Following the Leaders To Manufacturing Sustainability
The path to sustainability in the manufacturing sector may seem like an exceedingly daunting one. Manufacturers are aware that consumers and companies along the supply chain are increasingly concerned about environmental considerations and making buying decisions based on mystifying terms like “carbon footprint,” “energy intensity rates” and “eco-responsibility.” Mystery is bad enough, but combined with the effects of competition (particularly competition staffed by cheap foreign labor), rising energy costs, global recession and the specter of new government legislation on the horizon, the scenario can seem more like a nightmare. For this reason, it’s important for U.S. manufacturers to understand not only how they can “go green,” but how it can benefit their businesses financially and not only in some fuzzy feel-good kind of way. No one expects companies to operate out of sheer charity and good karma; the benefits need to pay both externally and internally.
One approach to finding a practical balance between sustainability and internal benefits may be a partnership with the U.S. Department of Energy’s Industrial Technology Program (ITP). The DoE’s Save Energy Now program is a manufacturing-friendly initiative that aims to drive a reduction of at least 25 percent inside 10 years. Since 2006, over 2,000 plants have received energy assessments through Save Energy Now. To date, those assessments have identified opportunities for $1.3 billion in identified cost savings, 119 trillion Btu of natural gas savings and 11.2 million metric tons of CO2 savings.
Following the LEADERS
The Save Energy Now program features an initiative called LEADER, a more extensive and intensive program that provides technical assistance and resources to companies that make a formal pledge to improve their industrial energy efficiency. Begun in 2005 as part of the Energy Policy Act, the program’s goal is to help companies make changes to optimize their energy use in areas such as steam systems, processed heat, pumps, fans and motors. Specifically, companies that join the LEADER program voluntarily pledge to reduce their energy intensity by 25 percent in 10 years.
Participant companies pledge to reduce energy intensity while at the same time improve their bottom lines and their carbon footprints, mitigate volatile energy costs, improve business planning, and enhance their competitive position. To begin the process, LEADER companies designate an energy manager who will liaise with the ITP. Together with their designated ITP technical account manager, they produce an energy baseline and develop an energy management plan. The ITP provides industry benchmark comparisons, resources and tools for energy analysis and management, technical and financial assistance, and savings measurement and verification to help companies determine that the changes they have made are leading to the results they hoped for.
Current participants among the 32 LEADER companies include Boeing, GE, Dow Chemical, Intel, AT&T, United Technologies, 3M and Lockheed Martin. As designated LEADER companies, these organizations are expected to be more than just test cases; they are expected to serve as role models for others wishing to make similar changes.
Why Target Manufacturing?
Industry uses 30 percent of all energy in the U.S. and accounts for 27 percent of the country’s carbon emissions. In the industrial sector alone, new energy efficiency measures have the potential to reduce expected energy demand growth by more than 20 percent by 2020. According to the ITP, there is a great deal of opportunity, or “low hanging fruit,” in the industrial sector to increase efficiency (and save energy and money as a result) without complex changes to operations.
Challenges, of course, are many, and include cheap foreign labor, pressure to appear “green and sustainable,” government regulations such as carbon emissions and cap and trade, energy price volatility and competition for resources.
The biggest initial challenge, however, may lie in attaining a proper level of internal corporate support. Sustainable programs need to come from the top down; as a result, there must be management buy-in. Many companies have found that the science and technology are the easy parts – it’s the people who can be the hard part, particularly at the executive level. To be effective, a sustainability program must have the entire organizational chain engaged in energy efficiency, a goal that the Save Energy Now program was designed to assist with.
Energy efficiency programs often suffer from the perception that the rewards are abstract and very far in the future. However, using energy audit data from the DoE’s ITP experts, LEADER companies have been able to invest in energy efficient upgrades that generated substantial returns in two years or less. For upgrades that had a payback of nine months or less, companies saw a 183 percent return on their investment (see Figure 1).
To get a better grip on the kinds of efficiencies being realized by companies in the Save Energy Now program, the ITP has assembled a collection of case studies, which are available here.
– Tracey E. Schelmetic