INSTITUTE FOR    Industrial Productivity    Sharing best practices for low carbon enterprises   e   info@iipnetwork.org   ...
Decision-makers Matter!                Need	  to	  make	  a	  compelling	  business	  case	  to	  the	  board	            ...
‘Productivity’ or ‘Non-Energy Benefits’ (NEBs)NEB	  defini6on:	  •  Addi$onal	  enhancements	  to	  the	  produc$on	  proce...
A Different Business Case     h;p://www.iges.or.jp/en/cp/pdf/acAvity15/03.pdf	  
Quantifying NEBs: Case Studies (1)2	  key	  messages	  •  Co-­‐benefits	  oOen	  exceed	  the	  value	  of	  energy	  savin...
Hall et Roth: NEB
Quantifying NEBs: Case Studies (2)Key	  message:	  •  Quan$fying	  NEBs	  opens	  the	  door	  to	  more	  ambi$ous	  EE	 ...
Worrell et al: NEB in Cost Curves
Methodology & ChallengesMethodology	  &	  Findings	  •  Literature	  proposes	  methodologies	  to	  quan$fy	  NEBs	  (in	...
Issues & Suggested PrioritiesNEBs	  =	  a	  game-­‐changer	  •  @	  Project	  level:	  aLrac$veness	  of	  EE	  projects;	...
INSTITUTE FOR    Industrial Productivity    Sharing best practices for low carbon enterprises   e   info@iipnetwork.org   ...
ReferencesHall,	  N.	  and	  J.	  Roth	  (2003),	  Non-­‐Energy	  Benefits	  from	  Commercial	  and	  Industrial	  Energy	...
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Energy Efficiency & Industrial Productivity - Gaining through Saving, Julia Reinaud

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Energy Efficiency & Industrial Productivity - Gaining through Saving, Julia Reinaud

IIP discusses industrial productivity at the International Energy Agency's (IEA) Workshop on the Multiple Benefits of Energy Efficiency, March 14, 2012

http://www.iipnetwork.org/our-recent-activities#IEA_MAR

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Energy Efficiency & Industrial Productivity - Gaining through Saving, Julia Reinaud

  1. 1. INSTITUTE FOR Industrial Productivity Sharing best practices for low carbon enterprises e info@iipnetwork.org w iipnetwork.orgEnergy Efficiency & Industrial Productivity- Gaining through SavingIEA-SEAI Workshop: Evaluating the Multiple Benefits of EEJulia ReinaudMarch 15, 2012
  2. 2. Decision-makers Matter! Need  to  make  a  compelling  business  case  to  the  board   Produc6vity  gains  “sell”   Chief Technology Officer “Do we know what energy efficiency practices and technologies are available?” Financial Director Driver: knowledge Do we have the money to invest and are we willing to spend it on EE? Driver: Financials CEO Are we committed to prioritize EE above other investments? Driver: Commitment Marketing DirectorDo the public and market demand us taking EE measures? Driver: Public and market Regulatory Affairs Officer demand Does this government policy require us to take EE measures? Driver: Policy obligationSource:  Ecofys  in  Reinaud  and  Goldberg,  2011  
  3. 3. ‘Productivity’ or ‘Non-Energy Benefits’ (NEBs)NEB  defini6on:  •  Addi$onal  enhancements  to  the  produc$on  process  thanks   to  energy  efficiency  projects  (Worrell  et  al,  2003).  In   addi$on  to  reducing  energy,  these  projects  increase  the   produc$vity  of  the  firm.    •  EE  +  NEBs  =  increased  produc$vity  NEBs  include:  •  lower  maintenance  costs,    •  increased  produc$on  yield,  •  safer  working  condi$ons  and  a  beLer  working  environment,  •  reducing  waste  and  emissions  •  reduced  down$me  NEBs  also  called  co-­‐benefits  or  mul$ple  benefits  
  4. 4. A Different Business Case h;p://www.iges.or.jp/en/cp/pdf/acAvity15/03.pdf  
  5. 5. Quantifying NEBs: Case Studies (1)2  key  messages  •  Co-­‐benefits  oOen  exceed  the  value  of  energy  savings    •  Including  co-­‐benefits  reduces  payback  $mes  for  new  investments  Pye  and  McKane  (1999)  •  DOE’s  Motor  Challenge  Program  (41  projects)  •  Reduced  capital  expenditures  and  labor  costs  >>  energy  savings  Hall  and  Roth  (2003)  •  Wisconsin’s  Focus  On  Energy  Business  Program  (74  projects)  •  Value  of  NEBs  are  equal  to  about  2.5  6mes  the  projected  energy   savings  for  the  installed  measures•  NEBs  equal  to  about  $17,239  per  measure  installed  per  year  
  6. 6. Hall et Roth: NEB
  7. 7. Quantifying NEBs: Case Studies (2)Key  message:  •  Quan$fying  NEBs  opens  the  door  to  more  ambi$ous  EE  policies  Worrell  et  al  (2001  and  2003)  •  77  projects  in  6  OECD  countries  •  Improvement  of  payback  6me  from  4.2  years  to  1.9  years  aNer   mone6zing  co-­‐benefits  •  Inclusion  of  quan$fied  co-­‐benefits  in  an  energy-­‐conserva$on   supply  curve  for  the  US  iron  and  steel  industry  doubled  the   poten6al  for  cost-­‐effec6ve  savings    
  8. 8. Worrell et al: NEB in Cost Curves
  9. 9. Methodology & ChallengesMethodology  &  Findings  •  Literature  proposes  methodologies  to  quan$fy  NEBs  (in  $)  •  No  consensus  method  for  quan$fying  NEB  •  Interviews  &  surveys  are  the  1st    step  in  all  evalua$ons  of  NEBs    •  Quan$fica$on  of  the  NEBs  of  industrial  technologies  is  oOen   done  on  a  case-­‐by-­‐case  basis.  Challenges  •  Not  all  co-­‐benefits  are  easily  quan$fiable  in  financial  terms  (e.g.,   increased  safety  or  employee  sa$sfac$on)  •  Need  to  assess  net  co-­‐benefits,  as  nega$ve  impacts  may  be   associated  with  some  technologies  •  ALn!!!  some  projects  with  NEB  drive  higher  GHG  emissions…  
  10. 10. Issues & Suggested PrioritiesNEBs  =  a  game-­‐changer  •  @  Project  level:  aLrac$veness  of  EE  projects;  decision  making  •  @  Program  level:  é  cost  effec$ve  EE  poten$als  &  implementa$on  NEB  assessments  and  Energy  Management  Programs  •  PLAN:     •  Design  methodology  and  tools  to  evaluate  NEBs  (AUS)   •  Organize  pilots  &  case  studies  that  measure  NEB  of  several  EE   technologies  (US)   •  Integrate  EnMS  and  other  business  tools  (IR,  JP)  •  IMPLEMENT:  Communicate  &  promote  NEBs    •  M&E:  Include  indicators  for  NEB  quan$fica$on  at  the  start  (i.e.  in   the  ac$on  plan)  &  evalua$on  method  Ques6on:  Rebound  effect?  
  11. 11. INSTITUTE FOR Industrial Productivity Sharing best practices for low carbon enterprises e info@iipnetwork.org w iipnetwork.orgThank you!Julia.reinaud@iipnetwork.org
  12. 12. ReferencesHall,  N.  and  J.  Roth  (2003),  Non-­‐Energy  Benefits  from  Commercial  and  Industrial  Energy  Efficiency  Programmes:  Energy  Efficiency  May  Not  Be  the  Best  Story,  Energy  Programme  Evalua$on  Conference,  SeaLle.  Pye  M,  McKane  A  (1999).  Enhancing  shareholder  value:  making  a  more  compelling  energy  efficiency  case  to  industry  by  quan$fying  on-­‐energy  benefits.  In:  Proceedings  1999  Summer  Study  on  Energy  Efficiency  in  Industry.  Washington  DC:  ACEEE;  p.  325–36.  Reinaud  J  and  A.  Goldberg  (2011).  The  Boardroom  Perspec$ve:  How  does  energy  efficiency  policy  influence  decision  making  in  industry?,  IEA-­‐IIP  Informa$on  paper,  IEA/OECD,  Paris    Worrell  E.  J.  A.  Laitner,  M.  Ruth  and  H  Finman,  (2003),  Produc$vity  benefits  of  industrial  energy  efficiency  measures,  Energy  28  (2003)  1081–1098  1089  Personal  communica$ons  with  E.  Gudbjerg  

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