1. Realizing the Potential of Industrial Energy Efficiency- Superior Energy Performance and ISO 50001- Energy Management June 18, 2009 CEI Workshop Aimee McKane Lawrence Berkeley National Laboratory

2. 2 What are Industry’s Priorities? Current 1.Stay profitable 2.Operate a safe workplace 3.Be compliant with environmental regulations 4.Meet legal and social responsibilities 5.Monitor supply chain for potential liability Emerging 6.Manage GHG emissions, carbon footprint

3. Why Isn’t Industry More Energy Efficient? The business of industry is not energy efficiency Facility engineers typically do not become CEO or CFOs Budgets are separate for equipment purchases and operating costs Data on energy use of systems is very limited Difficult to assess performance or evaluate performance improvements Opportunities to become more energy efficient are overlooked

4. Industry and Energy Management Most energy efficiency in industry is achieved through changes in how energy is managed in an industrial facility, rather than through installation of new technologies; Companies that establish an energy management plan gain a number of benefits: —Develop a baseline of energy use —Actively managing energy use and reduce costs —Reduce emissions without negative effect on operations —Continue to improve energy use/product output over time —Document savings for internal and external use (e.g. emission credits)

5. Impact of Energy Efficiency Policies in Japan Ton oil eq. / Billion yen 2nd Oil Crisis 1st Oil Crisis Source: METI/General Energy Statistics 10 years Improvement by 30% 10% improved for 20 years Main Improvement *Energy Management *Energy Efficient Equip. *Efficient Process Tech. R&D

6. 6 Why an Energy Management Standard? An energy management standard provides a method for integrating energy efficiency into existing industrial management systems for continual improvement; All existing and planned energy management standards are compatible with ISO 9000/14000; 1 Companies who adopt an energy management standard are able to reduce energy use and improve operations, even if they are already complying with ISO 14001. Also applicable to commercial, institutional, and transportation sectors 1 International Organization for Standardization (ISO)

7. Components of an EM Standard Typical features include: 1.an energy management plan that requires measurement, management, and documentation for continuous improvement for energy efficiency; 2.a cross-divisional management team led by a representative who reports directly to management and is responsible for overseeing the implementation of the strategic plan; 3.policies and procedures to address all aspects of energy purchase, use, and disposal;

8. Components of an EM Standard, con’t 4.projects to demonstrate continuous improvement in energy efficiency; 5.creation of an Energy Manual, a living document that evolves over time as additional energy saving projects and policies are undertaken and documented; 6.identification of energy performance indicators, unique to the company, that are tracked to measure progress; and 7.periodic reporting of progress to management based on these measurements

9. ANSI MSE 2000:2008 www.ansi.org

10. Criteria for Superior Energy Management n Top management support n Suitable Resources n Well-defined goals, metrics and project plans n Organizationally Integrated n Continual Improvement Structure n Sustainable!

11. Energy Management Standards Current Status Several countries already have national energy management standards (Denmark, Ireland, Sweden, US, Thailand, Korea) The EU has developed a regional energy management standard, pr EN 16001 Energy management standards are under development in China, Spain, and Brazil ISO has initiated work on an international energy management standard (2008-2011) through Project Committee 242 Preparatory assistance from the United Nations Industrial Development Organization (UNIDO)

12. 12 ISO 50001: Energy management – Requirements with guidance for use Scope Standardization in the field of energy management, including: energy supply, procurement practices for energy using equipment and systems, energy use, and any use-related disposal issues. The standard will also address measurement of current energy usage, and implementation of a measurement system to document, report, and validate continual improvement in the area of energy management.

13. ISO Project Committee 242 Secretariat is co-led by the American National Standards Institute (US) and Associação Brasileira de Normas Técnicas (Brazil) September 8-10, 2008, 1st PC 242 Meeting in Arlington, VA, USA – 35 participating countries from all regions of the world, as well as UNIDO, which has liaison status – Two-year accelerated schedule to have ISO 50001 ready for publication by early 2011 March 9-12, 2009, 2 nd PC 242 Meeting in Rio de Janeiro, Brazil – PC 242 has already prepared two Working Drafts and will issue a Committee Draft in June 2009

14. 14 ISO 50001- potential impact The future ISO 50001 will: Establish a framework for industrial plants, commercial facilities or entire organizations to manage energy Have broad applicability across national economic sectors, potentially influence up to 60 % of the world’s energy use.

15. Driving the uptake of ISO 50001- Energy management in the United States

16. Superior Energy Performance (SEP) A U.S. industry initiative that provides industrial facilities with a road map for achieving continual improvement in energy efficiency while maintaining competitiveness. Superior Energy Performance goals: Encourage broad participation through tiered approach Use ISO 50001 standard as foundational energy management system Drive continual performance improvement in energy intensity

17. Foster an organizational culture of continuous improvement in energy efficiency in U.S. manufacturing facilities Develop a transparent system to validate energy intensity improvements and management practices (conformance with ISO 50001) Create a verified record of energy source fuel savings and carbon reductions with potential value in state, regional, national and international markets Superior Energy Performance Strategy

18. —Champion of U.S. industry in implementing and achieving national energy efficiency policy goals. —Seeks to improve the energy intensity of U.S. manufacturing through a series of initiatives. —Guides development of the Superior Energy Performance U.S. Council for Energy-Efficient Manufacturing

19. Benefits of ANSI-accredited SEP Certification to Manufacturing Plants Establishes systematic framework to achieve continuous improvement based on application of an energy management standard –Initially, the US energy management standard American National Standards Institute (ANSI)MSE 2000-2008, to be supplanted by ISO 50001 energy management in early 2011 –American Society of Mechanical Engineers (ASME) system assessment standards (compressed air, process heating, pumping, and steam) –Tools and resources to assist implementation and validation of energy performance improvement

20. Benefits of ANSI-accredited SEP Certification to Manufacturing Plants Certified plants receive recognition from: –Public – recognized leader in sustainable use of energy resources (local and financial community) –Supply chain – customer gives preferred supplier status Increases access to external financial incentives –Energy efficiency programs (electric utility & others) –Carbon credits – state, region and national

21. Certified by ANSI-accredited Certifying Body (initially KEMA in 2009, then others in 2010) in two areas: 1. Energy Management System Conformance - ANSI MSE 2008 standard and eventually ISO 50001 standard 2.Validated Energy Performance Improvement – Third party measurement & verification to meet minimum SEP energy intensity performance improvement requirements Getting Superior Energy Performance Certified

22. How SEP Supports and Builds the Industrial Energy Efficiency Market Implementation of an energy management system and independent validation of energy intensity improvements can provide benefits to: Supply ChainsProvides a pro-active turnkey program for major OEMs and retailers to request their suppliers to meet the program requirements ESCOsBuilds greater credibility with industrial customers and a stronger business case for providing third-party energy efficiency services and off-balance sheet capital investments UtilitiesEmpowers a plant-wide, systems-oriented approach Helps justify industrial energy efficiency program investments, including permanent operational changes, to public utility commissions

23. SEP Program Development Status Energy Management Standard Energy Management Standard System Assessment Standards System Assessment Standards Measurement & Verification Protocol Measurement & Verification Protocol Revised ANSI Management System for Energy (2008) Developed training and coaching materials for five pilot plants on MSE 2008 Formed US/ANSI Technical Advisory Group; participated in first and second ISO PC 242 meetings to move toward ISO 50001 Committee Draft Revised ANSI Management System for Energy (2008) Developed training and coaching materials for five pilot plants on MSE 2008 Formed US/ANSI Technical Advisory Group; participated in first and second ISO PC 242 meetings to move toward ISO 50001 Committee Draft Overall Developed Superior Energy Performance program strategy with SEP steering committee (now US Council for Energy Efficient Manufacturing) Established pilot program with five Texas plants; held 3 trainings, coaching Established US leadership in ISO 50001 standard development Developed Superior Energy Performance program strategy with SEP steering committee (now US Council for Energy Efficient Manufacturing) Established pilot program with five Texas plants; held 3 trainings, coaching Established US leadership in ISO 50001 standard development Formed four ASME technical committees to develop standards Completed four draft ASME standards (pump, steam, process heating and compressed air) and supporting guidance Field tested standards and revising standards based on industry feedback Formed four ASME technical committees to develop standards Completed four draft ASME standards (pump, steam, process heating and compressed air) and supporting guidance Field tested standards and revising standards based on industry feedback Produced draft measurement and verification (M&V) protocol to baseline and measure energy intensity performance improvement Hosted meeting of utilities and M&V Experts to discuss and provide feedback Produced draft measurement and verification (M&V) protocol to baseline and measure energy intensity performance improvement Hosted meeting of utilities and M&V Experts to discuss and provide feedback

24. Certifying Organizations for Professionals (TBD) Standards & Protocols SEP Planned Infrastructure Participating SEP program Manufacturing Plants Energy Management Practitioners Energy Management Practitioners System Assessment Practitioners System Assessment Practitioners Certified SEP Program Validation Specialists Certified SEP Program Validation Specialists SEP Program Administrator ANSI-accredited Certifying Bodies (TBD) ANSI-accredited Certifying Bodies (TBD) Energy Management Standard Energy Management Standard System Assessment Standards System Assessment Standards Measurement & Verification Protocol Measurement & Verification Protocol

25. Superior Energy Performance Program Design The 3-tiered program accommodates: —Maturity of plant’s energy management program —Level of external validation desired —Business climate/cycle PARTICIPANT Self-declaration PARTNER Third party remote verification CERTIFIED PARTNER ANSI-accredited certification

26. Major Milestones: 2009-2013 Sept. 2009: M&V protocol ready for pilot plant application Sept. 2009: Request applications from five Texas plants Oct. 2009: Hold state-regional SEP pilot plant workshop to coordinate pilot plant program Oct. 2009: First plant applies to SEP program Nov. 2009: Complete first plant on-site audit and review of conformance to SEP program requirements Apr. 2010: Select SEP Program Administrator by conducting DOE solicitation June 2010: Establish accredited Certified Practitioner professional certification organizations for energy management and SEP validation specialists June 2010: First (five) plants certified through ANSI-accredited Certifying Body Aug. 2010: Establish accredited Certified Practitioner professional certification in four system areas Nov. 2010: Begin training Certified Practitioners in energy management and SEP validation specialists through ANSI-accredited professional certifiers Jan. 2011: Begin training Certified Practitioners in four system areas through ANSI-accredited professional certifiers Apr. 2011: ISO 50001 Energy Management Standard published; replaces ANSI standard June 2011: National launch of Superior Energy Performance Program June 2013: SEP program self- sustaining on program fees

27. 27 For more information Superior Energy Performance www.superiorenergyperformance.net DOE Manager: Paul Scheihing Paul.Scheihing@ee.doe.govPaul.Scheihing@ee.doe.gov Energy Management Standards and System Standards http://industrial-energy.lbl.gov/node/94 ISO 50001 http://www.unido.org/index.php?id=o86084 http://www.iso.org/iso/pressrelease?refid=Ref1157 atmckane@lbl.gov