Pathways to Energy Management Programmes – Gaining through Saving, Amelie Goldberg

Industrial Productivity I N S T I T U T E F O R

Sharing best practices for low carbon enterprises w iipnetwork.orge [email protected]

Pathways to Energy Management Programmes -‐ Gaining through Saving

IPEEC pre-‐sessional workshop EE Global, Orlando, FL Amélie Goldberg March 27, 2012

PresentaFon overview

•  About IIP •  IIP’s relevant research •  The IEA-‐IIP Policy Pathway •  Energy Management Programmes (EnMPs) •  Importance of drivers & implementaFon support •  The Policy Pathway: 10 steps to delivering EnMPs •  EnMS in the Supply Chain •  Key messages and Future Pathways

IIP at a glance…

The IIP team and Strategic Advisory Group •  Sharing and disseminaFng best pracFces,

including bridging the gap between government policy and industry implementaFon

•  PiloFng scalable projects for GHG miFgaFon

•  FacilitaFng the creaFon of innovaFve financial mechanisms

The Ins(tute for Industrial Produc(vity provides

companies and governments with the best energy

efficiency prac(ces to reduce energy costs and

prepare for a low carbon future.

IIP’s Relevant Research

2.   Policy Pathway – IEA & IIP Partnership –  Policy Pathways designed to help implement

IEA’s 25 Energy Efficiency RecommendaFons –  Case studies of good pracFce, involvement of

internaFonal experts –  Expert Workshop 30 September 2011 –  Publica3on April 2012

1.   Promo(ng EnMS through Programmes, Incen(ves and Support –  Experiences Denmark, Sweden and Ireland –  Lessons learnt and technical assistance for EnMP implementaFon in China

3.   Supply Chain Ini(a(ves for Industry (forthcoming) –  Promising method of sFmulaFng energy management in industry –  Challenges and opportuniFes

Decision-‐makers Ma]er!

Financial Director “Do we have the money to invest and are we willing to spend it on

EE?” Driver: Financials

Chief Technology Officer “Do we know what energy efficiency

practices and technologies are available?”

Driver: knowledge

CEO “Are we committed to prioritize EE

above other investments?” Driver: Commitment

Marketing Director “Do the public and market demand

us taking EE measures?” Driver: Public and market

demand

Regulatory Affairs Officer “Does this government policy

require us to take EE measures?” Driver: Policy obligation

Need to make a compelling business case to the board Produc(vity gains “sell”

Source: Ecofys in Reinaud and Goldberg, 2011

Co-‐benefits -‐ a significant driver for companies

•  Co-‐benefits o_en exceed the value of energy savings •  Including co-‐benefits reduces payback Fmes for investments

Examples: •  Value of non-‐energy benefits (NEBs) equal to about 2.5 (mes the

projected energy savings for the installed measures (Hall & Roth, 2003)

•  Inclusion of quanFfied co-‐benefits in an energy-‐conservaFon supply curve for the US iron and steel industry doubled the poten(al for cost-‐effec(ve savings (Worrell et al. 2001 & 2003)

•  An iniFal cost of $5000 in consulFng fees for purchasing a three-‐fan, variable inlet valve controlled system, created a potenFal incremental

annual revenue $375 000 for Alcoa.

Policy Pathway Overview

•  What: DefiniFons

•  Why: Importance of managing energy in industry

•  Role of energy management programmes

•  How to design and deliver energy management programmes

Energy Management Programmes -‐ DefiniFons

Drivers & IncenFves

Support

Energy Management

Systems

• Target-‐sehng policy • Mandatory EnMS • Policy exempFons • Subsidies / Tax rebates • Public reporFng • External RecogniFon

• Networking • Workshops • Direct technical assistance • Tools, training

• Standard or specificaFon • EnMS incl. Energy review guidelines • CerFficaFon or verificaFon

Link to policy package

Why Energy Management?

=> Save Energy and Realise Co-‐Benefits

Why EnMS? •  Overcome a range of barriers to energy efficiency •  Measurement of baseline energy use, energy reviews, KPIs, etc. •  ConFnuous idenFficaFon of energy saving opportuniFes & implementaFon •  Involvement of top management and staff

Why EnMPs? •  Energy saving acFons in industry are relaFvely cost effecFve •  EnMPs can be linked to and support policy objecFves e.g., energy security •  Isolated adopFon of EnMS may lead to varying degrees of quality and durability,

and low up-‐take •  Overcome company barriers to the implementaFon of EnMSs, and provide

guidance and support for the implementaFon process

“EnMS +”: ImplementaFon Mechanisms

•  Energy review, benchmarking and technical tools assist in idenFfying EE opportuniFes, defining targets and key performance indicators (KPIs) within their EnMS. •  Some may be complementary requirements

•  Direct programme and/or technical assistance •  Case studies showing peer experience •  Guidance materials •  Workshops, networks and other fora for best pracFce

exchange

•  EnMS is the cornerstone of an EnMP, but other EnMP components are necessary to achieve energy savings…

Country example: Sweden

Drivers & IncenFves

Support

Energy Management

Systems

• Rebate from carbon tax •  External recogniFon (case studies)

• Manuals on energy reviews, LCC and procurement

• Networking and workshops • Direct technical assistance

•  EN 16001 (transiFon to ISO 50001) standard

•  EnMS CerFficaFon

voluntary PFE

agreement

Country example: Australia

Drivers & IncenFves

Support

Energy Management

Systems

•  EEO is mandatory •  Public and government reporFng •  External recogniFon (case studies)

•  Industry Guidelines •  Industry Support Officers •  Annual workshops

•  Assessment Framework (EnMS specificaFon)

•  Government verificaFon

Energy Efficiency

OpportuniFes

EnMS in the Supply Chain

What is the role of EnMS in supply chain ini(a(ves?

•  Successful examples of large buyers/retailers engaging their manufacturing base in energy or GHG saving acFviFes, e.g.: •  Ikea audits and capacity building with its manufacturing suppliers

(partnership with WWF Climate PosiFve OpportuniFes for Suppliers) •  Ford and SKF require suppliers to be ISO 14001 cerFfied

•  IIP Database on Supply Chain IniFaFves for Industry (April) •  ISO 50001 – an internaFonally recognised a framework for organisaFons to encourage suppliers to be]er manage energy

Key Messages and Future Pathways

•  EnMS is a tool to change behavior, processes, technologies

•  EnMS can enable significant co-‐benefits to be uncovered •  Need to speak the same language as C-‐level to encourage uptake •  Communicate benefits and costs for companies

•  Need EnMS +

•  Government policy, such as EnMPs, and enabling finance, can have a key role in promoFng EnMS

•  EnMS has a role to play in corporate Supply Chain Ini(a(ves •  What role for government agencies in promoFng SCI?

Industrial Productivity I N S T I T U T E F O R

Sharing best practices for low carbon enterprises w iipnetwork.orge [email protected]

Thank you! IIP [email protected] [email protected]

IEA [email protected] [email protected] [email protected]