Name of Option:
Industrial Programs
Description:
The industrial sector accounts for about 40 percent of both electricity and
other energy consumption in the U.S. economy. The industrial market represents
major opportunities for large increments of load growth, conservation, and load
management.
Industrial DSM activities encompass a broad range of utility/customer
interactions: load management; interruptible rates; time-of-use pricing; and
end use applications.
Primary end use applications for industrial electricity can be grouped under
four major headings:
The results of industrial DSM technology options may include:
reduced capital requirements;
reduced energy consumption;
reduced spoilage/waste;
flexibility of raw material base;
greater control over production;
improved product quality and yield;
decoupling of production from fuel supply;
increased competitiveness;
increased production at less energy per unit produced; and
reduced environmental impacts (net and/or site).
Barriers:
- Tax treatment: Some IRS auditors have disallowed the current deductibility
of DSM expenditures and have required capitalization of these expenditures.
This action can jeopardize the financial viability of DSM programs.
- A portion of utility incentives is taxable income for the industrial
entity.
- Decision makers are often located far from regional plant.
- Modifications to industrial manufacturing processes are complex, and can
affect product quality and productivity. Manufacturers are reluctant to make
changes that affect production, or are perceived to affect production.
- Process modifications must often be coordinated with facility shutdowns or
turnarounds.
- Processes are often unique to each customer, complicating the design of a
traditional end use program.
- Process modifications are expensive, and often energy cost savings alone do not meet industry's payback and return-on-investment requirements.
- Energy efficiency expenditures are not competitive on a rate-of-return basis with product improvement expenditures.
- Many companies consider their production processes proprietary. They must be assured that their proposal will be handled in complete confidence.
- In some plants, no one may be directly responsible for energy efficiency. Day-to-day operations keep most production engineers and managers from focusing on projects that are not directly related to production.
- Electricity is a small part of many companies' overall costs.
- For utilities in non-growth areas, generation capacity deferral is not an incentive.
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Solutions:
- Build national partnership with corporate headquarters, e.g., a
comprehensive Green Lights type of effort.
- Support EPRI Industrial Centers and Offices, i.e., EPRI's Industrial
Competitiveness Project.
- Participate in CCAP Action #12 to create a Motor Challenge program to
increase market penetration of efficient electrical motor systems.
- Participate in CCAP Action #13 to establish Golden Carrot programs
for industrial air compressors, pumps, fans and drives.
- Participate in CCAP Action #14 to accelerate the adoption of
energy-efficient process technologies.
- Seek assistance from EPRI in analysis of impacts of DSM investments, i.e.,
EPRI Tailored Collaborative on Technologies.
- Use DOE Design Assistance Centers at Sandia National Laboratories and
NREL.
- Pursue rate incentives so utilities can earn a return for conducting DSM
programs effectively.
- Inform stakeholders of the economic and environmental value of
high-efficiency motors.
- Participate in the industry EnviroTech Investment Fund venture
capital fund for electrotechnologies and renewable energy technologies.
Industry-proposed solutions requiring legislative, policy, or regulatory
action.
- Tax treatment: Clarification that DSM expenditures are deductible in the
year incurred. This can be accomplished either administratively through IRS
notification or rulemaking.
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Partnerships:
- DOE, EPRI, manufacturers, and DOE National Laboratories, DOE Contact - Diane
Pirkey, Manager of DSM Programs, (202) 586-9839.
Case Studies:
- Minnesota Power's "Industrial Conservation Pilot Project" and "Large
Power Audits" provide significant and flexible funding for DSM with increased
on-site utility engineering support.
- Northeast Utilities has assisted more than 200 industrial customers in
improving energy efficiency and productivity through its "Energy Action
Program" by offering detailed process analysis and incentives to overcome first
costs. One such success, involving a manufacturer of cutting tools, reduced
electricity use by 20 percent, tripled productivity, eliminated hazardous
waste, and won DOE's 1994 National Awards Program.
- The Motor Challenge program was developed by the DOE to promote
voluntary collaborative efforts between the private and public sectors to
demonstrate, evaluate, and accelerate the use of efficient industrial electric
motor systems. Northern States Power (NSP) has partnered with 3M to develop a
showcase demonstration project as part of the Motor Challenge program.
This effort focuses on the 35 buildings of the 3M Center Campus located in St.
Paul that house production, laboratory, and administrative facilities. Energy
reduction measures identified thus far have centered on HVAC and production
process improvements.
- In addition to NSP's prescriptive rebate plan, which offers $5 per
horsepower for qualifying new motors and $11 per horsepower for qualifying
retrofits of operating motors, NSP is developing a "Motor Retrofit Program."
This program will be offered to encourage customers to change out a larger
percentage of older, less efficiently operating motors to new high-efficiency
motors. Customers are required to look at their entire motor inventory and
spotlight present and future motor needs. NSP works with customers and their
motor vendors to take advantage of price discounts that can be achieved through
large group orders and offer an additional incentive to help offset costs and
reduce payback periods.
- Menasha, Wisconsin, Electric and Water Utilities formed an industrial
partnership with a customer, Wisconsin Tissue, to cut peak demand. By
installing a $120,000 custom load management system, the utility reduced its
system load by 740 kW. The paper company is saving $63,000 annually in reduced
demand charges.
- Jersey Central Power & Light Company (JCP&L) has implemented rebate
programs for most high-efficiency equipment including a customized program to
provide incentives for high-efficiency process modifications. The company has
assisted a large firm in converting a CFC-based process to an ammonia-based
process and assisted in the installation of thermal storage for process cooling
applications. The company has promoted adjustable speed drives for all types
of industrial applications and worked with municipal water treatment plants to
improve their energy efficiency.
- Southern California Edison's "Clean Air Coatings" program and internal
combustion engine/motor replacement programs.
- Pennsylvania Electric Company, with support from EPRI, is applying the EPRI
pinch evaluation technique at a major industrial customer's plant. The
analysis will help determine actual steam requirements and look at alternatives
such as electric motors and co-generation for replacing steam drives.
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Option Category:
End Use
Name of Option:
Electrotechnologies
Description:
Many new electrotechnologies allow the substitution of an electric process
and/or electrical equipment for applications using other fuels or less
efficient electric equipment. Where the energy chain involved in electricity
production results in lower total emissions than a current alternative,
electrotechnologies will provide a net benefit to the environment.
Electrotechnologies may offer, in addition, reduced investment and operating
costs, improved product quality, and improved convenience of use. Current
applications of electrotechnologies are primarily in the commercial and
industrial sector; however, residential applications are increasing.
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Barriers:
- Cost of equipment; limited information and experience with new technologies;
perceived risks and uncertainties regarding performance.
- Infrastructure, marketing, and financing assistance is needed for firms
involved in technology development.
- Efficient electrotechnologies that produce a net reduction in CO2 emissions
may increase demand and, therefore, emissions for individual utilities.
However, some regulatory commissions may view this as load building and may
penalize the utilities.
- Many regulators do not have adequate understanding of the potential of
electrotechnologies.
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Solutions:
- Minimize the risk of adopting new electrotechnologies through participation
in government-sponsored demonstration projects and cost sharing with industries
that adopt environmentally beneficial electrotechnologies.
- Develop programs to inform and educate potential users of
electrotechnologies of the benefits associated with their use, both to the
potential user and to the environment.
- Develop methods for measuring and/or estimating reductions in emissions
associated with the use of electrotechnologies.
- Provide rebates and other incentives to foster developing markets.
- Participate in the EPRI Tailored Collaboration on Electrotechnologies.
- Participate in the industry EnviroTech Investment Fund venture
capital fund for electrotechnologies and renewable energy technologies.
- Participate in the development of model testimony to highlight environmental
benefits of electrotechnologies to regulators.
Industry-proposed solutions requiring legislative, policy, or regulatory
action.
- Fund federal programs such as National Clean Industry Initiative and
the DOE's Mainstreet Program, which will provide opportunities to
demonstrate electrotechnologies and move them to more widespread acceptance and
use; encourage one-stop shops for information on assessing technical,
financial, regulatory, R&D, and other support services for federal, state,
and other institutions; provide incentives for investment in energy-efficient
electrotechnologies; and provide pollution prevention education and training.
- Fund programs that encourage the use of electric vehicles, such as the EV
Commercial Demonstration Program and the EV Infrastructure Program
that were authorized in the Energy Policy Act of 1992.
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Partnerships:
- DOE, EPRI, EPA, electric utilities, the Electrification Council,
Electric Council for the Economy.
Case Studies:
- General Public Utilities' operating subsidiaries Jersey Central Power &
Light, Metropolitan Edison, and Pennsylvania Electric have initiated
electrotechnology programs which provide consulting support, education, and
project testing as well as specific project development assistance. Working in
cooperation with the EPRI Center for Materials Production, Metropolitan Edison
helped a steel casting company obtain an electric sand reclaimer which recovers
as much as 98 percent of its casting sand, which would otherwise be
landfilled.
- Metropolitan Edison provided technical input and rebate assistance to a
munitions manufacturer for the installation of an electrically controlled water
recycling system which conserves nearly 185,000 gallons of municipal water per
day and minimizes the release of atmospheric and cooling water contaminants.
- Potomac Electric Power Company's "Ecolawn" program promoting electric
lawnmowers.
- Indiana Michigan Power electric off-peak automated aluminum melting
system.
- Metropolitan Edison assisted an aluminum foundry customer in replacing two
gas-fired crucible-type furnaces with electric resistance melting furnaces to
produce a process which virtually eliminates air pollution, reduces metal
losses, increases product quality, and reduces labor costs.
- Georgia Power pressure-treated lumber curing and drying.
- Kentucky Power open cycle mechanical vapor compression.
- Pennsylvania Power & Light Tyler Pipe Case.
- Central Maine Power electric arc furnaces.
- Indianapolis Power & Light infrared (IR) sand reclamation.
- Southern California Edison ultraviolet (UV), IR, and radio frequency
curing and drying.
- Northeast Utilities UV curing and drying, IR sand reclaimer.
- Pennsylvania Electric Company is working with EPRI and a number of hospitals
in its territory to evaluate medical waste disposal electrotechnologies, with
particular emphasis on pyrolysis and microwave technologies.
- Pennsylvania Electric Company has participated in the EPRI Center for
Material Production Electric Arc Furnace (EAF) Dust Treatment Symposium. It
has also helped a number of its industrial customers attend the symposium.
This technology transfer activity helps provide industrial customers with
information on new clean environmental technologies and the regulatory
requirements pertaining to various practices in the customer's industry.
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END USE
RENEWABLE ENERGY GENERATION TECHNOLOGIES
OTHER GENERATION TECHNOLOGIES
