Presentation on theme: "1 “Cost-Effective Implementation of Sustainable Manufacturing Technologies” David Love Director, Industrial Solutions Johnson Controls, Inc. Building Efficiency."— Presentation transcript:
1 “Cost-Effective Implementation of Sustainable Manufacturing Technologies” David Love Director, Industrial Solutions Johnson Controls, Inc. Building Efficiency Group Milwaukee, WI September 27, 2007
2 Presentation Outline What is Sustainability? Industry Drivers Challenges U.S. Manufacturers face to transition to sustainable technologies Impact U.S. Manufactures can realize when transitioning to more sustainable technologies Available Technologies Today Break-out Session Topics
3 Defining Sustainability External Numerous definitions depending on stakeholder’s agenda Johnson Controls Definition: “Through our actions and offerings, we embrace Environmental, Social and Economic practices that benefit our customers, employees, shareholders, and society as a whole” Core Values Ethics Policy ESH Policies Committed management Performance metrics Market position Internal Environmental Stewardship Social Responsibility An Integrated, Balanced Strategic Approach “Triple Bottom-line” Economic Prosperity
5 Regulation Workplace Safety Homeland Security Cost of Government Regulations Sustainability (GHG, ODS, VOC) Labor Increasing indirect expenses Aging Workforce Lower off shore production cost Available skilled workers Core Business Outsourcing Affordable technology Deterioration of plant infrastructure Productivity Demands Economics Volatile Energy Costs Continuous cost reduction pressure Shareholder Expectations Limited Capital Tight ROI Global competition Challenges for Manufacturers Industrial sector economics are being pressured for increased productivity; labor, quality, asset availability and energy efficiency are key inputs to the productivity equation.
6 Outlook for primary fuel consumption... 10 12 14 16 18 20 Btoe 0 2 4 6 8 18601880190019801940202019202000196020402060 Developing countries Central and Eastern Europe Industrialized Countries 82% of people 18% of people Source: World Energy Council, World Bank Period 2000 – 2060 shows future energy consumption based on current trends Proven oil reserves of 1 Trillion barrels Current global usage is 73 Million barrels consumed daily Oil consumption increasing globally –4.4% per year in China –3.7% per year in India –2.0% per year in N.A. and Europe Global Market Drivers
7 Industrial Market Drivers Source: Energy Information Administration: Annual Energy Review 2005 Waste seems to be the major growth industry Annual U.S. energy waste = $300 billion (after saving $365b/y since ’75) – Amory Lovins, RMI
8 Automotive Experience Where are the opportunities?
9 Commissioned by Johnson Controls Inc. The Need for a Sustainable Vehicle Rating System - Michael D. Arny, President Leonardo Academy -May 4, 2005 Total Energy Life Cycle of Vehicle 878,132 MJ 119,755MJ 1,482MJ 39,321MJ 105,207MJ ManufactureFuelFuel Extraction, Processing & DistributionParts & LaborELV Disposal* Resource Extraction, Processing and Transportation Manufacturing Vehicle Use and Operation End of Life Vehicle and Disposal Parts & Labor Total Energy = 1,143,897 MJ
12 340 Worst Performers Best Performers Number of Buildings 166 121 86 30 Energy Intensity (kBtu/ft 2 -year) 100 1 Challenge: Data & Benchmarking
13 Challenge: Finding Value Maturity Value Chain Regulatory Compliance: Address “end of pipe” issues Safety, permitting, auditing, pollution prevention Etc. Reduce Costs: Waste management Energy management Production efficiencies Competitive Advantage: GHG tracking tools Sustainability training Green supplier monitoring Green buildings/plants Design products for Sustainability Renewable energy Must Do Grow Business
14 Is there a Challenge at the top? On-line survey conducted in March 2007 228 manufacturing executives and managers responsible for energy management decisions Major findings: –77% believe energy prices will rise significantly next year (average increase expected is 15.4%) –66% expect to make energy efficiency investments over the next year (9% of capital budget will be used) –75% will also fund energy efficiency improvements through operating budgets –69% are paying more attention to energy efficiency than they were one year ago.
20 Automotive Experience Three Global Businesses Automotive Experience ($18.3 billion) Seating and interiors Components and system integration Electronics Power Solutions ($3.7 billion) Lead acid (80 million per year) Hybrid battery development (NiMH, Lith-Ion) Battery management and electronics Building Efficiency ($12.2 billion) Control Systems and HVAC equipment (York) Life-cycle services (1200 locations in 125 countries) Energy efficiency and Sustainable Solutions
21 Automotive Experience Sustainability: Impact Automotive Experience Bio-polymers: insulation/acoustics (Eco-Cor) Recycled materials: structural, door panels Green Supply Chain: ISO 14001 Power Solutions Recycled battery components (98% content) Hybrid battery development (NiMH, Lith-Ion*) Lighting Retrofits Building Efficiency LEED Certified Corporate Office (35% savings) Green Cleaning Chemicals Energy Efficiency Billion Dollar Round Table: Diverse Spending EPA Energy Star Partner of the Year Supplier Partnership for the Environment Global Environmental Management Initiative Business Roundtable: Climate Resolve
22 Energy Usage Trend From FY 2006 United States Mexico South America Europe Asia & Rest of World However, JCI’s Global Energy Consumption per Revenue $ Continues to Decline JCI’s Energy Use is projected to increase globally, but varies by region. 40% reduction in electricity metric 38% reduction in natural gas metric GRI Report
23 Energy Savings - FY07 (through April) Savings realized through April AE $795,540 BE $301,117 PS$1,495,994 $2,592,651 Projected Savings for FY07AE$1,669,004 BE $742,911 PS$1,869,372 $4,281,287 On track to save > $4M in energy costs across divisions FY 07, annualized impact is $5.1M.
24 Top Energy Saving Strategies / Projects Lighting Upgrades Projects Identified Waiting Approval / Installation Business UnitCapital ReqAnn Savings Tons CO2 AE$4,371,316$2,231,95812,759 BE$1,053,325$658,734 1,898 PS$1,350,645$710,469 1,211 $6,775,286 $3,601,16115,868 Approx. 1.8 year payback Move all plants to the best utility rate / tax Ensure all plants are on the best / right rates - $100k Reduce utility taxes - $100k
25 Case Study Steps to Building a Sustainability Plan Seating Plant
26 The Opportunity: Seating Plant Before Installation Activity Plant Shutdown After Rockwood Data Logger Before and After Data Track
27 Cost / Benefit Impact: Sustainable Returns Actual Payback: 1.3 years
28 Case Study Steps to Building a Sustainability Plan New Fab Plant
29 The Opportunity: New Fab Plant Very tight temperature and humidity requirements... –70F+/-2 (21C+/-1) and 45% RH +/- 3% Combined with a large amount of exhaust and subsequent make up air... –650,000 cfm (307 m3/sec) = 41 Macy’s Snoopy balloons a minute Combined with the need to recirculate a large volume of air through the filters for cleanliness... –4,400,000 cfm (2077 m3/sec) = 22 Goodyear blimps a minute Combined with hundreds of process tools with vacuum pumps, RF generators, and support equipment... Combined with extensive use of deionized (DI) water to rinse the wafers during processing... Could lead to annual power consumption of 170,000 mWh (10,000+ homes worth) and water consumption of 3 million gallons/day (6,000 homes worth) Annual utility bills could total $20M - $25M
30 Cost / Benefit Impact: Sustainable Returns Invested <1% of the project cost (<$1.5M) in LEED related items – predominately efficiency improvements that we would consider regardless of LEED But remember that the overall project cost 30% LESS than previous $300M fab plant construction cost The first full year should recover $1M in operating savings At full build out will save >$4.0M per year in operating costs` –20% energy reduction –35% water use reduction –50% emissions reductio
31 Building a Sustainable Plan Steps to Building a Sustainability Plan
32 Energy Efficiency Leads to Sustainability Utilization 1-10% Efficiency 5-25% Rate 0-5%
33 Utility Bill Audit Commodity Supply Services GHG Measurement & Verification Rate/Tariff Audits Facility Audits Operational Improvements Energy Efficiency Services Ongoing GHG Measurement & Verification Bill Payment Loss Recovery Loss Prevention & Education Optimization Our Process Energy Efficiency Process
35 Sustainable Energy Information System “Continuous Improvement”
36 Building Tune-up Lighting Systems Load Reductions Fans and Pumps HVAC/R Systems Combined efficiency and operational improvements deliver twice the savings as equipment efficiency improvements alone Source: Energy Star Operational Improvements
38 Solar Solar energy can be converted directly (photovoltaic) or indirectly (thermal solar) into electricity and heat through photovoltaic devices and thermal collectors. The resulting electricity or heat can offset utility costs and reduce, or possibly eliminate, the need for water heaters. Wind In a typical wind turbine, wind energy is converted to rotational motion by a rotor, which turns a shaft that passes into a gearbox, which increases the rotational speed. This transmission is attached to a high- speed output shaft, which is connected to an electrical generator. Biomass Biomass byproducts are burned or raised to very high temperatures to release the chemical energy as heat. The heat is used to boil water in biomass boilers, creating steam. The steam is then used to turn turbines and generators to produce electricity. Digester Gas to Energy The most popular technology converts wastewater treatment gas to electricity, employing internal–combustion engines that run a generator to produces the electricity. This electricity is used to power internal operations and the excess is sold back to the grid. Heat generated by the engines can be recovered and used to heat digesters and plant facilities. Landfill Gas to Energy Hundreds of municipalities across the country have landfills which often produce methane in commercial quantities. By capturing the methane and using it to power electrical generation, or cleaning it and sending it to a pipeline, energy is saved and waste reduced. Renewable Technologies
39 Introduction to Sustainability Energy and You Illuminate Your Life Getting to Know H2O Watching Your Waste-Line The Great Indoors A Change of Climate Reinventing the Wheels Greening the Supply Chain Sustaining the Momentum Delivered Electronically or in Groups SEEC – Internal Education Modules
40 The Leonardo Academy Report Calculations from total lifetime energy savings from projects implemented by JCI 1990 - 2000 Savings –$16.7 billion in total energy savings –270,000 gigawatt-hours in electricity savings –3,425 megawatts in electric demand reduction –1.5 billion MMBtu reduction in direct fuel use Emissions –352 million tons of carbon dioxide –1.4 million tons of nitric oxide –1.9 million tons of sulfur dioxide –34,000 tons of particulate (PM 10) –19,000 pounds of mercury –1,800 pounds of cadmium –33,300 pounds of lead emissions External Impact
41 Case Study Steps to Building a Sustainability Plan External
42 USC Biomass Boiler Johnson Controls developed an on- campus biomass co-generation facility to largely replace the purchase of natural gas and calculates that the plant will cover its construction and installation costs through the energy savings it will provide. The innovative approach was just one of 18 projects recommended as part of an audit of energy- and water-saving opportunities on campus. A digester gas cogeneration plant at Baltimore’s Back River Wastewater Treatment Plant will reduce emissions, save taxpayer dollars, address workforce development, and support the local economy. The combined heat and power plant uses the remainders of treated wastewater as fuel. It will generate more than 2.4 megawatts of electricity. Erie Wind TurbineBack River Treatment A wind turbine installed at the site of a grade school, middle school and high school in Erie, IL will generate the majority of electricity needed to power the facilities, and will sell excess power back to the grid. The contract for the turbine included energy saving upgrades at the schools to improve the benefit of renewable energy. Renewable Case Studies
43 Sources for Guidance National Association of Manufactures –Energy Efficiency, Water and Waste-Reduction Guidebook for Manufactures DOE- Industrial Technology Program –Save Energy Now U.S. Green Building Council U.S. EPA Energy Star Alliance To Save Energy Global Environmental Management Institute
45 Break-out Session Topics Straw-man survey What are the primary technology-related barriers industry faces in implementing and profiting from sustainable manufacturing practices? What types of financial considerations must be made before a company makes a sustainable technology related investment? What are ways in which public and private sectors can work together to overcome technology related barriers to sustainable manufacturing?
49 What is LEED? Leadership in Energy and Environmental Design The LEED Green Building Rating System™ is a voluntary, consensus-based national standard for developing high-performance, sustainable buildings. There are 5 broad categories that force an emphasis on a holistic approach to design: –Sustainable Sites –Water Efficiency –Energy & Atmosphere –Materials & Resources –Indoor Environmental Quality
50 Sustainability Metrics—(GRI) ECONOMICECONOMIC Direct Economic Impacts Customers Suppliers Employees Providers of capital Public sector Governance ENVIRONMENTALENVIRONMENTAL Environment Materials Energy Water Biodiversity Emissions Effluents Waste Suppliers Products and services Compliance Transport Overall SOCIALSOCIAL Labor PracticesEmployment Labor/management relations Health and safety Training and education Diversity and opportunity Human Rights Strategy and management Non-discrimination Freedom of association Child labor Forced labor Disciplinary practices Security practices Indigenous rights Society Community Bribery Political contributions Competition and pricing Product Responsibility Product safety Advertising Respect for privacy
51 Buildings Buildings consume: –12% of the potable water –40% of the raw materials –39% of all primary energy used in the US –70% of all U.S. electricity Source: 2006 DOE Buildings Energy Data Book and USGBC And buildings are responsible for 48% of all U.S. carbon emissions Industrial Energy Consumption: 82.6% Process 17.4% Non-Process