ARC's Wil Chin & Allen Avery Energy Management Outlook @ ARC Industry Forum 2010 in orlando, FL. ARC Energy Management Outlook 􀂍 Energy is a significant portion of production costs 􀂍 Many formalized internally-developed programs with central oversight 􀂍 Capture overall usage, monitor energy costs, 􀂍 Few measure in real time 􀂍 EMS tend to be home-grown 􀂍 Emerging, expect high-growth 􀂍 From accounting to reducing cost 􀂍 Users need easy open distribution of data 􀂍 Standardization from supplier solutions 􀂍 Ready for next step, plant-wide integrated solutions

1. ARC E M tARC E M tARC Energy Management
Outlook
ARC Energy Management
Outlook
Allen Avery
Analyst
ARC Advisory Group
Wil Chin
Research Director
ARC Advisory Group
aavery@arcweb.comwchin@arcweb.com

2. Energy Cost ForecastEnergy Cost Forecast
60
70
40
50
Electricity
onBTU)
20
30
Electricity
Coal
Natural Gas
Crude Oil
arspermillio
0
10
(2008Dolla
Energy Cost Will Rise Dramatically
0
1980
1983
1986
1989
1992
1995
1998
2001
2004
2007
2010
2013
2016
2019
2022
2025
2028
2031
2034
2
© ARC Advisory Group
Energy Cost Will Rise Dramatically
Source: EIA Annual Energy Outlook 2010 Early Release Overview

3. ARC Energy Management Solutions SurveyARC Energy Management Solutions Survey
Online since September 2009
114 respondents
Wide variety of industries represented
Management, Engineering and Marketing functions
well represented
M j it f d t f EMEA N th A iMajority of respondents from EMEA, North America
Organizations: manufacturer, supplier, SI, OEM
3
© ARC Advisory Group

4. Energy UseEnergy Use
Whatpercentage or portion of your productioncosts are made up of energy costs?
25 8%
6.5% 1.6% 1.6%
5%to 10%
25.8%
17.7%
24.2%
11%to 15%
16%to 20%
21%to 30%
22.6%
31%to 40%
41%to 49%
50%or more
Energy is a significant portion of production costs
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© ARC Advisory Group

5. Energy Management Initiative StatusEnergy Management Initiative Status
Are energymanagement and energyefficiencyalreadyimplementedinyourcompany as an integral
part of your businessand productionprocesses?(checkall that apply)
41.1%
37.5%
P d i
Business processes
15.2%Have not implemented an energy
management initiative
Production processes
6.3%
0% 10% 20% 30% 40% 50%
Don't know
M d h i l d
5
© ARC Advisory Group
Most respondents have implemented energy
management initiatives

6. Does your Organization Have an Energy
Management System (EMS)?
Does your Organization Have an Energy
Management System (EMS)?
26%
1. Yes, not integrated
7%
26%
2. Yes, integrated with business processes
33%
3. Yes, integrated with production processes
17%
4. No, plan to implement
5 No do not plan to implement
11%
5. No, do not plan to implement
6. Don’t know
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© ARC Advisory Group
7%

7. Monitoring Energy Cost in the PlantMonitoring Energy Cost in the Plant
Doyou monitor the energycosts of your industrial manufacturing processes?
26.6%15 2%
6.3%
Monitor energy costs in real time
for operating purposes
26.6%15.2%
Monitor energy costs periodically
for accounting purposes
Do not monitor energy costs
51.9%
Don't know
Many monitor energy costs, but few measure in real time
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© ARC Advisory Group

8. Do you Monitor Energy Cost?
(select all that apply)
Do you Monitor Energy Cost?
(select all that apply)
19%
1. Yes, monitor cost in real-time for operations
40%
19%
2. Yes, monitor cost periodically for accounting
32%
40%
3. No, only monitor energy consumed
9%
32%
4. Don’t know
9%
8
© ARC Advisory Group

9. Energy Management: Make or Buy?Energy Management: Make or Buy?
Doyou rely on internally-developedenergymanagementapplications,ordoyou use a
24 2%
Doyou rely on internally developedenergymanagementapplications,ordoyou use a
thirdparty solution?
75 8%
24.2%
Use an internally
developed solution
Use a solution from and
75.8%
Use a solution from and
outside vendor
Energy management solutions used tend
to be “homegrown”
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© ARC Advisory Group
to be “homegrown”

10. What Kinds of EMS Have You Deployed?
(select all that apply)
What Kinds of EMS Have You Deployed?
(select all that apply)
43%
1. Internally developed solution
11%
43%
2. Solution from enterprise supplier
26%
11%
3. Solution from automation supplier
0%
26%
4. Saas, outsourced solution
20%
0%
5. Don’t know
10
© ARC Advisory Group
20%

11. Rate the Effectiveness of Your EMS
(select all that apply)
Rate the Effectiveness of Your EMS
(select all that apply)
11%
1. Exceeded expectations
31%
11%
2. Met expectations
16%
3. Did not meet expectations
7%
4. Results of EMS not transparent
5 Performance not measured
18%
5. Performance not measured
6. Don’t know
11
© ARC Advisory Group
18%
6. Don t know

12. ConclusionsConclusions
Energy is a significant portion of production costs
Many formalized internally-developed programs witha y o a ed e a y de e oped p og a s
central oversight
Capture overall usage, monitor energy costs,
Few measure in real time
EMS tend to be home-grown
Emerging, expect high-growth
From accounting to reducing cost
Users need easy open distribution of data
Standardization from supplier solutions
12
© ARC Advisory Group
Ready for next step, plant-wide integrated solutions

13. Thank YouThank You
For more information, contact the author at
aavery@arcweb.com or visit our web pages at
www arcweb comwww.arcweb.com