By Jigar V. Shah. Article first published in Greenbiz on January 26, 2016.
Manufacturing is a critical and influential part of the US economy; it supports one in six private sector jobs and accounts for 65 percent of exports. And it is rapidly undergoing a renaissance due to shifting global cost structures. Now is the time for manufacturers to get the jump on their competitors through increased energy productivity.
The US government is already behind such initiatives with the Clean Power Plan now in play and promises to keep the country’s greenhouse gas emissions in check.
Industrial energy productivity is the inverse of energy intensity and is defined as production per unit of energy consumed.
In most countries, the industrial sector is the largest energy-consuming sector. In the US, it accounts for 31 percent of primary energy use; in China, 75 percent; and in India, 68 percent.
Energy productivity is highest in Europe and OECD Asia, where it stands around 35 percent above the world average. Energy productivity in North America is close to the world level, much lower than in Europe and OECD Asia. The table below presents data from the ABB's Global and Sectoral Energy efficiency trends for different sectors, showing how the US fares in comparision to other countries or regions.
Improving energy productivity
There are fundamental process and structural reasons for the wide differences in energy productivity across the world. For instance, the countries or regions with the largest share of electric steel (Europe, US, South Korea, Taiwan, Turkey) have the highest energy productivity.
However, the energy productivity of China’s chemical industry is low since the feedstock used is coal and not gas. Inefficient vertical shaft kilns are used in almost half of all cement production in China, lowering the sector’s energy productivity, while the US paper industry suffers due to the technical age of production facilities.
Structural factors aside, industry can make significant gains in energy productivity. The recent article, The Four Pillars of Industrial Energy Efficiency suggests these four elements should sit front and center of companies’ energy strategies:
- Making continual operational improvements
- Ensuring effective maintenance of equipment to reduce energy wastage
- Making engineered improvements, such as new additions, modifications and upgrades, to improve energy efficiency
- Implementing energy efficient new technologies.
Of course, for these four energy productivity enablers to work, the right culture must be created within an enterprise — especially where it relates to behavior, skills, teamwork, measurement and tracking, and (especially) commitment to energy efficiency through the entire management chain.
Implementing an energy management system
Energy management systems (EnMS) provide a means for systemically analyzing, managing and reducing energy use.
They have increasingly gained attention among industry leaders who recognize their strategic potential as a means to cost-effectively save energy, reduce greenhouse gas emissions and enhance energy security.
The US has its own tailored EnMS program called Superior Energy Performance (SEP). It is an accredited, plant-level, federal program that uses the internationally-recognized ISO 50001 Energy Management Standard as a foundation.
According to the US Department of Energy, facilities certified by SEP become leaders in energy management and productivity improvement. They have met the ISO 50001 standard and have improved their energy performance (defined as energy intensity) by up to 25 percent over three years, or up to 40 percent over 10 years.
To boost broader energy productivity in the US, we will need to accelerate the adoption of SEP through state energy efficiency programs, following examples already set by some states, as documented in this Action report on the design of energy efficiency programs.
The role of best practices in technology and innovation
Technology improvements and innovations in industry are remarkably slow because of the sluggish turnover of capital stock, capital-intensive investments, fluctuations in raw material availability and market demands, inadequate ROIs, and because many current processes are at their physical or chemical limits. Many of the most widely-used manufacturing processes, at a basic level, are more than one hundred years old. This list of commonly-used (energy-intensive) processes shows just how old:
Though the pace of innovation is slow, there is still substantial potential for improvement of energy productivity, based on the application of best practices. Here’s what IEA’s Tracking Clean Energy Progress says about the potential improvement of the different industrial sectors:
Key elements for creating an industrial energy productivity roadmap
Best practice technologies can take us a long way towards productive and competitive industry. Depending upon the sector, the potential for improvement in energy productivity is 10 to 30 percent, with EnMS providing the required platform to identify opportunities and enable continuous improvements. There are many promising emerging technologies but many of them will not be fully realized in the next five to ten years. Areas of future focus for a long-term industry roadmap will be on productivity and decarbonization with attention to the following areas highlighted in the UK industrial decarbonization and energy efficiency roadmaps to 2050:
- Carbon capture and storage, and utilization
- Electrification using affordable low carbon source
- Decarbonization of grid
- Biomass for fuel and feedstock
- Energy management systems
- Clustering of industries
- Circular economy
We’ve got a swathe of tools in our collective toolboxes to cut energy use and improve productivity. In the manufacturing sector, perhaps more than any other sector, the search for cost-effective ways to increase energy productivity aligns with the individual interests of private industry and the nation’s interests in economic development and a cleaner environment.