Program Name or Ancillary Texteere.energy.gov Mechanisms for Industrial Energy Management Rio de Janeiro, Brazil August 10, 2011 Michaela Martin, Oak Ridge National Lab James Quinn, U.S. Dept. of Energy

2 | Industrial Energy Efficiencyeere.energy.gov What is Energy Management? Energy Management Is a framework for integrating energy into the existing management practices of an organization Can be based on a national, or international standard such as ISO Energy management systems It requires that: –Top management of an organization make a commitment to continual improvement of their energy performance –Energy performance improvements are measured and documented against a baseline

3 | Industrial Energy Efficiencyeere.energy.gov Ad hoc Approach to Energy Management… Source: UNIDO 2010

4 | Industrial Energy Efficiencyeere.energy.gov Structured Approach Senior management commit to program 03Years -20% -25% -15% -10% -5% 0 +5% Costs Investment Initial savings sustained Housekeeping first – then investment Becomes company culture Source: UNIDO 2010

5 | Industrial Energy Efficiencyeere.energy.gov Benefits of Energy Management Much of the energy efficiency in existing facilities can be achieved through changes in how energy is managed, rather than through installation of new technologies Effective energy management also provides a context for management to assess the applicability of new technologies Energy management requires an organization to comprehensively examine its energy use and consumption and to develop a framework to sustain the change systemsprocessesfacilitiesequipmentpersonnel Scope of an energy management system

6 | Industrial Energy Efficiencyeere.energy.gov Identify Champions: –Who are the key person(s) that control needed resources? –Who is respected by staff within the organization? –Who can help you achieve this as a priority? Identify key persons –Who know the processes –Who know the facilities –Who know equipment –Who know how to help team with documents, records, and other management system issues Develop a risk response –What are the most common barriers to long-term programs? –Who in the organization is likely to oppose this process? –Are there resource conflicts? –What are the competing priorities? Building the Case for Energy Management

7 | Industrial Energy Efficiencyeere.energy.gov The U.S. DOE has supported a series of domestic and international efforts to help end-users and their organizations manage energy. ISO Energy Management Standard ASME System Assessment Standards Resources for Supporting Energy Management Superior Energy Performance Program Global Superior Energy Performance (GSEP) Partnership U.S. DOE Efforts to Support Energy Management Energy Management Efforts

8 | Industrial Energy Efficiencyeere.energy.gov Requires organization to establish a baseline, metrics, energy management team, and system—enabling systematic achievement of continuous improvement in energy performance. ISO Energy Management Standard Does not prescribe specific energy performance criteria. Designed to be used independently, yet can be aligned or integrated with other management systems (e.g., ISO 9001 and ISO 14001). Applicable to all organizations that use energy, including industrial plants, buildings and other facilities, entire organizations. New ISO Standard

9 | Industrial Energy Efficiencyeere.energy.gov ISO 50001: Energy Management System Standard Potential impacts: Could influence up to 60% of the world’s energy use across many economic sectors Uptake of ISO will be driven by companies seeking an internationally recognized response to: Corporate sustainability programs Energy cost reduction initiatives Demand created along the manufacturing supply chain Future national cap and trade programs; carbon or energy taxes; increasing market value of “green manufacturing” / reduced carbon footprint International climate agreements ISO provides a framework for industrial and commercial facilities and organizations to manage their energy use. ISO Launched Developed by ISO Project Committee 242; United States and Brazil led effort with the United Kingdom and China 56 countries participated, 13 as observers Final Draft International Standard (FDIS) released March 2011 Final standard published in June 2011.

10 | Industrial Energy Efficiencyeere.energy.gov What’s Different About ISO 50001? Addresses some practical realities: Energy efficiency is not a core business of most organizations. Personnel and business priorities change over time. As a result, energy efficiency improvements may not be sustained. ISO prepares an organization to: Manage future organizational changes in an energy-efficient manner, while preserving profitability/effective operations Evaluate what works for the organization based on hard data and build on it Provide a structure and framework for communicating results both internally and externally Integrate an energy management system into existing management programs

11 | Industrial Energy Efficiencyeere.energy.gov Typical features include: 1.Energy policy: top management’s official statement of the organization’s commitment to managing energy 2.Cross-divisional management team led by a representative who reports directly to management and is responsible for overseeing implementation of the energy management system 3.Energy review to assess current and planned energy use, energy sources, and consumption and identify opportunities for improvement 4.Baseline of the organization’s energy use 5.Energy performance indicators (EnPIs) that are unique to the company and are tracked to measure progress Components of an Energy Management Standard

12 | Industrial Energy Efficiencyeere.energy.gov 6.Energy objectives and targets for energy performance improvement at relevant functions, levels, processes, or facilities within an organization 7.Action plans to meet those targets and objectives 8.Operating controls and procedures for significant energy uses 9.Measurement, management, and documentation for continuous improvement for energy efficiency 10.Internal audit of progress to management based on these measurements Components of an Energy Management Standard

13 | Industrial Energy Efficiencyeere.energy.gov ISO Energy Management (EnMS) ISO FDIS 50001

14 | Industrial Energy Efficiencyeere.energy.gov 14 Applying ISO Applies to all factors that can be monitored and influenced by the organization to affect energy use Designed to be used independently, yet can be aligned or integrated with other management systems (e.g., ISO 9001 and ISO 14001). Applicable to all organizations that use energy Can be implemented at the corporate or facility level Does not prescribe specific performance criteria or results with respect to energy Needs enabling policies and programs to realize its global potential Superior Energy Performance is such an enabling program

15 | Industrial Energy Efficiencyeere.energy.gov What is Superior Energy Performance? A market-based, ANSI/ANAB-accredited certification program that provides industrial and commercial facilities with a roadmap for achieving continual improvement in energy efficiency while boosting competitiveness. Goals: Drive continual improvement in energy performance Develop a transparent system to validate energy performance improvements and management practices Encourage broad participation throughout industry Support and build the energy efficiency market and workforce Superior Energy Performance for industry will be launched in the U.S. in 2012.

16 | Industrial Energy Efficiencyeere.energy.gov Foster a corporate culture of continuous improvement in energy efficiency Use ISO standard as foundational tool for energy management Establish a tiered program that provides an entry point for companies at all levels of experience with energy management Create a verified record of energy performance improvement. Potentially create value for corporate energy savings and carbon reductions in utility, state, regional, national, and international trading markets Superior Energy Performance Strategy

17 | Industrial Energy Efficiencyeere.energy.gov Certification Requirements: An ANSI/ANAB-accredited Verification Body will conduct a third-party audit to verify that the following requirements are met: 1.Energy Management System Conformance to ISO Energy Management Standard 2.Energy Performance Improvement 17 ISO Components in place: Baseline Policy Plan Team/Leader Superior Energy Performance Single facility ISO conformance with validated energy performance improvement ISO ISO is a foundational tool that any organization can use to manage energy. Getting Superior Energy Performance Certified

18 | Industrial Energy Efficiencyeere.energy.gov Superior Energy Performance Program Design The two-tiered approach accommodates: Maturity of facility’s energy management program Level of external validation desired Business climate/cycle Two Program Tiers Partner Self Declaration Criteria  Conformance to ISO  Measure and audit energy performance improvement Performance Levels  Energy performance improvement required Method of Verifying Results  Self Declaration Certified Partner ANSI/ANAB-accredited certification Criteria  Conformance to ISO  Measure, verify, and certify energy performance improvement Performance Levels  Energy performance improvement required, minimum requirements set by program  Two Pathways Available: Energy Performance or Mature Energy Method of Verifying Results  ANSI/ANAB-accredited certification with on-site visit

19 | Industrial Energy Efficiencyeere.energy.gov SEP Performance Criteria for Certification Levels 19 Performance Characteristics SilverGoldPlatinum Energy Performance Pathway Energy Performance Improvement Meets 5% improvement threshold over the last 3 years. Meets 10% improvement threshold over the last 3 years. Meets 15% improvement threshold over the last 3 years. Mature Energy Pathway Energy Performance Improvement Demonstrates an improvement of 15% or more over the last 10 years. Score on Best Practice Scorecard Includes credits for energy management best practices and energy performance improvements beyond 15% over the last 10 years.  Scores at least 35 and up to 60 out of 100 total points for Best Practice Scorecard  Minimum of 25 points required for the energy management best practices.  Scores at least 61 and up to 80 out of 100 total points for Best Practice Scorecard  Minimum of 25 points required for the energy management best practices and 10 for energy performance.  Scores at least 81 out of 100 total points for Best Practice Scorecard  Minimum of 25 points required for the energy management best practices and 10 for energy performance.

20 | Industrial Energy Efficiencyeere.energy.gov Getting Superior Energy Performance Certified Certified Practitioners Certified Practitioner in Energy Management Systems Certified Practitioner in Energy Management Systems Certified Practitioners in [Type] System Certified Practitioners in [Type] System SEP Lead Auditors SEP Performance Verifiers SEP Lead Auditors SEP Performance Verifiers Standards & Protocols: ISO Energy Management Standard ISO Energy Management Standard System Assessment Standards System Assessment Standards Measurement & Verification Protocol Measurement & Verification Protocol Resources to Help Facilities Prepare for Certification

21 | Industrial Energy Efficiencyeere.energy.gov System Assessment Standards Standards cover: Organizing an assessment Conducting an assessment Analyzing the data collected and developing efficiency recommendations Reporting and documentation Purchase standards and guidance documents from ASME for $35 (print or digital): Available Standards: Pumping Compressed Air Steam Process Heating Assessment standards for specific energy systems provide immediate opportunities for energy performance improvement in many facilities. Use of the standards is not required for certification but will help plants define a pathway for achieving energy savings.

22 | Industrial Energy Efficiencyeere.energy.gov Roles within Superior Energy Performance Industry Drives strategy through U.S. Council for Energy Efficient Manufacturing Pilots elements of Superior Energy Performance prior to program launch Adopts the Superior Energy Performance program by getting plants certified to ANSI/ANAB-accredited Superior Energy Performance program Government Facilitates industry collaboration to develop Superior Energy Performance program: fund program development activities (e.g., standards development, pilot projects) Cost shares Superior Energy Performance program start-up Leverages Superior Energy Performance program to deploy federal energy programs (e.g., Save Energy Now LEADER)

23 | Industrial Energy Efficiencyeere.energy.gov U.S. Council for Energy-Efficient Manufacturing Acts as champion of U.S. industry in pursuing national energy efficiency goals. Seeks to improve the energy intensity of U.S. manufacturing through a series of initiatives. Guides development of Superior Energy Performance.

24 | Industrial Energy Efficiencyeere.energy.gov Recognition ‒ Publicly recognized as leader in sustainable use of energy resources (local and financial community) ‒ Customers may grant preferred supplier status External financial incentives ‒ Energy efficiency credits (electric utility & others) ‒ Potential carbon credits (state, region, and national) Systematic framework for continuous improvement ‒ Consistent with ISO energy management and ASME system assessment standards ‒ Provides tools and resources to assist implementation and validation of sustained energy performance improvement Industry and Construction stock CD 01030FRL Creatas Power & Energy CD Benefits to Companies

25 | Industrial Energy Efficiencyeere.energy.gov Utilities ‒ Empowers a facility-wide, systems-oriented approach ‒ Helps justify industrial and commercial energy efficiency program investments, including permanent operational changes, to public utility commissions ESCOs ‒ Builds greater credibility with industrial and commercial customers and a stronger business case for providing third-party energy efficiency services and off-balance sheet capital investments Supply Chains ‒ Provides a proactive turn-key program for major OEMs and retailers to request their suppliers to meet the program requirements Market Benefits Benefits in the Industrial and Commercial Energy Efficiency Market

26 | Industrial Energy Efficiencyeere.energy.gov Energy Management Demonstration Projects Kick-Off Dates 2009: Northwest region 2010: Southeast, Midwest, and Mid-Atlantic regions 2011: California, Colorado, and Texas (second round) and Northwest region Energy Management Demonstration Goals: Provide Save Energy Now LEADER Companies with a roadmap to achieve ambitious goals to reduce industrial energy intensity. Test the elements of Superior Energy Performance. Build energy management expertise at the regional, state, and plant level by showcasing lessons learned and best practices. Broaden energy savings throughout the nation. DOE’s Industrial Technologies Program is conducting State/Regional Energy Management Demonstration Projects. ITP has funded 23 state awards starting in 2009 to help industry save energy.

27 | Industrial Energy Efficiencyeere.energy.gov Demonstrations 1.The state or region identifies an appropriate demonstration plant based on provided guidelines 2.Facility and consultants receive three face-to-face training sessions 3.Consultants receive monthly training (15-month implementation schedule) 4.Consultants coach facility to implement energy management system in conformance with ISO Facility and consultants hold quarterly review with facility management and Energy Management Demo team lead 6.Facility applies for Superior Energy Performance as early as 18 months after initial training. Demonstration Approach 3M Alcoa Allsteel Amcor PET Bridgestone Tire Cook Composites & Polymers Cooper Tire Didion Milling, Inc Dow Chemical Eaton General Dynamics Gray Harbor Paper Haynes International JR Simplot Kenworth Trucks Neenah Foundry Company Nissan Schneider Electric Spirax Sarco Traco Volvo World Kitchen 3M Alcoa Allsteel Amcor PET Bridgestone Tire Cook Composites & Polymers Cooper Tire Didion Milling, Inc Dow Chemical Eaton General Dynamics Gray Harbor Paper Haynes International JR Simplot Kenworth Trucks Neenah Foundry Company Nissan Schneider Electric Spirax Sarco Traco Volvo World Kitchen P A R T I C I P A N T S

28 | Industrial Energy Efficiencyeere.energy.gov DOE worked with the University of Texas at Austin to pilot Superior Energy Performance in Texas facilities: Field tested elements of Superior Energy Performance Conducted audits using ANSI MSE and M&V Protocol Established the first ANSI/ANAB- accredited Verification Body for Superior Energy Performance Certified the first plants to Superior Energy Performance First facilities certified to Superior Energy Performance Performance Level Cook Composites and Polymers Co. Houston, TX Gold Freescale Semiconductor, Inc. West Austin, TX Silver Owens Corning Waxahachie, TX Silver Union Carbide, subsidiary of the Dow Chemical Co. Texas City, TX (manufacturing facility) Platinum Union Carbide, subsidiary of the Dow Chemical Co. Texas City, TX (energy systems facility) Silver Texas Pilot Project,

29 | Industrial Energy Efficiencyeere.energy.gov Superior Energy Performance provides… A facility-wide strategic approach to continual energy performance improvement. Market-recognized validation of effective energy management. Third-party transparency validates energy performance improvement. SEP M&V Protocol –Offers a standardized methodology for validating energy performance improvements. –Supports project-level M&V. Supports a more flexible approach by public utility commissions in validating expenditure of rate payer funds. SEP builds energy management expertise in the workforce. Certified Practitioner credentialing offers an opportunity for states and utility representatives to increase energy management expertise. Prepares states and utilities to respond to growing interest in energy management. Value of Superior Energy Performance

30 | Industrial Energy Efficiencyeere.energy.gov Framework for implementing a comprehensive energy management system Step-by-step implementation guidance with tools Web-based and self-paced Energy Management System Toolkit The Self-Paced Module is located at:

31 | Industrial Energy Efficiencyeere.energy.gov Energy Management System Toolkit Identifies savings opportunities and tracks implementation Tools include: –Quick PEP –Self-Paced Module –Project Savings Tracker Module –Carbon Footprint Calculator Basic and advanced levels: −Steam −Process Heating −Pumps −Fans −Compressed Air −Motors DOE will work with utilities and other partners to deliver energy management training to end-users. Four-Part Energy Management Webinar Training series Helps facilities implement ISO and Superior Energy Performance requirements. Supports ITP Energy Management Tool Suite. Available in October ITP Energy Management Tool Suite

32 | Industrial Energy Efficiencyeere.energy.gov Global Superior Energy Performance (GSEP) GSEP is conceived as an international network of national government agencies, national-level certification programs, and other public/private sector organizations that will catalyze continuous energy performance improvements in commercial buildings and industrial facilities of all performance levels. The GSEP partnership includes Canada, the European Commission, France, India, Japan, Korea, Mexico, Russia, South Africa, Sweden, and the United States. GSEP was announced in July 2010 at the Clean Energy Ministerial, which convened 25 energy ministers from 20 countries and the European Commission. Clean Energy Ministerial provided a forum for like-minded countries to take specific steps forward to promote clean energy technologies. See

33 | Industrial Energy Efficiencyeere.energy.gov CERTIFICATION WORKING GROUP (Lead: U.S.) POWER WORKING GROUP (Lead: Japan (P)) STEEL WORKING GROUP (Lead: Japan) GSEP COOL ROOFS WORKING GROUP (Lead: U.S.) CHP WORKING GROUP (Lead: Finland) CEMENT WORKING GROUP (Lead: Japan) GSEP objective is to reduce global energy use by: Encouraging industrial facilities and commercial buildings to pursue continuous improvements in energy efficiency Promoting public ‐ private partnership GSEP Objective and Organizational Structure

34 | Industrial Energy Efficiencyeere.energy.gov GSEP Partner Countries

35 | Industrial Energy Efficiencyeere.energy.gov The Certification Working Group is developing a network of coordinated, national ‐ level certification programs to encourage public, educational, and industrial facilities and commercial buildings to pursue continuous improvements in energy efficiency. The GSEP certification process will recognize facilities that meet three main criteria: (1) adoption of an energy management system that conforms with the forthcoming ISO standard, (2) achievement of a designated minimum rate of energy performance improvement and (3) receipt of third ‐ party validation of energy performance improvement and conformance to ISO Industrial GSEP Pilot Participants: 3M, Nissan, Dow Chemical Commercial GSEP Pilot Participants: Cleveland Clinic, Grubb & Ellis Company, Marriott, Target Corp., Walmart Certification Working Group

36 | Industrial Energy Efficiencyeere.energy.gov Draft GSEP Certification Strategic Objectives, June Energy Management. Increase the implementation of energy management in the industrial and buildings sectors to improve energy efficiency and energy performance on an ongoing basis. 2.Measurement and Verification. Measure and verify energy performance improvements on a consistent basis. 3.Qualified Workforce. Build a qualified workforce of professionals with expertise in the fields of energy management, energy efficiency, and measurement and verification. Shared Strategic Objectives Defined During GSEP Meeting, 6/20/2011

37 | Industrial Energy Efficiencyeere.energy.gov Thank you James Quinn U.S. Dept. of Energy Michaela Martin Oak Ridge National Laboratory