Download Systems Upgrade for Energy Efficiency: The U.S. Experience

Samuel Neaman Institute, Technion, Haifa, Israel
Energy Forum, March 7th 2016
Systems Upgrade for Energy
Efficiency: The U.S. Experience
Perry Lev-On a,b Miriam Lev-On a,b, Ofira Ayalon a
a
Samuel Neaman Institute, Technion, Haifa, Israel
b The LEVON Group, LLC, California, USA
Background
In 1980, energy efficiency researchers formed the American
Council for an Energy-Efficient Economy (ACEEE), to act as a
catalyst to advance energy efficiency policies, programs,
technologies, investments, and behaviors,
 To help achieve greater economic prosperity, energy security,
and environmental protection
From 1980 to 2014, US energy use increased by 26%.
However, over this same period, US gross domestic product
(GDP) increased by 149%
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Energy Intensity Trends
 ACEEE report (2015) on the energy intensity of the economy (energy
use per real dollar of GDP) indicates:
 Energy intensity declined from 12.1 to 6.1 KBtus per $ of GDP from 1980 to
2014 respectively - a 50% improvement.
 It is conservatively estimated that about 40% of the improvement in energy
intensity was due to structural shifts in the US economy away from some
energy-intensive segments (e.g., heavy manufacturing), and 60% was due
to efficiency improvements.
 In 2014 energy efficiency savings were about 58 quadrillion* Btus, saving
US consumers and businesses about $800 billion in 2014 (based on the
average 2014 energy price). This is about $2,500 per capita.
* A quadrillion is 10 to the 15th power
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Energy efficiency and industry:
U.S. national trend
 The industrial sector accounts for about one-fifth of the US gross
domestic product
 Industry is unique among the end-use sectors in that its energy
intensity has declined consistently over the past 35 years
 During the period 1980 – 2013 industrial energy intensity declined
over 38%, even as the sector output has grown almost 50%
 The graph that follows shows an inverse relationship between
intensity and value of shipments, reflecting the relationship of
utilization of capacity in industry
 Reduced industrial energy use is also due to ‘system approaches’,
such as combined heat and power (CHP),
 For example, the U.S. chemical industry has reduced energy use per
unit of product by about 40% since 1980 by expanding CHP
installations and modernizing process technology.
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Industrial energy consumption, value of
shipments, and energy intensity, 1977–2013
Source: ACEEE analysis based on various EIA sources
The Four Pillars of Industrial Energy Efficiency
According to a recent publication by the
American Institute of Chemical Engineering
— ‘the four pillars of energy efficiency’ are:
1.
2.
3.
4.
Operational improvements
Effective maintenance
Engineered improvements
New technologies
In each area, robust energy management programs can support the behavioral and
process changes needed to capture and maintain savings and efficiency improvements.
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Pillar 1. Operational improvements
 Many operational improvements can be captured at
little or no cost.
 They are particularly attractive when energy prices
are low and it is difficult to justify investment in
energy-efficiency projects.
 Before committing to projects that require capital
expenditure, it is prudent to ensure that existing
equipment is being used to its full advantage.
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Pillar 2. Effective maintenance
 To get the most out of existing facilities, we must ensure
that the facility is properly maintained.
 The primary focus should be on the equipment and
systems that have the largest impact on energy use,
 heat exchangers, furnaces and boilers,
 heat traps and insulation
 compressors, pumps and turbines
 Also important is to audit and track steam piping and
properly manage steam leaks
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Pillar 3: Engineering Improvements
 Engineered improvements apply proven solutions to
identified problems
 Additions and upgrades to existing facilities, and
modifications to new facility designs can lead to significant
improvements in energy efficiency:
 Resequencing equipment (e.g. heat exchanges in a preheat train)
 Replacing and upgrading electric driver systems (e.g. installing variable
frequency drives)
 Adding heat exchangers, steam turbines, distillation columns, etc.
 Installing new control scheme
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Pillar 4. New technologies
 Incorporating new (or breakthrough) technologies
require validation through research and/or development
and require more time to implement, with higher
technical and financial risks.
 Some of the largest energy efficiency improvements have
come through technological breakthroughs
 A recent example is the rise in compact fluorescent lights
and light emitting diodes.
 They provide dramatic energy savings compared to the familiar
incandescent bulbs, and
 They have wide-ranging domestic, commercial, and industrial
applications.
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State Energy Efficiency Scorecard - 2015
Tipping point for energy efficiency
 State policies are increasingly
encouraging utilities to invest in
cost-effective efficiency,
prompting them to adopt new
business models that align their
interests with those of customers
and policymakers.
 Utilities across the United States
invested more than $7 billion in
energy efficiency over the past
year.
Source: ACEEE 2015 State Scorecard rankings
Components of State Energy Efficiency
 ACEEE ranks states for the scorecard on their
policy and program efforts and recommends ways
that states can improve their energy efficiency
performance in various policy areas such as:
 Utility and public benefits programs and policies,
 Transportation policies,
 Building energy codes and compliance,
 Combined heat and power (CHP) policies,
 State government–led initiatives around energy efficiency
 Appliance and equipment standards.
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Examples of States’ Energy Efficiency Initiatives
Financial incentives offered by state agencies:
 Come in many forms:
 rebates, loans, grants, or bonds for energy efficiency
improvements; income tax credits and deductions for individuals or
businesses; and sales tax exemptions or reductions for eligible
products.
 Can lower the up-front cost and shorten the payback period for energy
efficiency upgrades.
 Raise consumer awareness of eligible products, encouraging
manufacturers and retailers to market these products more actively
and to continue to innovate.
As economies of scale improve, prices of energy-efficient products fall, and
the products eventually compete in the marketplace without the incentives
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Financial Incentives: Tennessee
 In partnership with Pathway Lending, Tennessee provides low-interest
energy efficiency loans to businesses through the Pathway Lending Energy
Efficiency Loan Program (EELP).
 The state offers grants to utility districts and state and local government
entities for projects that promote energy efficiency, clean energy
technologies, and improvements in air quality.
 Through the EmPower TN initiative, the state has approved funding for
energy efficiency and renewable energy projects as part of its FY 2015/2016
budget.
 This initiative creates an enterprise system to collect energy cost and
consumption data to allow tracking, analysis, and benchmarking for every
state facility.
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Financial Incentives: Connecticut
 Connecticut Green Bank (CGB), formerly the Clean Energy Finance and
Investment Authority, is a quasi-public organization created by the state
legislature in 2011 as the nation’s first green bank.
 Funding for energy efficiency comes primarily from a system benefit charge,
Regional Greenhouse Gas Initiative (RGGI) auction proceeds, and ARRA
funds.
 CGB deployed or approved almost $25 million for projects in 2014. Programs
include loans for energy efficiency and renewable energy home improvement
projects.
 CGB has been a model for green banks in other states and at the national
level.
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States can “lead by example”
Lead-by-example policies:
 State governments can advance energy-efficient
technologies and practices by adopting policies
and programs to save energy in public-sector
buildings and fleets, a practice commonly referred
to as “lead by example.”
 “Lead-by-example” policies and programs are a
proven strategy for improving the operational
efficiency and economic performance of states’
assets.
 Lead-by-example initiatives also reduce the
negative environmental and health impacts of high
energy use and promote energy efficiency to the
broader public.
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States’ Research and Development Initiatives
Publicly funded R&D programs focused on energy efficiency:
 State R&D programs leverage resources in the public and private sectors,
foster collaborative efforts and rapidly create, develop, and commercialize
new energy-efficient technologies
 Several State institutions established in 1990 the Association of State Energy
Research and Technology Transfer Institutions (ASERTTI)
 To collaborate on applied R&D and share technical and operational information with
a strong focus on end-use efficiency and conservation
 Numerous other state-level entities (including universities, state
governments, research centers, and utilities) fund and implement R&D
programs to advance energy efficiency throughout the US economy.
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Research and Development: New York
 The New York State Energy Research and Development Authority
(NYSERDA) is a model of an effective and influential research and
development institution.
 Its R&D activities include a wide range of energy efficiency and renewable
energy programs organized into seven areas:
1.
2.
3.
4.
5.
6.
7.
energy resources,
transportation and power systems,
energy and environmental markets,
industry,
buildings,
transmission and distribution, and
environmental research.
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Thank you for your attention
Contact Information
Dr. Perry Lev-On and Dr. Miriam Lev-On
The LEVON Group, LLC
[email protected]
Prof. Ofira Ayalon
Samuel Neaman Institute
[email protected]
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