© AberdeenGroup 2009 Energy Management: Driving Value in the Industrial Environments Mehul Shah Research Analyst Matthew Littlefield Sr. Research Analyst

© AberdeenGroup  In the US, the industrial sector accounts for about one third of total energy consumption, which is more than any other sector, including: residential, commercial, and transportation¹  Globally, the industrial base now accounts for nearly half of all energy consumed².  In the top 10 most energy intensive industries, the cost of energy can ranges from 3.3% to 56% of the total dollar value add of production³. Why Now? ¹ "Annual Energy Outlook 2009", Department of Energy, Energy Information Administration, March 2009 ² "International Energy Outlook", Department of Energy, Energy Information Administration, May 2009 ³ "Energy Trends in Selected Manufacturing Sectors", Environmental Protection Agency, May 2007

© AberdeenGroup Agenda  Research Frameworks  Survey Demographics  Making the Best-in-Class  P.A.C.E. (Pressures, Actions, Capabilities, Enablers)  Recommended Actions

© AberdeenGroup Aberdeen’s Competitive Framework  In the research study, Aberdeen asked how companies performed with respect to Overall Equipment Effectiveness, Energy Efficiency and Operating Margin. Each respondent is subsequently categorized into:  Best-in-Class – Top 20% performers  Industry Average – Middle 50% performers  Laggards – Bottom 30% performers

© AberdeenGroup Aberdeen’s PACE Framework Pressures – What market pressures are driving executives to focus on energy management? Actions – What strategic actions are they taking in response to those pressures? Capabilities – What process, organizational, knowledge management and performance management differences enable greater business performance? Enablers – What technologies support the capabilities?

© AberdeenGroup Agenda  Research Goals  Survey Demographics  Making the Best-in-Class  P.A.C.E. (Pressures, Actions, Capabilities, Enablers)  Recommended Actions

© AberdeenGroup Study Demographics Between February and March 2009, Aberdeen examined the use, the experiences, and the intentions of more than 232 enterprises on energy management Industries 10% 9% 6% 15% 18% 9% Food/Beverage Automotive Pulp & Paper Industrial Equipment Chemicals Industrial Products Metals Utilities Geographies 67% 7% 14% 12% North America Europe Asia-Pacific Other

© AberdeenGroup Mode of Manufacturing Source: Aberdeen Group, April 2009

© AberdeenGroup Agenda  Research Goals  Survey Demographics  Making the Best-in-Class  P.A.C.E. (Pressures, Actions, Capabilities, Enablers)  Recommended Actions

© AberdeenGroup Best-in-Class Defined Definition of Maturity Class Mean Class Performance Best-in-Class: Top 20% of aggregate performance scorers 90% Overall Equipment Effectiveness Energy Efficiency % Margin Industry Average: Middle 50% of aggregate performance scorers 80% Overall Equipment Effectiveness Energy Efficiency 1.84 % Margin Laggard: Bottom 30% of aggregate performance scorers 66% Overall Equipment Effectiveness 6.13 Energy Efficiency -9% Margin

© AberdeenGroup Maturity with an Energy Management Program Source: Aberdeen Group, April % 20% 10% 22% 8% 0% 25% 50% More than 3 years1 to 3 YearsLess than 1 yearCurrently in Planning Stages No Plans Overall

© AberdeenGroup Agenda  Research Goals  Survey Demographics  Making the Best-in-Class  P.A.C.E.  Pressures  Recommended Actions

© AberdeenGroup % 20% 46% 80% 0%50%100% Elevated economic and consumer uncertainty Want to be a thought leader in sustainability Maintain or achieve a competitive advantage Need to reduce costs in manufacturing operation Overall

© AberdeenGroup Agenda  Research Goals  Survey Demographics  Making the Best-in-Class  P.A.C.E.  Strategic Actions  Recommended Actions

© AberdeenGroup Strategic Actions Source: Aberdeen Group, April % 32% 62% 67% 15% 41% 51% 69% 0%40%80% Create or improve collaboration across functional groups Include energy management in enterprise- wide Corporate Social Responsibility Initiatives Create / Improve visibility into energy across the enterprise Redesigning / optimizing processes to be energy efficient Overall BIC

© AberdeenGroup Establishing a Energy Management Culture Source: Aberdeen Group, April % 58% 37% 40% 24% 23% 0% 35% 70% Energy Management is one of the top three focus areas of company's strategic agenda Energy Management is one of the central part of the organizations culture BICIndustry AverageLaggards Cross-functional team across multiple plants to ensure best practices are shared and implemented. We track energy usage by asset. Our focus is to create a culture of energy and sustainability ~ Maintenance Manager, Food & Beverage

© AberdeenGroup Agenda  Research Goals  Survey Demographics  Making the Best-in-Class  P.A.C.E.  Capabilities: Process  Recommended Actions

© AberdeenGroup Process Capability Source: Aberdeen Group, April % 39% 58% 57% 49% 39% 38% 49% 31% 19% 26% 30% 0% 50% 100% Standardized processes to monitor energy across the enterprise Standardized processes to monitor emissions across the enterprise Established formal energy management programs endorsed by senior management Established short term and long term goals for individual plants / facilities Best-in-ClassIndustry AverageLaggards Each production area is tracked for Power Usage and we have monthly targets identified and mangers report what activities contributed to over target condition, and identify countermeasures to correct ~ Maintenance Manager, Automotive

© AberdeenGroup Agenda  Hypothesis  Survey Demographics  Making the Best-in-Class  P.A.C.E.  Capabilities: Organization  Recommended Actions

© AberdeenGroup Organizational Structure Source: Aberdeen Group, April 2009 We have created an energy conservation work group that teleconferences monthly to identify savings opportunities, review energy usage and determine a path forward in energy usage reduction ~ Mid Size Chemical Company

© AberdeenGroup Agenda  Hypothesis  Survey Demographics  Making the Best-in-Class  P.A.C.E.  Capabilities: Performance and Knowledge Management  Recommended Actions

© AberdeenGroup Knowledge Management Source: Aberdeen Group, April 2009 We've trained employees on our goals and solicited their input on potential projects. We've also formed special committees to perform some of the initiatives, and posted our goals on plant bulletin board ~ Director of Manufacturing

© AberdeenGroup Performance Management Source: Aberdeen Group, April 2009

© AberdeenGroup Agenda  Research Goals  Survey Demographics  Making the Best-in-Class  P.A.C.E.  Capabilities: Enablers  Recommended Actions

© AberdeenGroup Enablers for Energy Management Source: Aberdeen Group, April % 62% 60% 56% 50% 56% 40% 33% 29% 39% 27% 31% 24% 22% 0% 50% 100% Energy Efficient Hardware Employee Training & Certification Updated Energy Delivery Systems Technology to automate collection and monitoring of energy data Consultants Best-in-ClassIndustry AverageLaggards

© AberdeenGroup Technology Tools Source: Aberdeen Group, April % 44% 42% 34% 33% 30% 15% 9% 18% 5% 26% 11% 26% 20% 42% 21% 37% 22% 21% 24% 18% 0% 25% 50% Energy Management Alert / Event Management DashboardsPredictive Maintenance AnalyticsSPC (Statistical Process Control) Environment Management Workflows Best-in-ClassIndustry AverageLaggards

© AberdeenGroup Interoperability with Energy Management Tools Source: Aberdeen Group, April % 41% 17% 35% 30% 9% 26% 17% 9% 0% 25% 50% Asset ManagementDashboards & Analytics Advanced Process Control BICIndustry AverageLaggards

© AberdeenGroup Agenda  Research Goals  Survey Demographics  Making the Best-in-Class  P.A.C.E.  Recommended Actions

© AberdeenGroup Recommended Actions 1.Include energy management in corporate wide sustainability initiative 2.Establish executive level sponsorship for energy management programs with roles and responsibilities defined at an departmental level to drive the success of such programs 3.Include energy data (consumption, costs etc) as part of the optimization process to schedule maintenance and production activities 4.Provide real-time as well as historical energy data to appropriate employees as actionable intelligence 5.Invest in automating energy management to gain visibility into energy data and integrate it with existing technology investments

© AberdeenGroup 2009 Contact Aberdeen Mehul Shah Phone: Matthew Littlefield Phone: