Wisconsin’s Focus on Energy Program Update and Best Practices John Nicol, PE Industrial Program Manager November 8 th, 2007

Best Practice for Energy Management Strong leadership & resource allocation Culture that recognizes value of EE Sub-metering Energy assessment of all capital projects “On the fly” adjustments for EE Source: Kamen, James A “Energy Management Practices Provide Manufacturing Advantage”. Energy User News.

Energy in Context – Global Consumption 3.5x

US Energy Consumption (EIA) (quadrillion Btu)

US Energy Production by Fuel (EIA) (quadrillion Btu)

US Electricity Production (EIA) (quadrillion Btu)

US Electricity Production (EIA)

Increased Energy Prices and Volatility Source: ACEEE from EIA 2007 Energy Prices

Climate Change Impact Powerful scientific consensus on global warming Damage already occurring Much worse lies ahead, including risk of abrupt changes Major reductions (60-80% by 2050) needed to avoid dangerous warming Arctic sea ice in 1979Arctic sea ice in 2003 Source: Union of Concerned Scientists

States with Global Warming Targets Source: Pew Center on Global Climate Change.

Multiple Energy Use Problems 1. Increasing costs for new power plants and fuel driving rates up 2. Facility energy operating budgets increasing 3. Global climate change with electric and gas energy use responsible for two thirds of greenhouse gases

Multiple Benefits of Efficiency 1. Reducing future utility rate increases - Energy Efficiency $2,000 per kW for new power plants 2. Energy operating budget increases - Facilities have saved 20%+ of energy costs through increased efficiency 3. Global climate change - Increasing efficiency is the most cost effective solution by far

Cost of Electricity Resources (Source: ACEEE 2006 & EPRI 2006)

Gather Data Quantify Opportunities Select Projects Provide Justification Gain Approval Implement Projects Analyze Data Awareness Planning Communication Goals Support Motivation Project Validation Performance Tracking Typical Approach to Energy Management A purely technical focus goes only so far

Energy Management …. … in Theory Management Commitment… Energy Champion… Measure & Monitor… Report & Communicate… Set Energy Savings Goal… Implement Projects… … in Practice …Management Concern …Another “Hat” for Someone …No Payback on Sub-Meters …Monthly Actual vs. Budget …Based on What? …No Support

Practical Energy Management 8 Sections 1.Management Plan 2.Facility Profile 3.Energy Use Profile 4.Best Practices 5.Project Prioritization 6.Project Management 7.Key Performance Indicators 8.Continual Improvement

Practical Energy Management Section 1 Management Plan An organized approach to continually improving your energy management program

Practical Energy Management Section 2 Facility Profile A summary of the energy data for your facility relative to other costs and years

Practical Energy Management Section 3 Energy Use Profile Estimates and shows the relative energy consumption for equipment

Practical Energy Management Section 4 Best Practices Description of Energy Best Practices for 16 common systems and first cut estimate of energy savings 16 Systems: Compressed air Lighting Space heating Ventilation Pumps Fans etc….

Practical Energy Management Section 5 Project Prioritization A systematic method for tracking and ranking individual projects and summarizing overall energy savings

“Left Side”

“Right Side”

Practical Energy Management Section 6 Project Management A systematic method for managing tasks and projects

Practical Energy Management Section 7 Key Performance Indicators Measures energy use per KPI such as MWh per Million Gallons

Practical Energy Management Section 8 Continual Improvement Documents and procedures to provide continual improvement approach

Briefing & Reports for Senior Management Energy Management Plan Energy Management Plan Prioritized List of Energy Projects Energy Team or Advocate Task List It All Starts Here PEM© Process for Energy Teams

Key Common Projects  Steam Systems (>80% of Gas Use) - 10 to 20% savings from failed steam traps, blowdown heat recovery, linkage-less burner controls, stack economizers, ventilation controls  Compressed Air Systems (10% kWh) - 10 to 50% savings from repairing leaks, centralized control, reduce pressure, variable speed controls  Pumping Systems (15% of kWh) – up to 40% savings from using variable speed controls instead of valves  Lighting Systems (8% of kWh) – 40 to 60% savings from using high bay fluorescent fixtures  Process Heating – up to 80% savings from recovering waste heat. This is a significant opportunity in some industries.

Key Emerging Opportunities  Drying/Separation - up to 55% savings from membrane technology  Process Heating/Melting - up to 40% savings from stack melters  Bio Gasification - up to 100% savings especially in Pulp and Paper  New Motor/Control Technologies - up to 60% savings  Combined Heat and Power (CHP) - very large potential savings

Focus Mission Accelerate the rate of energy efficiency improvement in Wisconsin by supporting energy efficiency projects that otherwise would not get completed.

Similar Programs Source: Pew Center on Global Climate Change.

Focus Program Basics 1. Project incentives Prescriptive/Direct Custom (up to 30% of project costs) 2. Study Incentives (50%) 3. Technical Support 4. Information & Education

Current Focus on Energy Budget 18 Month Focus Budgets $94.7 million Total Programs $51.6 million Business Programs $20 million Industrial Programs $34.8 million Residential Programs $8.3 million Renewable Program

Results FY Net results to date of entire program $225 million spent on Focus over last 6 years load that would otherwise exist 730,000,000 kWh 207 MW ($517 Million in power plant savings) 33,000,000 therms Over $750 Million lifetime customer savings

Industrial Program Results First Quarter FY 2007 Units Unverified Gross Sept 2007 Unverified Gross YTD Estimated Unverified Net YTD* Target through December 31, 2008% of Target Kw1,0313,4172,52918, % kWh8,086,37023,549,34717,441,518127,500, % Therms78,2391,484,549907,8386,000, %

RI TX VT WI Wisconsin Potential Annual Budget ($ millions) Annual Savings (millions of kWh) From ECW Potential Study – 0.7% Max

Industrial EE Barriers  Energy is small part of overall costs and not seen as core business  No commitment from upper management  Company culture does not support efficiency investments  Limited time to focus on energy  ROI is sometimes too small (> 1 year or >2 years)  May not trust energy savings will actually occur  Energy costs are paid out of operation budget, not linked to capital budget

Feedback and Program Improvement WIEG as a steering group for Focus Industrial Sector What ways can Focus provide a better service to help you reduce your energy costs?

Focus on Energy Industrial Technical Support and Project Incentives John Nicol Industrial Sector Manager