Certifying Industrial Energy Efficiency Performance: Aligning Management, Measurement, and Practice to Create Market Value

More than fifteen years after the launch of programs in the U.K. and U.S., industry still offers one of the largest opportunities for energy savings worldwide. The International Energy Agency (IEA) estimates the savings potential from cost-optimization of industrial motor-driven systems alone at 7 percent of global electricity use. The U.S. Department of Energy (USDOE) Industrial Technologies Program estimates 7 percent savings potential in total US industrial energy use through the application of proven best practice. Simple paybacks for these types of projects are frequently two years or less. The technology required to achieve these savings is widely available; the technical skills required to identify energy saving opportunities are known and transferable. Although programs like USDOE's Best Practices have been highly successful, most plants, as supported by 2002 MECS data, remain either unaware or unmotivated to improve their energy efficiency--as evidenced by the 98 percent of US industrial facilities reporting to MECS say that they lack a full-time energy manager. With the renewed interest in energy efficiency worldwide and the emergence of carbon trading and new financial instruments such as white certificates1, there is a need to introduce greater transparency into the way that industrial facilities identify, develop, and document energy efficiency projects. Historically, industrial energy efficiency projects have been developed by plant engineers, frequently with assistance from consultants and/or suppliers with highly specialized technical skills. Under this scenario, implementation of energy efficiency improvements is dependent on individuals. These individuals typically include "champions" within an industrial facility or corporation, working in cooperation with consultants or suppliers who have substantial knowledge based on years of experience. This approach is not easily understood by others without this specialized technical knowledge, penetrates the market fairly slowly, and has no assurance of persistence, since champions may leave the company or be reassigned after project completion.This paper presents an alternate scenario that builds on the body of expert knowledge concerning energy management best practices and the experience of industrial champions to engage industry in continuous energy efficiency improvement at the facility rather than the individual level. Under this scenario, standardized methodologies for applying and validating energy management best practices in industrial facilities will be developed through a consensus process involving both plant personnel and specialized consultants and suppliers. The resulting protocols will describe a process or framework for conducting an energy savings assessment and verifying the results that will be transparent to policymakers, managers, and the financial community, and validated by a third-party organization. Additionally, a global dialogue is being initiated by the United Nations Industrial Development Organization (UNIDO) concerning the development of an international industrial energy management standard that would be ISO compatible. The proposed scenario will combine the resulting standard with the best practice protocols for specific energy systems (i.e., steam, process heating, compressed air, pumping systems, etc.) to form the foundation of a third party, performance-based certification program for the overall industrial facility that is compatible with existing management systems, including ISO 9001:2000, 14001:2004 and 6 Sigma. The long term goal of this voluntary, industry designed certification program is to develop a transparent, globally accepted system for validating energy efficiency projects and management practices. This system would create a verified record of energy savings with potential market value that could be recognized among sectors and countries