Achieving Superior Energy Performance in U.S. Industrial Plants: Plant Certification for Energy Efficiency Paul Scheihi

1. Achieving Superior Energy Performance in U.S. Industrial Plants: Plant Certification for Energy Efficiency Paul Scheihing Technology Manager Industrial Technologies Program U.S. Department of Energy UNIDO Experts Group Meeting on Industrial Energy Efficiency and Energy Management Standards 21-22 March, 2007 Vienna, Austria

2. Outline • How did the idea for “Plant Energy Certification” evolve? • What is “Plant Energy Certification”? Who’s involved? • What’s the resource and experience base that we’re building upon? • What’s the current framework and proposal? • What’s the value to U.S. industry? • What’s the value to U.S. government? • Results of first “Achieving Superior Energy Performance” meeting • Where do we go from here?

3. How did the idea for “Plant Energy Certification” evolve? What is “Plant Energy Certification”? Who’s involved? What’s the resource and experience base that we’re building upon?

4. How did the idea for “Plant Energy Certification”evolve? • Texasindustrial companies developed the idea in 2003: • Model successful U.S. Department of Labor (OSHA) Voluntary Protection Program (VPP Star); plants get certification of safety practices • Create a tiered approach that facilitates continual improvement in overall plant energy management and system-level practices • Texas industrial companies wanted future “plant certification” to build upon: • U.S. DOE BestPractices tools and information • U.S. DOE Save Energy Now energy assessments • U.S. EPA ENERGY STAR for Industry resources and experience • Challenge: Effectively integrate these key pieces

5. What is “Plant Energy Certification”? • An Industry-Government partnership addressing the current need for a consistent, performance-based framework that fosters continuous progress in industrial energy efficiency. • The proposed framework provides a mechanism to help individual companies: • Assign greater value to energy efficiency improvements • Get verification of the resulting energy savings • Receive public recognition for achievements

6. U.S. Industry (currently only end users) U.S. Department of Energy’s Industrial Technologies Program U.S. Environmental Protection Agency’s ENERGY STAR for Industry Program U.S. Department of Commerce, Manufacturing Extension Partnership (MEP) Program Texas Industries of the Future Partnership American National Standards Institute (ANSI) Who’s involved?

7. What’s the resource and experience base that we’re building upon? U.S. DOE BestPractices Products & Services Tools Information • Process Heating • Steam Systems • Plant Energy Profiler • Motors & Pumps • Fans • Website • Information Center • Tip Sheets • Case studies • Webcasts Assessments Training • Energy Savings Assessments • Industrial Assessment Centers • Basic • Advanced • Qualified Specialist

8. What’s the resource and experience base that we’re building upon? Save Energy Now initiative The U.S. Department of Energy (DOE): • Created initiative in 2006 based on more than a decade of experience in industrial system energy efficiency • Trains DOE energy experts to work with plant energy teams to identify opportunities for improving steam, process heating, pump, or compressed air systems through Energy Savings Assessments (ESAs) • Together with energy experts, trains plant personnel to apply DOE software analysis tools to identify additional opportunities • Recognizes plants with high energy savings resulting from implementation http://www.eere.energy.gov/industry/saveenergynow/

9. What’s the resource and experience base that we’re building upon? Save Energy Now: Energy Savings Assessment Status (March 15, 2007) • 200 assessments completed • Natural gas savings = 52 trillion Btu/yr • Equivalent to 725,000 U.S. homes • Carbon dioxide avoided = 3.3 million metric tons/year (7% of total US greenhouse gas emission growth, 2004 – 2005) • Cost savings opportunity = $475 million per year • Savings implemented or planned = $222 million (at 134 plants) • 2 – 4 years • Modify steam turbine operation • Use oxygen for combustion • Change process steam use > 4 years • Install CHP system • < 9 months • Improve insulation • Implement steam trap program • Clean heat transfer surfaces • 9 mo. – 2 years • Heat feed water with boiler blowdown • Lower excess oxygen • Flue gas heat recovery Estimated Payback Periods for Recommended Actions

10. What’s the resource and experience base that we’re building upon? U.S. EPA & ENERGY STAR for Industry • Provides guidelines, tools, and info for strong energy management programs • Corporate energy program assessment • Plant energy program assessment • Energy team development • EPA works with focus industries to resolve barriers to improved energy performance • Make awards to top achieving companies • Provides Energy Guides and facilitates forums for energy professionals • Offers metrics & recognition as tools for management to motivate achievement • Develops specific sector Energy Performance Indicators (EPIs): Top quartile plants are eligible to earn the ENERGY STAR: • Current sectors with EPI: Automobile assembly, cement, wet corn milling, and petroleum refineries • Under development for 2007: food processing, pharmaceuticals, glass • Under Development for early 2008: petrochemicals • Future: pulp & paper

11. What’s the resource and experience base that we’re building upon? American National Standards Institute (ANSI) and MSE 2000:2005 Energy Management Standard • ANSI is the US standard-making representative to ISO • ANSI energy management standard since 2000 • Developer: Georgia Institute of Technology • Uses “Plan, Do, Check, Act” model • Refine MSE 2000:2005 and integrate into “Plant Energy Certification” standard for widespread use

12. Build on Existing Resources Present DOE, EPA & Other Industrial Energy Management Resources DOE Save Energy Now Energy Assessments DOE BestPractices Tools & information EPA Energy Management Guidelines & ANSI Energy Management Standard Future ANSI Plant Energy Management Certification Standards ANSI System Level Energy Assessment Protocols ANSI Energy Savings Measurement & Validation Protocol ANSI Plant Energy Management Standard

13. What’s the current framework and proposal? The proposed framework for achieving superior energy management performance would include: • ENERGY STAR Plant • Partner Plant • Certified Plant

14. Plants Best U.S. plant Best World plant How will this framework affect plant energy performance? Certified Plant Partner Plant Number of Plants Worst U.S. plant Avg. U.S. plant Practicalminimum EnergyPerformance

15. Plants Best U.S. plant How will this framework affect plant energy performance? Certified Plant Partner Plant Advanced Technology Number of Plants Worst U.S. plant Avg. U.S. plant Practicalminimum EnergyPerformance Over Time

16. What is industrial plant energy management certification? • Framework for a consistent approach to industrial energy efficiency that does not currently exist • Technically sound yet flexible method for integrating energy efficiency (and perhaps renewable energy) improvements into existing industrial management systems (e.g., ISO, Six Sigma) • Performance-based1, progressive recognition path for industrial facilities of ANY age, size, or sector that adopt energy management practices for continuous improvement 1 Plants would establish an overall energy intensity baseline and achieve a minimum energy intensity improvement goal within a certification period

17. What will the Certification Program include? Four elements are anticipated for the voluntary third-party certification program: • Energy Management Standards (revision of existing ANSI standard) • Standardized Assessment Protocols for industrial systems (pumping, compressed air, steam, process heating) building on DOE/industry best practices • Certified Practitioners, recognized by third party, provide technical assistance to meet energy management standards and/or system protocols • Plant certification, measurement, and validation of energy savings by a third-party certifier using an ANSI-accredited process

18. Proposed Progression to Certification • Demonstrates compliance with ANSI energy management standard through accredited certifier • For initial certification, identifies energy intensity performance improvement opportunities. • Achieves validated initial energy intensity performance improvement (accommodate plants that are already using best practices) • Reports plant energy savings and energy intensity improvement (%) annually to third-party certifier • Re-certifies every 3 years by documenting energy savings (and perhaps renewable energy projects) and demonstrates a minimum level of continuous improvement in energy intensity within the re-certification period Certified Plant • Fosters continual improvement in plant energy management • Profiling plant energy use, conducting assessments, tracking energy savings for projects (can use DOE Plant Profiler tool, energy savings protocols, and/or Qualified Specialists) • Documents and reports energy savings annually. PartnerPlant

19. Product Supply Chain ExtractionOil, Raw Materials ProcessingBulk Materials FabricationForming & Assembly CommercialRetail Consumer What’s the value to US industry? • Cut operating costs while increasing productivity • Reduce emissions without negative effects on operations • Financial community recognition of companies for reducing global warming via superior energy management practices • Corporate influence on program design, ensuring attainment of energy management goals without undue time or cost burdens • Certified plants gain preferred supplier status Market Influence to adopt industrial standard

20. What are the benefits to U.S. Government? • Greatly increases the number of U.S. plants and suppliers on the path toward continuous improvement in energy management performance • Launches a successful, voluntary program with measurable energy and environmental benefits • Meets energy savings and greenhouse gas reduction targets through voluntary efforts that help, rather than hurt, U.S. industries • Leverages expertise of industrial end-user companies and various supplier associations in designing standards that are credible and cost-effective to implement GOALS 2010: First industrial plant receives third-party certification 2017: 10,000 industrial plants certified, representing >50% of U.S. industrial energy consumption

21. Recognition and Incentives for Energy Management Performance Future: 2010 and Beyond Present: 2007 EPA Energy Star Rating Label for sectors with EPA Energy Performance Indicator (EPI) EPA Energy Star Rating Label for sectors with EPA Energy Performance Indicator (EPI) DOE recognition of energy savings at high-implementing Save Energy Now plants DOE recognition of energy intensity improvements at certified plants States/utilities provide incentives for energy savings at certified plants

22. Goal: 2017 • An ANSI energy management standard will be widely accepted throughout U.S. industry • 10,000 third-party certified manufacturing plants, collectively consuming >50% of U.S. industrial energy • Certified plants are preferred suppliers • Tradable tags are routinely provided to certified manufacturing plants as energy savings incentives and tradable carbon credits

23. “Achieving Superior Energy Performance” Meeting • When/Where: March 6, 2007, Washington, DC • Who: 30 industry, and 27 government and NGO participants • Purpose: To present proposed framework to US industrial end users and receive their input/feedback on three questions: • Given your plant(s) energy efficiency efforts, what characteristics of the proposed framework would advance the energy efficiency program? • What would be potentially problematic? • What incentives would make the proposed framework attractive to your company and widespread among industry?

24. Results: “Achieving Superior Energy Performance” Meeting • Industry expressed need for voluntary program to assist all US manufacturing plants in improving energy efficiency; • Streamline access of tools/information to plants to save energy in the near-term; • Assist plants to develop energy management plans; • There’s value certifying a facility's energy management program that produces sustainable results and ensures the engagement of all levels of plant personnel; • Plant certification would address measurement & verification of savings; • Individual energy efficiency projects could have energy savings validated; could provide tradable benefits; • Certifying plants for energy efficiency has to "make the business case" for participation; balance of cost versus benefit; • Financial incentives (tax credits, loan guarantees), would increase program attractiveness for "early adopters"

25. Where Do We Go From Here? Next Steps: • Form Superior Energy Performance steering committee (end users, ANSI and government) • Decide how to engage non-end users into the standards development process (equipment suppliers, utilities, states, retailers, NGOs) • Develop and launch voluntary, “Partner Plant” program to reach thousands of plants this year. • Develop “Certified Plant” program in next 3 years.

26. Need More Information? Go to “Superior Energy Performance” website http://www.superiorenergyperformance.net/ Paul Scheihing 1-202-586-7234 paul.scheihing@ee.doe.gov