1. Program Name or Ancillary Texteere.energy.gov Energy Efficiency in Large Industry in the U.S. - DOE R&D and Energy Management Activities Rio de Janeiro, Brazil August 10, 2011 James Quinn Energy Efficiency & Renewable Energy U.S. Department of Energy

2. 2 | Industrial Energy Efficiencyeere.energy.gov U.S. industry accounts for about one-third of all U.S. energy consumption. Petroleum Natural Gas Electricity* Coal and Coke Renewable Energy Residential 21.8% Industry 31.4% Commercial 18.7% Transportation 28.1% 35.8% 34.0% 14.0%* 7.7% 8.6% Reducing U.S. industrial energy intensity is essential to achieving national energy and carbon goals. * Excludes losses Source: Annual Energy Review 2008, EIA. U.S. Industry Energy Use

3. 3 | Industrial Energy Efficiencyeere.energy.gov Percent of Total U.S. Manufacturing Energy Small 5% Mid-Size 37% Large 58% U.S. Manufacturing Plants: By Size Small Plants Mid-Size Plants Large Plants Number of U.S. Plants All Plants 84,298 112,398 4,014 200,710 Energy-intensive plants consume over half of U.S. industrial sector energy. U.S. Industry Energy Use

4. 4 | Industrial Energy Efficiencyeere.energy.gov Energy Use by U.S. Manufacturing Sector Energy Consumption by Major U.S. Manufacturing Sector, 2006 Source: U.S. Energy Information Administration, Manufacturing Energy Consumption Survey 2006, 2009. Quadrillion Btu

5. 5 | Industrial Energy Efficiencyeere.energy.gov Energy Use by Industrial System in Energy-Intensive Industries * Process cooling and refrigeration, electrochemical, other processes ** Alumina and aluminum, cement, glass, foundries Source: Analysis of energy use in select energy-intensive industries, based on Energy Information Administration 2006 Manufacturing Energy Consumption Survey dataAnalysis Major Energy Uses Steam Systems: Offsite sources, onsite boilers, and CHP systems produce and distribute steam for use in industrial processes, including heat exchangers, turbines, fractionating towers, strippers, and chemical reaction vessels (>4,750 TBtu in steam use). Process Heating: Includes furnaces, ovens, digesters, evaporators, kilns, and melters used in many types of manufacturing processes (approx. 5,000 TBtu in fuel use) Machine Drive: Motor-driven equipment (e.g., pumps, fans, compressed air, material handling) accounts for >1,700 TBtu of electric energy use

6. 6 | Industrial Energy Efficiencyeere.energy.gov Strategy Energy efficiency can yield cost, productivity, energy supply resiliency, and competitiveness benefits to industry. Develop Next-Generation Manufacturing Processes & Materials Manufacturing processes that limit energy intensity Materials technologies that lower life-cycle energy consumption and provide low-cost, high performance Foster the Energy Management Services Industry Identify, deploy, certify, and reward effective energy management Develop tools and protocols to enable industry to measure and manage energy usage Promote education and hands-on training for a new generation of energy management engineers 28 MW, roll-to-roll manufacturing line for triple-junction amorphous silicon modules

7. 7 | Industrial Energy Efficiencyeere.energy.gov U.S. Oil and Natural Gas Prices, 1990-2011 Crude Oil & Gas Prices Are Volatile Source: U.S. Energy Information Administration, Monthly Energy Review. June 2011.

8. 8 | Industrial Energy Efficiencyeere.energy.gov Long service life of most industrial and manufacturing equipment (historically 5 to >30 years). New, energy-efficient processes require large, high-risk investment in applied technology development and demonstration to attract investment in full-scale, commercial manufacturing. –Demonstrate at “meaningful” scale in industrial environments –Develop application-relevant data Energy efficiency competes against other corporate priorities for capital. –Manufacturing supply chain is under increasing pressure to reduce costs and delivery times. –Limited understanding of the potential for large cost savings from energy-efficiency. Challenges

9. 9 | Industrial Energy Efficiencyeere.energy.gov Industrial Technologies Thrusts 1. Next Generation Manufacturing Processes and Materials Develop and demonstrate at a “convincing scale” new energy-efficient processes and materials technologies (e.g., low-temperature membranes, aqueous-based processes) for cost-effective products. Manufacturing processes that limit energy intensity and efficiently direct energy to the product, e.g., additive manufacturing, low cost titanium processing, directed heating and out-of-the- autoclave composite manufacturing. Materials technologies that provide energy efficiencies through low life-cycle energy consumption and low-cost, high performance structures for the renewable energy industry, e.g., hybrid materials, low cost carbon fiber, resilient coatings, and lightweight magnet materials. 2. Fostering the Energy Management Services Industry Establish scalable mechanisms to identify, deploy, certify and reward effective energy management practices and individuals. Develop tools and protocols to enable industry to measure and manage energy usage Promote education and hands-on training for a new generation of energy management engineers (Industrial Assessment Centers and university-based consortia that focus on precompetitive manufacturing R&D).

10. 10 | Industrial Energy Efficiencyeere.energy.gov Next Generation Manufacturing Advanced Materials New manufacturing concepts that reduce energy intensity or GHG by at least 25%. Thermal & Degradation Resistant Materials that increase service life tenfold or more Materials for Energy Systems that improve performance by at least 50% High-Temperature Processing Reactions & Separations Waste Heat Recovery Sustainable Manufacturing Energy Intensive Processes Industrial GHG Emissions Reduction Advanced manufacturing technologies Innovative enabling technologies Sensors and controls, catalysis, nanotech, micro- manufacturing, and other areas R&D Focus Areas in 2011 Innovation: “Grand Challenge” Research

11. 11 | Industrial Energy Efficiencyeere.energy.gov SuperBoiler Isothermal Melting (ITM) Process for Aluminum Continuous flow system with immersion heaters converts electricity to melting energy with 98% efficiency. Gas-fired package offers >94% fuel-to-steam conversion efficiency Demonstration at fruit processing facility in California R&D Success: Examples

12. 12 | Industrial Energy Efficiencyeere.energy.gov Highly sophisticated Basic understanding of energy management Little to no knowledge of energy management Driving Energy Management Throughout Industry Plants track energy data, set efficiency goals, invest in efficiency projects Energy data tracked sporadically, no specific efficiency goals Low energy efficiency activity Continuum of Energy Management Capacity ITP tailors tools and resources for various levels of maturity in plant energy management ITP resources are designed to help industrial plants progress in building their energy management skills.

13. 13 | Industrial Energy Efficiencyeere.energy.gov Leverage state, utility, and local resources to help manufacturers reduce energy use and carbon emissions today—and create a corporate culture that fosters continuous improvement. Training Basic and advanced Qualified Specialist Certified Practitioners Software Tools Process heating, steam, motors and pumps, fans Plant Energy Profiler Energy and carbon baselining Energy management Information Website EERE Information Center Tip Sheets Case studies Webcasts Supply chain guidance Energy Management Resources Savings Assessments In-plant, peer-to-peer Industrial Assessment Centers (IACs) Standards Superior Energy Performance (SEP) plant certification ISO 50001 System assessments

14. 14 | Industrial Energy Efficiencyeere.energy.gov Since Save Energy Now was initiated in January 2006: Over 1,000 energy assessments conducted at large plants to date Average plant has found ways to reduce energy bill by ~8% Over $1.2 billion in identified energy cost savings 10.4 million metric tons of CO 2 emissions reductions identified Since Save Energy Now was initiated in January 2006: Over 1,000 energy assessments conducted at large plants to date Average plant has found ways to reduce energy bill by ~8% Over $1.2 billion in identified energy cost savings 10.4 million metric tons of CO 2 emissions reductions identified Energy Management: Assessment Results for LARGE Plants

15. 15 | Industrial Energy Efficiencyeere.energy.gov SAVE ENERGY NOW – OVERVIEW In 2006, focus was on process heating and steam, with 200 assessments completed In 2007, expanded to include all system types, with 258 assessments completed In 2008, 260 assessments completed In 2009, 159 assessments completed In 2010, 102 assessments completed In 2011*, 37 assessments completed so far Total 1,016 ESA’s performed during 2006 - 2011 905 assessments with summary report (2006 - 2011) 659 assessments with follow-up information (2006-2011) * Out of 37 assessments conducted in year 2011, only 17 plants have submitted their summary reports so far. * Based on Save Energy Now assessments conducted between 2006 to 2011. Numbers are as of July 1, 2011.

16. 16 | Industrial Energy Efficiencyeere.energy.gov DOE energy expert teams visit plants, conduct analyses, and report to plant managers Teams focus on fans, pumps compressors, steam, process heating, or other plant energy system using DOE software tools The biggest savings come from improving process heating and steam systems Section I: US DOE’s Industrial Technologies Program Large Plants: System-Specific Improvements Energy Management: System-Specific Assessments Average plant found ways to reduce energy bill by about 8% Since 2006, industry has implemented approximately 20% of recommended savings and 50% of recommended savings were either in progress or in planning stages Average plant found ways to reduce energy bill by about 8% Since 2006, industry has implemented approximately 20% of recommended savings and 50% of recommended savings were either in progress or in planning stages

17. 17 | Industrial Energy Efficiencyeere.energy.gov “THE MAJOR” BARRIERS TO THE IMPLEMENTATION Further examination finds an unattractive return on investment, A change in the company policy emphasizing energy reduction, Process related limitations, concern regarding operational changes, Limitations of the current available technology or design, Red flags by the employees or political reasons, Limited in-house engineering availability, Company merger and new policies, Budget priorities and budget cycle, Operational downtime and impact on the production, scheduling issues. * Based on Save Energy Now assessments conducted between 2006 to 2011. Numbers are as of July 1, 2011. Feedback from Large Plants on Implementation Barriers

18. 18 | Industrial Energy Efficiencyeere.energy.gov 18 TOP TEN FREQUENTLY IDENTIFIED STEAM OPPORTUNITIES Top Ten Frequently Identified Steam Opportunities (ESAs - 2006 to 2011) No. of Times Identified Average Energy MMBtu Savings Identified (Source) Average Source Energy Savings % Identified (%) Average Energy Cost Savings Identified ($) Average Energy Cost Savings % Identified (%) Average of Payback Period Actual (yr) Change Boiler Efficiency37629,1360.9$206,3261.31.7 Reduce Steam Demand by Changing the Process Steam Requirements 30181,4552.0$482,6802.71.9 Improve Insulation23313,0160.5$97,6110.61.1 Implement Steam Trap Maintenance Program15322,3270.6$167,0570.7 Change Condensate Recovery Rates13627,5870.7$250,2880.91.4 Add or Modify Operation of Backpressure Steam Turbine 12368,9921.1$479,1872.12.6 Modify Feedwater Heat Recovery Exchanger using Boiler Blowdown 11315,4860.4$108,8060.51.2 Implement Steam Leak Maintenance Program11314,6170.3$73,9910.40.8 Change Boiler Blowdown Rate9815,7290.3$135,3790.52.1 Reduce or Recover Vented Steam6820,1430.8$137,8220.90.8 * Based on Save Energy Now assessments conducted between 2006 to 2011. Numbers are as of July 1, 2011. Save Energy Now – Steam Assessments - 2006 to 2011

19. 19 | Industrial Energy Efficiencyeere.energy.gov A market-based, ANSI-accredited plant certification program that provides industrial facilities with a roadmap for achieving continuous improvement in energy efficiency while boosting competitiveness. Superior Energy Performance launches in 2012 Uses ISO 50001 standard as foundational energy management system Drives continual improvement in energy intensity Develops system to validate energy intensity improvements and management practices Encourages broad participation throughout industry Energy Management: Superior Energy Performance

20. 20 | Industrial Energy Efficiencyeere.energy.gov An integrated set of technologies for the simultaneous, on-site production of electricity and useful heat. Combined Heat & Power (CHP) Energy Management: Technology Assistance Combined Heat & Power (CHP): CHP simultaneously Reduces GHG emissions Promotes use of secure domestic and renewable energy sources Reduces exposure to energy price hikes and volatility

21. 21 | Industrial Energy Efficiencyeere.energy.gov Supply Chain Strategy Existing DOE Partners: Industrial LEADERs, Commercial Building Energy Alliances Existing DOE Partners: Industrial LEADERs, Commercial Building Energy Alliances The strategy leverages existing tools and partners… Existing DOE Programs, Tools, & Resources Modified & refocused to target small & medium- sized suppliers Existing DOE Programs, Tools, & Resources Modified & refocused to target small & medium- sized suppliers Simple tools & guidance materials facilitate outreach/ engagement process Reduced energy & carbon footprints, reduced risk … to deliver extended benefits throughout the corporate value chain. Suppliers Pursue continuous improvement in energy & carbon management