Lower Energy Costs and Sustainability Go Hand in Hand

Dec. 14, 2009
But legislative uncertainties complicate strategies for manufacturers.

Energy is a critical element in any attempt to build a sustainable production environment. The substantial savings that can come from using less energy per unit of production output are driving manufacturers to take a hard look  at energy conservation. They're also being spurred by the carrots and sticks legislators are using to provide incentives for conservation, coupled with punishment for insufficient action.

During the Nov. 10 Manufacturing Perspectives press event before Rockwell Automation's Automation Fair 2009, in Anaheim, Calif., a panel discussed these energy challenges for manufacturers.

Frank Peel, electrical support specialist at Owens Corning Canada, put the opportunities in perspective, and said that the energy bill for Corning's glass-melting process is approximately $1 billion per year.

The panel's underlying message   made it clear that sustainability is a battle on two fronts—compliance with legislation being considered in the U.S. Congress and self-initiated actions by companies.

Most of the discussion about possible legislation focused on the Waxman-Markey bill, which includes a requirement for 20% of electricity to come from renewable fuels by 2025; carbon capture and storage incentives; smart grid and electrical car provisions; higher energy efficiency standards for buildings, lighting and appliances; a cap-and-trade program; reduction of global warming gases to 83% of 2005 levels by 2050; programs to compensate energy-intensive industries for costs incurred under the bill; and green job creation.

The panel questioned whether some of the legislative goals are reasonable. When asked how an 83% reduction can be achieved, Isaac Chan, program supervisor-technology development at the  Department of Energy (DoE), said, "I don't know. There are no clear options if that legislation becomes law." He added that implementing state-of-the-art technology in every applicable area might save 30% of greenhouse gas emissions—nowhere near the 83% target.

Bigger gains would have to come from incentives or penalties, and realities about the industrial base complicate the matter. For example, eliminating all fossil-fuel-based electricity generation and all fossil-fuel-consuming vehicles still wouldn't address the enormous energy consumption of steel or cement manufacturing and other heavy industrial segments with enormous legacy equipment bases that can't be turned quickly, Chan said.

Furthermore, renewable energy sources such as wind, solar and others will have to be commercially viable so that companies will invest in them.

"We'll have to invent something. We'll need to replace steel. We have to drive the next industrial revolution," added Chan.
Despite the panel's opinion that even a 30% reduction by 2050 is not a realistic goal, it reported increasing company action in reducing energy consumption and carbon footprints.

Individual Company Action

Peel reported that Owens Corning's upper management has some of its compensation based on meeting greenhouse gas and other emission targets. "That program filters down to us at the plant too," he said. "Our engineering and maintenance heads targeted cutting $100,000 from our energy budget this year." Peel added that the plant actually is on target to save $160,000.
ConAgra's director of engineering Evan Hand, said his company recognizes and monetarily rewards the top five facilities that meet energy goals. "And we're on target to meet them. I have a personal goal of tens of millions of dollars in energy savings," he said.