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© OECD/IEA 2015
Did it work? Evaluating the multiple benefits of energy efficiency in industry
Sam Thomas, IEA
Peter Warren, IEA
© OECD/IEA 2015
Session Outline
1. Industry quiz
2. Multiple benefits in industry
3. Quantifying multiple benefits
4. Summary and resources
© OECD/IEA 2015
Session Outline
1. Industry quiz
2. Multiple benefits in industry
3. Quantifying multiple benefits
4. Summary and resources
© OECD/IEA 2015
1) What is the industrial sector’s share of global energy consumption? 25%, 29%, 33%, 37%, 41%
2) Which of the following are the top three countries by CO2e emissions from industry? Russia, Japan, India, Brazil, China, USA, Saudi Arabia, Germany, Canada
3) In which country is the industrial sector’s share of energy consumption the highest? Cuba, South Korea, Russia, North Korea, China, India, Brazil, Liechtenstein
4) In which country is the industrial sector’s share of energy consumption the lowest? Ethiopia, Congo, Morocco, Luxembourg, Norway, Switzerland, Costa Rica, Latvia
5) Globally, which industrial sector is the most energy-intensive? Iron and Steel, Pulp and Paper, Non-Metallic Minerals, Chemicals
6) What is the share of global energy consumption from industrial SMEs? 5%, 10%, 15%, 20%, 25%
7) True or false: the energy intensity of crude steel is a level three indicator? 8) True or false: the power sector is included under the IEA’s definition of an energy-intensive
industry? 9) The European Union’s definition of an SME refers to organisations with:
<50 employees, <150 employees, <250 employees, <350 employees 10) Which of the following are ISO management systems?
ISO 50001, ISO 5001, ISO 14001, ISO 9001
Industry quiz
© OECD/IEA 2015
Session Outline
1. Industry quiz
2. Multiple benefits in industry
3. Quantifying multiple benefits
4. Summary and resources
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Making energy efficiency more exciting…
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Background: multiple benefits of energy efficiency
Strengthening the business case for energy efficiency by quantifying the value of other benefits.
Going from energy efficiency as simply a cost-saver or something nice to do to something that can create strategic value.
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Operations and maintenance
Improved operation; reduced need for maintenance etc.
Working environment Site environmental quality; worker health and safety etc.
Production Capacity utilisation; improved product quality etc.
Environment Air pollution; solid waste; wastewater; reduced input materials etc.
Competitiveness Ability to enter new markets
From saving energy … to generating strategic value to businesses
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Group exercise:
What are the most important multiple benefits in your country?
Which policy departments would you need
to influence to drive forward energy efficiency policy?
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Session Outline
1. Industry quiz
2. Multiple benefits in industry
3. Quantifying multiple benefits
4. Summary and resources
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Quantifying Multiple Benefits
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Industrial productivity: key messages
Numerous multiple benefits
Quantification is difficult but possible
There is a value in estimates
Quantifications contribute to more robust financial assessments and better decisions
Quantifications reduce payback and show better return on investment
Further work needed on industry-level assessments to develop methodologies
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Accelerate energy efficiency in industry
Costs
Productivity
Product quality
Manage supply disruptions
Competitiveness
Growth
Employment
Multiple Benefits Flow
Energy demand
Energy imports
Economic growth
Employment
Individual Firms Economy
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Measuring macroeconomic impacts
Need a modelling framework that both
Captures sufficient level of ‘micro level’ detail – e.g. energy use along side capital, labour and other produced inputs (materials) in a production function
And captures interactions between different industries, economic agents, factor demand and supply, via a range of markets
Computable general equilibrium (CGE) models
Depending on what is being studied and in what context, different model priorities
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Impact on public finances
Investment effects Energy savings effects
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Other multiple benefit evaluation approaches Hedonic price models (to reveal changes in asset values)
Air pollution impact models (to link efficiency changes to release of pollutants to health impacts)
Greenhouse gas impact models (emissions factors)
Energy security analysis (impacts on risks)
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Session Outline
1. Industry quiz
2. Multiple benefits in industry
3. Case studies
4. Summary and resources
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Summary
Multiple benefits approach
Industrial productivity:
Cost reduction, value increase, risk mitigation
Competitiveness, Production, Operation & Maintenance
Working environment (e.g. health and safety)
Environment
Quantification of multiple benefits:
Difficult but possible
Approaches are at an early stage of development
Link to wider community of multidisciplinary analysts
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Resources
International Energy Agency (IEA) Capturing the multiple benefits of energy efficiency, Chapter 5, IEA, Paris, France
Joint UNIDO-UNEP Programme on Resource Efficient and Cleaner Production (RECP) Peru National Cleaner Production Centre, Case Study Series, www.unido.org/fileadmin/user_media/Services/Environmental_Management/Contacts/Contacts/PERU%20METALEXACTO%20SUCCESS%20STORY.pdf
Rasmussen, J. (2014) “Energy-efficiency investments and the concepts of non-energy benefits and investment behaviour”, presentation at the 2014 ECEEE Industrial Summer Study, European Council for an Energy-Efficient Economy (ECEEE), 2-5th June 2014, Arnhem, Netherlands
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Case Study: Peru
Boosting Production:
Background: Metalexacto – a small, secondary lead producer
Actions: replaced a burner, optimised the fuel mix used, changed refractory bricks and installed a hood on the furnace
Results: Increased extraction of lead of 34.7 t/yr at a value of USD 16,980/yr
Energy demand reduction value of USD 1,850/yr
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Case Study: Denmark
Reducing Equipment Damage:
Background: Danish company aimed to reduce energy demand in the process of producing liquid gases
Actions: Used a combination of an ozone unit and a sand filter to reduce the temperature of cooling water
Results (Quantitative): Reduced amount of required process chemicals creating savings of USD 50,000/yr;
Reduced the need for corrosion inhibitors creating savings of USD 12,000/yr
Reduced corrosion damage – valued at USD 20,000/yr
Energy savings of 153,000 kWh/yr creating savings of USD 12,000/yr
Results (Qualitative): Reduced labour costs
Less down time
Reduced negative environmental impacts
Improved working environment