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Industry Energy-Efficiency Programs Cut Costs, Improve Productivity

Energy-efficiency programs are helping industry achieve higher energy savings, cost savings and productivity improvements, according to a new report by the SEE Action Network and the Institute for Industrial Productivity (IIP).

The report, Industrial Energy Efficiency: Designing Effective State Programs for the Industrial Sector, investigates successful and well-designed industrial energy efficiency (IEE) programs in the United States. The results provide a strong case for industry participation in statewide programs.

IIP says it is clear from the research that state energy-efficiency programs are helping both industry and ratepayers save money and cut energy use.

“Our research shows that industrial energy-efficiency programs offer participants extensive savings by reducing energy bills. But the benefits are wider than that,” said Amelie Goldberg, North America program manager at IIP and primary author of the report. “There’s no question that industry’s participation in energy-saving efforts is also helping eliminate or delay the need to build more expensive power generation, transmission and distribution capacity.

“In turn, this means the programs are facilitating efforts to cut the harmful greenhouse gas emissions that cause climate change. It’s a win-win situation for all,” Goldberg added.

IIP says looking ahead, everyone’s rates can be kept down by ensuring the majority of energy customers have access to energy efficiency services, such as those offered through IEE programs.

IEE programs work by providing information, technical assistance and incentives to industrial facilities to support energy efficiency equipment upgrades and improved maintenance practices, and to promote energy management to ensure continuous improvements. The programs, if designed and implemented well, can be more cost-effective than efficiency programs in the commercial and residential sectors, helping to ensure that states and regulatory utility commissions encourage delivery of energy services as cost-effectively as possible.

The report found that the keys to success are making a sizeable commitment over a number of years, and ensuring there are strong strategic energy-management programs in place in firms. The energy savings achieved warrant the effort — they go well beyond those made by individual firms as part of their own energy-efficiency initiative.

For example, the NORPAC paper mill in Washington State participated in a program offered by the Bonneville Power Administration in conjunction with the Cowlitz County Public Utility District. The company invested $35 million, and an additional $25 million was offered in program incentives for equipment to improve the refining process. NORPAC now saves 100 million kWh of electricity per year, equivalent to cutting its power requirements by about 12 percent.

Last year, Ceres and its Investor Network on Climate Risk (INCR) released a report that said energy efficiency could be a multi-hundred-billion dollar investment opportunity in the United States, but better policies are required to unlock broad-based financing from institutional investors. Around the same time, Deloitte published a separate report that said that improving energy efficiency at America's businesses is as important to brand-building as it is to growing the bottom line.


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