Did you know that the manufacturing sector is the nation's largest user of natural gas, consuming a third of all energy used in the United States each year? It seems obvious if you think about. As such, a modest reduction in industrial use of natural gas or electricity generated with natural gas can have a big impact on national demand. The same goes for energy-hungry businesses. Otherwise, what a waste.

Indeed, by implementing energy-saving projects, a business or factory may be able to reduce its energy consumption dramatically — and save millions of dollars. According to the U.S. Department of Energy (DOE), typical industrial facility can realize savings of up to 25 percent in process heating systems, up to 20 percent in steam systems and as much as 18 percent in motor systems — added up, savings that can reduce a company's natural gas and electric bills and therefore directly affect profits.

Considering the price we pay for oil — financially, source-exhaustibly, environmentally — renewable energy sources are edging closer to competitiveness with traditional energy sources, aided in part by government subsidies and rapid technology development.

Renewable energy sources — biomass, hydrogen, geothermal, solar, wind, ocean energy and hydropower — are virtually inexhaustible in duration, but currently they are limited in energy amount available per unit of time.

The use of renewable energy is not new: five generations (125 years) ago, wood supplied up to 90 percent of our energy needs. Due to the convenience and low prices of fossil fuels, wood use has fallen. Now the biomass, which normally would present a disposal problem, is converted into electricity (e.g., manufacturing wastes, rice hulls and black liquor from paper production).

Interestingly, a Senate bill was introduced last month to extend new federal tax credits authorized in the Energy Policy Act of 2005 through 2010. Among the federal tax credits this Alternative Energy Extender Act extends are the 30 percent tax credit for solar energy systems and the production tax credit (PTC) for wind power. Both are hailed by industry as critical to their continued success, but each is currently a short-lived policy, both coming to a close by 2008 unless Congress acts to reinstate them.

According to a Renewable Energy Access article last month:

The renewable energy industries, especially the equipment- and capital-intensive wind power industry, argue the two-year window is helpful but not adequate for businesses to make substantive investments in infrastructure to meet demand. This short window is cited as partly responsibl[e] for current tight demand for wind turbines and solar panels alike.

The Alliance to Save Energy maintains that the two-year window for the tax credits, which currently are set to expire at the end of 2007, is too brief a period to effect real market transformation and to make energy-efficient buildings the norm. Extending the tax credits through 2010 would allow more time to grow volume and thereby help to lower the initial purchase price.

According to a March 2005 report from market research firm Clean Edge, "the growth of clean-energy markets reflects [renewable energy's] growing acceptance." Global wind and solar markets reached $11.8 billion and $11.2 billion last year, an increase of 47 percent and 55 percent from the year prior. "The market for biofuels hit $15.7 billion globally in 2005, up more than 15 percent from the previous year." (Additional: Biofuel Benefits Go Beyond Environment, Oxford Analytica, April 10, 2006)

Renewable sources such as wind are proving more readily deployed and less expensive in the Midwest than traditional sources like natural gas. Yet government incentives programs, especially the production tax credit for wind energy technology, haven't been around for more than two years at a time; further, they've been allowed to lapse between renewals. According to the American Wind Energy Association, the 1992-started production tax credit provides a credit of 1.8-cent per kilowatt-hour for electricity produced from wind farms during the first 10 years of its operation. The credit recently was extended.

Meanwhile, investment in the second-fastest-growing alternative renewable energy — solar energy — has doubled in the last two years, reported Clean Edge principal and report author Ron Pernick. "The biggest IPO investment is in solar," he said, adding this was because semiconductor companies in the electronics sector are the parents for some of the most successful solar IPOs. However, solar recently has faced a supply chain problem from the U.S. silicon industry. There simply isn't enough silicon to meet the growing demand for photovoltaic solar cells

During this time of high energy prices, the DOE is helping industrial plants save energy with its "Easy Ways to Save Energy" campaign. The DOE has been assessing 200 of the most energy-intensive manufacturing facilities in the U.S. DOE-certified experts have been visiting plants that consume a total of nearly 527 trillion Btu annually, including 327 trillion Btu from natural gas. Collectively, the selected plants and facilities, dispersed across 31 states, represent five percent of all natural gas consumed by the manufacturing sector. Recommendations made on the first six assessments, if implemented, could reduce total plant natural gas consumption by more than six percent and save $10 million per year in energy costs for those plants alone, according to the DOE.

Further, states and state-based organizations are joining the U.S. Environmental Protection Agency (EPA) to improve the energy efficiency of their own facilities and are also encouraging businesses and institutions within their jurisdictions to capture energy waste by reducing their building energy use by 10 percent or more, reports GovPro. The EPA itself uses renewable energy at the majority of its more than 31 regional offices and laboratories. In total, the EPA has contracted to purchase 260 million kilowatt-hours of green power. "Only the U.S. Air Force and Whole Fords Markets LP, a grocery chain, buy more green energy than the EPA," notes a recent Waste News article.

All in all, however, despite downward costs and improving technology, the renewable-energy market in the U.S. still is being held back by supply problems and the same government programs that are supposed to boost development, reports United Press International. Despite this, Clean Edge's report for the renewable sector is bright, projecting large growth in biofuels, wind, solar and hydrogen fuel cells, which had a combined market of $40 billion in 2005 to quadruple by 2015.

For industry plant managers and engineers wanting to develop an action plan, visit the United States Department of Energy's six steps to develop an energy-savings action plan for your plant or corporation.

Earlier: The State of Renewable Energy

Resources

U.S. Department of Energy

Bill Introduced to Extend Federal Renewable Energy Tax Credits
by Jesse Broehl
Renewable Energy Access, March 17, 2006

Alliance to Save Energy Hails Introduction of Bill to Extend Energy Policy Act Energy-Efficiency Tax Credits through 2010
The Alliance to Save Energy, March 14, 2006

The ENERGY STAR Challenge
GovPro, Dec. 19, 2005

EPA becomes 3rd-largest green energy purchaser in U.S.
Waste News, March 23, 2006

Renewable energy investment grows
by Meredith Mackenzie
United Press International, March 24, 2006