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Sustainability is the biggest opportunity and challenge that industry faces.  Developing a strategy to take on sustainability is vital for the long term survival of industry. The motivation for industry is clear however the change in thinking required and the associated challenge for industry is significant. How can industry get past first cost and the paralyzing fear of change?  One thing we can’t get past is rising energy cost.  Since 1999 average energy rates have increased 50% for industrial and 30% for commercial businesses in the Northwest, other regions of the U.S. have experienced similar cost increases. 

The U.S. power industry must build at least 150 gigawatts of new generating capacity to meet electricity demand by 2030, at a cost of about $457 billion, according to preliminary findings of a new study being prepared by the Brattle Group on behalf of the Edison Foundation.  An additional $900 billion will need to be invested by 2030 in transmission and distribution facilities to modernize the national grid.  The additional capacity and transmission will come at a significant cost to the customer.  We have established this fact in my earlier blogs.

Three-fourths of U.S. electricity–69% of which is used in buildings, nearly all the rest in industry can be saved for less than the price of just running a coal or nuclear plant. This energy potential is not just in smarter motors, lights, appliances, etc., but even more in their larger systems. For example, three-fifths of the world’s electricity runs motors, and half their shaft power runs pumps and fans. Designing friction out of pipes and ducts can save 10 times as much fuel at the power plant and sizing equipment properly can save even more.

While it is important to negotiate the best price per kW/hr for electricity investment in energy efficiency is not only about obtaining the cheapest source of new power for business.  Cost savings through energy efficient systems, waste reduction, reduced risk, and increased workforce productivity will allow industry to achieve sustainability. Unfortunately many companies still focus on reducing staff, eliminating or reducing planned maintenance and in some cases run equipment to failure, all for the sake of increasing stockholder value.  This is a huge misconception that must change in order for U S industry to prosper.  Eventually equipment must be maintained, catastrophic failures typically cost more than a standard repair any perceived savings is eliminated when the equipment fails.  So who wins?  Maybe the pump repair shop but certainly not your company.

For the skeptics there is a very compelling business case exists for investment in energy efficiency.  According to the NPCC’s 5^th Power and Conservation Plan, costs associated with energy efficiency average about 2.4 cents per kW/hr.  I challenge anyone to come up with a better return on investment.

The U S Department of Energy Superior Energy performance Program is asking for 25% reduction in energy intensity (a measure of energy consumption per dollar of real gross domestic product) by the year 2017.  By working smarter, using the latest technology, thinking beyond 1^st cost and controlling your systems we can achieve the desired energy reduction. 

Don’t forget to think beyond energy savings, in many cases by optimizing the design of a new pumping system it is possible to lower construction cost and achieve better performance, the best of both worlds.

Sustainability through energy conservation is the best solution for our country.

Reference:  The Case for Efficiency by Amory B. Lovins

                    Energy Efficiency is Pro Business by Kevin Wilhelm

This entry was posted on Tuesday, July 22nd, 2008 at 12:39 pm and is filed under William Livoti Blog. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.