Published on October 6th, 2015 | by Silvio Marcacci2
Energy Efficiency Saves US Manufacturers $2.4 Billion
October 6th, 2015 by Silvio Marcacci
Energy efficiency has saved large manufacturers in the United States an estimated $2.4 billion in energy costs over the past five years, and could generate over $11 billion in annual energy savings by 2020.
These eye-popping stats come from the US Department of Energy’s Better Plants Program, a multi-sector initiative to improve the energy efficiency of America’s commercial, residential, and industrial buildings.
While the results to date are impressive, they come from facilities representing just 11.4% of America’s total manufacturing energy footprint, meaning US manufacturers may have just scratched the surface of their energy management potential.
Billions in Energy Savings, Millions of Metric Tonnes Avoided CO2
Better Plants is part of the Obama Administration’s broader Better Buildings Challenge, which targets improving energy efficiency in US commercial and industrial buildings at least 20% over the next 10 years.
Manufacturers set a specific goal under the program, typically aiming to reduce energy intensity across all US operations by 25% over a 10-year period with assistance from DOE, and may also commit to sharing their energy performance data and efficiency solutions to help other companies improve efficiency.
157 companies have partnered with Better Plants, bringing approximately 2,400 manufacturing facilities and 11.4% of America’s manufacturing energy footprint into the program – roughly equal to the entire energy footprint of Tennessee.
Manufacturing is among the most energy-intensive aspects of our economy, but also one of the ripest low-hanging fruit, as energy costs are among the largest and most variable factor companies have to consider – Manufacturers spend almost $230 billion on energy every year, while the sector represents almost 25% of total domestic energy use.
“When companies save energy, they also save money and reduce harmful carbon pollution,” said Secretary of Energy Ernest Moniz. “This is especially true in the manufacturing sector, where energy costs are often a significant contributor to total operating costs.”
So far, the program is paying off. Partners have saved roughly 457 trillion BTUs, $2.4 billion in cumulative costs, and avoided 26.6 million metric tons of harmful emissions – equal to the annual energy use of 3.7 million US homes or taking 5.6 million passenger vehicles off the road for a year.
Energy Efficiency Works Across Industry, Location, Company Size
These initial program results are significant, but the bigger significance of Better Plants may be partner diversity – companies in all 50 US states and nearly every manufacturing sector from chemicals and primary metals to paper are already participating, meaning their successes can be emulated by countless other manufacturers.
Partner facilities are spread across several states, but they’re not concentrated in America’s most energy efficient states. While traditional energy efficiency state leaders California and Illinois have over 100 facilities, energy efficiency state laggards like Georgia, Indiana, and Texas also check in with over 100 facilities – crossing the conservative divide.
Better Plants partners also cross the company size spectrum. 3 of America’s 10 largest corporations by gross revenue (Ford Motor Company, General Electric, and General Motors are involved, but so are over 30 companies who spend between $1-$10 million annually on energy and nearly 20 companies who spend less than $1 million per year on energy.
This is where the significance of the 29 Better Plants members who have committed to sharing energy performance data and sharing best practices come into play. As we’ve seen in cities who mandate energy benchmarking, real-world data and experiences demonstrate what works best and help overcome barriers to energy efficiency, expanding potential savings and participants – evidenced by the 21 new partners who joined over the past year.
If the existing partners maintain an average energy intensity improvement rate of 2.5% per year, consistent with the program’s target and just below the partnership’s average annual improvement rate of 2.1% (above the business-as-usual rates for US industry as a whole), Better Plants estimates cumulative savings of $11 billion by 2020. For context, consider how California’s statewide energy efficiency efforts have saved consumers $90 billion in utility costs in 40 years.
Big Economic and Environmental Potential
So far, 25 Better Plants partners have met their energy savings goals through the challenge, with 9 reaching the mark this year alone. Beyond adding new members, Better Plants is also adding new focus areas. The effort expanded into pilot programs to improve supply chain efficiency and water efficiency in 2014, and plans on rolling out combined heat and power and cooling/refrigeration programs by 2016.
Add it all up, and more energy-efficient manufacturing is a win for the environment and a win for the economy. If our biggest carbon emitters reduce the amount of power they consume, we slow climate change while reducing the overall cost of economic activity.
US energy use per $1 has been cut in half over the past 35 years – imagine how much lower this metric could fall if the American manufacturing sector reaches the Better Plants initiative’s goals?