Energy Efficiency Potentialin the Wisconsin Industrial Sector

A Discussion With theWisconsin Industrial Energy Group

November 6, 2008

Wisconsin Energy Efficiency Potential Study

The Energy Center is preparing the study. It will serve as one of the inputs to the PSC’s decision process as to recommendations for future funding levels for the Focus on Energy Program.

The PSC is especially interested in innovation, including new technologies and program approaches.

Our initial estimates are due to the PSC in late December 2008.

We are taking stakeholder input both from customers who have participated in energy efficiency programs and from those that have not.

This meeting provides an opportunity for large industrial customers to have input to the process.

U.S. Industrial Electricity Use1949 - 2007

Source: U.S. Energy Information Adminstration

100,000,000

1,000,000,000

10,000,000,000

1949

1951

1953

1955

1957

1959

1961

1963

1965

1967

1969

1971

1973

1975

1977

1979

1981

1983

1985

1987

1989

1991

1993

1995

1997

1999

2001

2003

2005

2007

Year

MW

h (

log

sca

le)

1973 oil embargopre-oil embargo trend projection

7% annual growth

post-oil embargo actual consumption1% annual growth

Annual Rate of Change in U.S. Industrial ProductionSource: Economic Report of the President

0%

1%

2%

3%

4%

5%

6%

Pre Oil Embargo Post Oil Embargo

Period

Ye

ar-

to-Y

ea

r C

ha

ng

e

Projected Annual Rate of Change in Value of Shipments2008 - 2030

Source: U.S. Energy Information Administration

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

Energy Intensive Industries Non-Energy Intensive Industries

Industry Type

Ye

ar-

to-Y

ea

r C

ha

ng

e

Utility Infrastructure InvestmentSource: Edison Electric Institute

Electric companies are estimated to spend $14 billion per year on average over the next 10 years on distribution investment.

From 2000 to 2006, electric companies invested more than $37.8 billion in the nation’s transmission system. Electric companies are planning to spend an additional $37 billion from 2007 to 2010.

According to EIA, 258 gigawatts (GW) of new generating capacity will be needed by 2030 to meet the growing demand for electricity, at a cost of approximately $412 billion (in 2005 dollars).  This is equivalent to approximately 250-500 new baseload power plants (rated between ½ GW and 1 GW each).

McKinsey Study on theCost of Carbon Reductions

These reductions would involve pursuing a wide variety of abatement options at marginal costs less than $50 per ton, with the average net cost to the economy being far lower if the nation can capture sizeable gains from energy efficiency…Given the timing of investments relative to savings, the economy might well encounter periods of significant visible costs, with the costs and benefits shared unequally among stakeholders.

Source: McKinsey & Co, Reducing Greenhouse Gas Emissions: How Much at What Cost?, 2007.

Midwest Industrial Energy Intensity

Wisconsin Industrial Energy Intensity (2000-2006)

6.76.86.9

77.17.27.37.47.5

2000

2001

2002

2003

2004

2005

2006In

du

stri

al E

ner

gy

Use

(m

illio

n B

tu)

per

$1

000

Man

ufa

ctu

rin

g V

alu

e A

dd

ed

Wisconsin Industrial Energy Intensity

Wisconsin Industrial Energy Intensity (1970-2005)

02468

1012

1970

1975

1980

1985

1990

1995

2000

2005

U.S. DOE Industrial Assessment Center: Wisconsin Assessments (2000-2008)

152 assessments completed

Savings from implemented projects

Electric savings of 18 million kWh/year

Demand savings of 44,000 kW-months/year

Natural gas savings of 75,000 MMBtu/year

Total cost savings of $2.7 million/year

IAC Projects in Wisconsin

Electric Savings from Implemented Measures: 18 Million kWh/Year (2000-2008)

Equipment controls, 6%

Motors, 16%Air compressors,

17%

Heat recovery, 0%Lighting, 61%

IAC Projects in Wisconsin

Annual Electric Demand Reduction from Implemented Measures: 44,000 kW-months/year (2000-2008)

Lighting, 53%

Equipment controls, 2%

Air compressors, 19%

Other, 17%

Motors, 9%

IAC Projects in Wisconsin

Gas Savings from Implemented Measures: 75,000 MMBtu/year (2000-2008)

Other29%

Equipment controls1%

Building envelope3%

Boiler O&M11%

Furnace/oven O&M6%

Heat recovery16%

Space conditioning27%

Steam systems7%

Focus on Energy Industrial Program

Contact Information

Steve KihmSenior Project ManagerEnergy Center of Wisconsinskihm@ecw.org(608) 238-8276, ext. 131