INDUSTRIAL ENERGY MANAGEMENT APPROACH and BUSINESS CASE

1. INDUSTRIAL ENERGY MANAGEMENT APPROACH and BUSINESS CASE Robert Hitch, P.E. Georgia Institute of Technology Sponsored by Oak Ridge National Laboratory

2. Energy Use Must Be Managed • User lack of control of prices, politics, or the global economy. • A management process is needed to meet business goals and objectives. • ISO 50001 standard offers a mechanism to manage energy. • Plan-Do-Check-Act framework. • Spans most sectors of the economy

3. Primary Energy Use by Industry Energy Consumption for Kazakhstan Industrial Sector – 666TBtu (24MTCE) • ISO 50001 targets energy management in: • industry • commercial buildings and • the government • The impacts could be substantial. Kazakhstan 2007, data source International Energy Agency online, August 2010

4. Why an Energy Management System? • An energy management system solution. • The most common way to achieve energy efficiency • The Plan-Do-Check-Act model of management systems has been proven. • It integrates energy issues into existing management systems for continual improvement. • Applies to industrial, commercial, institutional, and transportation sectors • Helps meet resource use efficiency targets • Benefits of an ISO Standard: • Compatible with other ISO management system standards. • Multi-national companies may use one system in all of their facilities.

5. Supportive Policies for National Energy Management Standards • In countries with existing standards: • Voluntary energy management standards • Target large industrial plants • Technical assistance is offered • Case studies publicize benefits • Recognition for outstanding performers • In addition, most countries: • Offer financial incentives for compliance • Provide training • Provide networking • Several countries offer system optimization training Kazakhstan is a member of TC242 and 70 other ISO standards Committee for Technical Regulation and Metrology email: dyussikeyeva_l@memst.kzWeb: www.memst.kz

6. Increased International Focus on Energy Efficiency • China plans to reduce energy use by 20% per unit of GDP below 2005 levels by 2010 • G-8 meetings now include energy efficiency as a major topic. • The International Energy Agency recognizes energy efficiency as a primary source of short-term GHG emission reductions. • The U.N. Industrial Development Organization (UNIDO) is promoting systems energy efficiency and energy management standards for both developed and developing nations. • Through Partnerships, the U.S., and several other countries arepromoting greater industrial energy efficiency.

7. So ISO Gets Involved International Organization for Standardization (ISO) is initiating a broad portfolio of initiatives to promote energy efficiency, • ISO 50001, • ISO CSC /Strategic Task Force on Energy Efficiency & Renewable Energy Sources

8. History of ISO 50001 • In March 2007, UNIDO hosted the first meeting proposing an energy management standard. The ISO Secretariat accepted the UNIDO request. • UNIDO initiated a program to foster coordination among various nations to develop an international standard. The preparatory meeting was in Beijing in April 2008. • PC 242 was created to guide the development of ISO 50001. • 53 participating nations worldwide [includes KAZMEMST] • Four-nation leadership: U.S., China, Brazil, U.K. UNIDO has liaison status. http://www.iso.org/iso/iso_technical_committee?commid=558632

9. ISO Energy Management Standard ISO 50001 will establish a framework for industrial plants, commercial facilities, and organizations to manage energy. • Potential impacts: • Managing energy more effectively (10 to 30%, and greater). • May influence up to 60% of the world’s energy use. • Adoption of ISO 50001 will: • Reduce energy costs • Make manufacturing more sustainable • Create demand along the manufacturing supply chain • Drive National carbon reduction programs • Improve International climate agreements • Status of ISO 50001: • Under development by ISO Project Committee 242; 52 countries participating • Draft International Standard released April 2010 • Ready for publication by mid-2011. Applies to industry, commercial buildings, and transportation fleets

10. Scope of ISO 50001 This International Standard requires an organization to: • Establish, implement, maintain and improve an energy management system, • Take a systematic approach • Achieve continual improvement of energy performance, energy efficiency and energy conservation. This International Standard specifies requirements for: • energy supply, uses and consumption • measurement, documentation and reporting, • design and procurement practices for energy using equipment, systems, processes, and personnel. • applies to all factors affecting energy use, which can be monitored and influenced by the organization. • does not prescribe specific performance criteria with respect to energy • designed to be used independently, but it can be aligned or integrated with other management systems. It is applicable to all organizations.

11. Scope of ISO 50001 • Enables a systematicachievement of continualimprovement in energy performance, energy efficiency, and energy conservation. • Imposes requirements on energy supply and consumption: • Measurement • Documentation and reporting • Design and procurement practices for energy-using equipment and systems • Processes and personnel • Applies to those factors that can be monitored and influenced by the organization • Does not prescribe specific performance criteria with respect to energy. • Designed to be used independently, yet can be aligned or integrated with other management systems (e.g., ISO 9001 and 14001). Applicable to all organizations.

12. ISO 50001: Moving Forward • Foster wider use of organizational policies; specify energy efficiency in the supply chain • A tool to move the market toward greater energy efficiency • Use ISO 50001 in a greater variety of organizations and businesses: industrial, commercial, public, transportation, etc.

13. Challenges Ahead • It is hard to start something new • Management support is critical • A baseline needs to be established for benchmarking • This is a new way of managing and evaluating their business • Infrastructure may not be available yet

14. Business Benefits of Implementing an Energy Management System • An energy management system can achieve the following: • Establish a baseline of energy use and better energy data • Active management • Reduce environmental impact • Continual improvement in energy intensity • Document savings for internal and potentially external use (e.g., emissions credits)

15. Case Study • A pilot implementation program for EnMS, Save Energy Now, and Superior Energy Performance Leaders • Five facilities in Texas • Cook Composites and Polymers Co. Houston Plant • Freescale Semiconductor Inc. Oak Hill Plant • Frito-Lay San Antonio Plant • Owens Corning Waxahachie Plant • Dow / Union Carbide’s Texas City Operations

16. Industry Progression toward Higher Energy Performance Save Energy Now LEADER Program Provides resources to companies (usually multiple facilities) that pledge to reduce their energy intensity 25% in 10 years. Guidance and tools can also helpplants and companies gain ISO and SEP certification. Recognition Tech. Assist. Superior Energy Performance Single facility ISO 50001 conformance with validated energy performance improvement Training ISO 50001 ISO 50001 Assessments • Components in place: • Baseline • Policy • Plan • Team/Leader Tools ISO 50001 is a foundational tool that any organization can use to manage energy. Improved Energy Management • Plan • Do • Check • Act

17. General Benefits of EnMS at Implementing companies • EnPI Tool aided facilities in statistical modeling of energy consumption. • Increased involvement in energy management. • Facilitated a better understanding of current plant processes that relate to energy (such as energy purchasing, design, calibration, etc). 17

18. Specific Benefits to Freescale • Identified savings opportunities of 1.1 million KWH/yr for pumping/chilled water • Identified savings opportunities of 0.4 million KWH/yr for compressed air • Identified opportunities for improvement in reliability of the compressed air system Transferring program knowledge to second facility 18

19. Specific Benefits to Dow • Identified opportunities to recover heat from condensate and to purchase steam at a higher temperature • Validated the currently energy efficiency project list • Identified over $6,000,000 in energy saving opportunities Dow Energy Systems and IPA facilities are piloting the program with rollout expected for the remainder of the facility. 19

20. Specific Benefits to Owens Corning • Assessments validated the previously determined course of action. • Assessments served as a training opportunity for energy engineers throughout the company. Rollout of the program is expected within other facilities in the division, and eventually further divisions within the company. 20

21. Specific Benefits to Frito Lay • Compressed air energy assessment identified opportunities equal to 51% of operating costs for compressed air system. • Process heating energy assessment identified opportunities equal to 5% of operating costs for process heating systems. Sharing best practices learned in implementation with its other North American manufacturing facilities 21

22. Specific Benefits to CCP • Assessments identified opportunities totaling 30 percent of system natural gas use. • Short term actions and low cost investments have been implemented resulting in savings of $40,000. CCP is introducing other CCP sites, not participating in the pilot project, to energy management system concepts. 22

23. Contact Information • Georgia Institute of Technology • Robert Hitch, P.E. • rjhitch@gatech.edu • Oak Ridge National Laboratory • Michaela Martin, P.E. • martinma@ornl.gov