Good morning and thank you for inviting me to attend the 2014 ENERGY STAR Awards.
Good morning, and you’re welcome. I’m glad you were able to attend our ceremony in Washington D.C. As you saw, each year the U.S. Environmental Protection Agency (EPA) honors a select group of organizations that have made outstanding contributions to protecting the environment through superior energy efficiency. These ENERGY STAR Award winners are chosen from a vast network of nearly 16,000 ENERGY STAR partners, and their achievements demonstrate that improving energy efficiency is one of the fastest and most effective ways to fight climate change, save money, and create jobs.
The ENERGY STAR Awards are EPA’s highest honors for superior energy efficiency, and several award categories exist. EPA’s ENERGY STAR Industrial Partners could receive either Sustained Excellence or Partner of the Year in the Energy Management category. These awards go to organizations for adopting a continuous energy management strategy across the organization’s entire portfolio of buildings and plants and for communicating the value of ENERGY STAR and energy management broadly.
We have a lot of readers and even Editorial Board Members from this group. Why did PepsiCo receive the Partner of the Year - Sustained Excellence Award?
We want to recognize companies who sustain their commitment to superior energy management year after year. If you look at PepsiCo for example, they received recognition for continued commitment to promoting strong energy management practices and the ENERGY STAR program throughout the food and beverage business community. Key 2013 PepsiCo accomplishments include:
- Advancing the energy performance of its operations by four percent. Since 1999, energy intensity has been reduced by 35 percent, equating to savings of $50 million and 600,000 metric tons of CO2 emissions.
- Realizing a nearly 10 percent improvement in energy efficiency in the beverages division through energy efficiency projects.
- Leading by example worldwide in supply chain energy management by implementing a global initiative to purchase only ENERGY STAR certified vending machines and product coolers. PepsiCo has improved the energy efficiency of its equipment by 50 percent as compared to models available in 2004, decreasing its energy footprint despite an increase in vending units placed.
Why was Toyota recognized?
Toyota Motor Engineering & Manufacturing North America) is the manufacturing headquarters for 15 vehicle, engine, and parts plans across North America. Key 2013 Toyota accomplishments include:
- Reducing energy intensity per vehicle by 1.4 percent. Energy savings since 2002 are valued at $420 million.
- Meeting EPA’s ENERGY STAR Challenge for Industry at six plants, with an average reduction in energy intensity of 18 percent; three plants achieved the 10 percent reduction goal within one year.
- Increasing the number of ENERGY STAR certified automobile assembly plants in Toyota’s portfolio from two to five plants.
- Providing leadership for energy management within the aluminum casting sector by recruiting Toyota suppliers to participate in EPA’s ENERGY STAR Focus on Energy Efficiency in Metalcasting, launched in 2013.
Why was CalPortland recognized?
As you know, CalPortland is a major producer of cement, concrete, aggregates, and asphalt in the western U.S. and Canada. CalPortland continues to take energy management to a new level as it celebrates the 10-year anniversary of establishing a formal energy program. Key 2013 CalPortland accomplishments include:
- Reducing energy intensity by nearly 2 percent compared to 2012. Since 2005, cumulative reductions of energy intensity of nearly 14 percent have saved over $52 million.
- Completing a $6.2 million gas conditioning tower project at the Mojave Cement Plant, reducing energy consumption by 15.7 million kWh per year and producing annual savings of $1.25 million.
“Sustainability is an important issue for our partners. We see a growing emphasis on water and solid waste management — in addition to energy management.”
— Elizabeth Dutrow, Director, ENERGY STAR Industrial Partnerships
Please describe your team and the Industrial Partnership.
I have worked for the Environmental Protection Agency (EPA) since college. In that time, I’ve worked in both regulatory and voluntary programs here. ENERGY STAR is, of course, a voluntary program making its success all the more exciting.
We have a very efficient team of three here that I lead. And, we have some very skilled support including consultants like Fred Schoeneborn, who formerly was the Global Energy Manager for Mobil Oil and created their comprehensive energy management program. We also have Bruce Bremer, who ran Toyota’s energy management program until his retirement. The manufacturing plant energy performance benchmarking we do (known as ENERGY STAR plant Energy Performance Indicators) are developed by Gale Boyd at Duke University, while our Energy Guides for helping specific industries find savings opportunities are prepared by Ernst Worrell at the University of Utrecht.
We started the industrial partnerships over a dozen years ago and have engaged well over 740 companies. I emphasize companies and not plants. When you start counting the large number of plants operated by our 740 industrial ENERGY STAR Partners, the energy savings numbers get exciting.
To become an ENERGY STAR partner, the President or Chief Executive Officer of a company submits a Partnership Agreement on company letterhead committing the company to the commonsense actions listed below. It’s a simple process with the partner agreement form online at www.energystar.gov/join.
- Measure, track and benchmark energy performance
- Develop and implement a plan to improve energy performance, adopting the ENERGY STAR strategy
- Educate the staff and the public about the partnership and achievements with ENERGY STAR
The action of completing the partnership letter is a unique tool and action that enables a company to engage across all levels and units on energy management to commit to manage energy well.
Please describe ENERGY STAR Certification for Plants
Just like products can earn ENERGY STAR certification, plants can be certified for superior energy performance. We do that by providing an ENERGY STAR plant Energy Performance Indicator (EPI) for evaluating the energy performance of a plant in comparison to its specific industry nationally. For instance, cement plants are scored against cement plants. By putting certain information into the models a company can get a score from 1 to 100, with average performance at 50 and best performance at 75 and above. To be eligible to earn ENERGY STAR certification, a plant must score at least between 75 and 100, i.e. be within the top quartile of its industry nationally. ENERGY STAR plant EPI’s, a unique form of benchmarking, often provide the first look at how a plant is performing within its industry relative to similar plants nationally.
ENERGY STAR Certification is awarded if a plant scores in the top quartile on energy management using the EPI, passes an environmental screen, and has a professional engineer verify the data provided. This is only available for plants where ENERGY STAR EPI’s are available for a sector. There is one sector where EPA recognizes the result from a private system for petroleum refineries, and that is the Solomon Associates EII®.
We are working with over 29 industrial sectors through our industrial focuses. In 2014 we will begin new industrial focuses for ammonia production/nitrogenous fertilizer and gypsum wallboard plants.
Of these 29 industrial focus sectors, we have developed 27 Energy Performance Indicators (EPI’s). Eleven are completed while sixteen are in development with more in planning for this year.
What is the ENERGY STAR Challenge for Industry?
Another energy management tool EPA offers is the ENERGY STAR Challenge for Industry. It is a basic tool that energy managers can use to build support for energy management at a manufacturing site. Industry uptake of this tool is exciting - over 800 sites are using it! And, several corporations such as General Motors, Hanesbrands, and Colgate-Palmolive even have registered all of their sites worldwide in the ENERGY STAR Challenge for Industry!
We encourage any plant or manufacturing site to take the Challenge. A site expresses its to achieve an energy intensity reduction of 10 percent in five years or less. A plant baseline is developed and registered with us. They don’t have to report annually but they do have to track progress and then can report that to us when the site achieves the reduction. The site is listed as a Challenge Achiever, we send a congratulatory letter to the CEO and the site can celebrate the achievement. There are a few other details on how this is accomplished but they are on the website at www.energystar.gov/industrychallenge along with listings of sites that are taking the Challenge and achieving it. It’s a nice tool to set goals and recognize plants that cannot achieve ENERGY STAR plant certification.
How do you recommend a company begin an energy management program guided by ENERGY STAR?
Often companies just perform energy efficiency projects and do not build a comprehensive energy management program. This results in a cycle of early energy savings followed by increases because energy is not being managed for the long-term. What’s missing is a powerful energy management program that spans the company and sustains savings through continuous and comprehensive energy management. The first step is to make a commitment to manage energy across the organization. It’s fairly easy to get started with ENERGY STAR. Have upper management sign the ENERGY STAR partner agreement. We help from there with the partnership and guidance that assist companies in moving forward.
The ENERGY STAR Guidelines for Energy Management are the strong backbone of thousands of energy programs in the U.S. This guide contains a step-by-step road map for continuous improvement, based on best practices we’ve learned along the way from working with the nation’s leaders in energy management. This takes effort - but one doesn’t have to re-invent a new process. Just follow this proven model.
The Guidelines are broken out into seven main steps. All actions in an energy management program fall within these seven steps. EPA has developed many resources in ENERGY STAR to teach companies how to execute the steps.
- Step 1: Make Commitment
- Step 2: Assess Performance
- Step 3: Set Goals
- Step 4: Create Action Plans
- Step 5: Implement Action Plans
- Step 6: Evaluate Progress
- Step 7: Recognize Achievements
All tools and resources are available free of charge online and are easily accessible from www.energystar.gov/industry.
What are some trends you observe with your ENERGY STAR Partner companies?
Sustainability is an important issue for our partners. We see a growing emphasis on water and solid waste management-in addition to energy management. Many of our partner companies are interested in taking on climate leadership and having carbon dioxide emission goals. We also see more companies are supporting their energy programs with enhanced capital funds. This is because corporate energy management programs have earned the confidence of the finance managers as they have come to recognize the positive return of energy projects.
What lies ahead for the advanced energy management programs?
In 2006, we produced guidance entitled, Energy Strategy for the Road Ahead. It’s located at www.energystar.gov/energystrategy and discusses how companies should think about energy management as a long-term process moving beyond energy conservation and looking at a company’s energy value chain – i.e. upstream to suppliers, within the company, and downstream to the product and customer. We have worked through ENERGY STAR to help many of our partners execute a strategy that goes beyond the basic energy management program. But there is more to do.
It has been exciting to introduce the topic in our focus industries and watch what some have been able to accomplish. For example, I have seen cement companies consider embedded energy in their energy value chain. After building their own solid internal energy programs, many are working upstream to improve energy efficiency in the stone quarries. Then, many of these same companies are looking downstream to work with their customers to help ensure ready mixed concrete operations understand energy management.
We are also pleased to see how the linkages among our ENERGY STAR Industry Focuses are producing results. We started with the Motor Vehicle focus in 2001 and since then we have added the supplier industries of glass, steel, petrochemicals, refining, etc. The interconnections are immense.
Thank you for your insights and congratulations for yet another successful year for ENERGY STAR®.
For more information on how to become an ENERGY STAR Partner visit www.energystar.gov/about/join-energy-star.