Evaluators • Utilities
Admonitions for M&V
• Establish a baseline early • Don’t obsess over net-to-gross. Be as
concerned with Spill-Over as Free Riders • Be sure to link what is measured to
program goals. Too much or the wrong information can work against you
• Get enough data to tell the story but not so much that you annoy customers
• Update M&V with program changes
Valuing CHP in an Resource Standard
9 units(Losses)
Power Plantfuel
(121 units)
7(Grid
Losses)
UsefulElectricity
35units
50units
UsefulHeat
Boilerfuel (59units)
180 units
Grid
BOILER
CHP
15 units(Losses)
Separate Heatand Power
Combined Heat and Power
CHPsystem fuel(100 units)
100 units
UsefulElectricity
UsefulHeat
PowerPlant
79(Gen.
Losses)
Give Value to the Difference
Conclusions
• Energy efficiency is cheaper than new generation and T&D
• Industrial energy efficiency can be least cost energy efficiency, however;
• It is difficult to measure and validate • Program administration requires a
higher level of technical capability • It doubles as economic development
Contact Information: R. Neal Elliott, Ph.D., P.E. [email protected] 202-507-4009 Ethan A. Rogers [email protected] 202-507-4751 Anna Chittum [email protected] 206-938-7585 Daniel Trombley [email protected] 202-507-4008 Chris Russell [email protected] 202-507-4749
