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Strategic Energy Management

Utility Workshop John Wallner, Sector Manager March 29, 2011


NORTHWEST ENERGY EFFICIENCY ALLIANCE

Agenda Part One


Strategic Energy Management Management System Approach SEM definition SEM Pyramid Alignment with Sixth Power Plan Threshold of a System

Management System Approach


A management system is the framework of processes and procedures used to ensure that an organization can fulfill all tasks required to achieve its objectives. Modern Management Systems are based on Continuous Improvement.(PDCA) Management System Standards require external audit for registration. (ISO)
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Management Systems First 60 Years

1950s
DEMING

1980s
FOCUS ON QUALITY

1990s
INDUSTRY REFINEMENT

2000s
ENERGY

THANK ME LATER.

Strategic Energy Management

WHAT IS
STRATEGIC

ENERGY
MANAGEMENT
A system of practices that creates reliable and persistent energy savings.

Strategic Energy Management


US DOE Superior Energy Performance
System Standards

ISO 50001

CEI IEI HPEM

Management Systems for Energy


Controls Metering Employee Technical Awareness Training Benchmarking Analysis Software

Strategic Energy Management Programs


Energy Management Elements

Capital Plant Projects Assessments

Performance Indicators

Alignment to the Plan


The Sixth Power Plan identifies three levels of plant energy management:

Best: Integrated Energy Management Better: Energy Project Management Good: Plant Energy Management

STRATEGIC ENERGY MANAGEMENT:

WHAT IS THE MINIMUM? A Threshold of a System Executive Sponsorship

Goal Setting

Tracking System

STRATEGIC ENERGY MANAGEMENT:

WHAT IS THE MINIMUM?

Executive Sponsorship Alignment w/ Objectives Resources

STRATEGIC ENERGY MANAGEMENT:

WHAT IS THE MINIMUM?

Executive Sponsorship

Goal Setting Energy team Energy policy Tools

STRATEGIC ENERGY MANAGEMENT:

WHAT IS THE MINIMUM? Executive Sponsorship

Goal Setting

Tracking System Assessment Projects Measure Report

STRATEGIC ENERGY MANAGEMENT:

Threshold of the System?

Executive Sponsorship

System Right-Sized

Goal Setting

Tracking System

Agenda Part Two


NEEAs CEI Sector Vision Mission Goals Pre Initiative Situation CEI Offering Maturity model CEI Project Pipeline Measuring Energy Savings Key Learnings
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Vision and Mission

NEEAs Vision NEEAs Mission

Energy Efficiency is a cornerstone of a vibrant, sustainable Northwest Mobilize the Northwest to become increasingly energy efficient for a sustainable future

Industrial Sector

Mission Goal

Embed strategic energy management as a common industrial and agricultural business practice in the Northwest. Accelerate adoption of industrial and agricultural strategic energy management by addressing 50% of the regions electrical load by 2014.

Energy Management 2004-2005


Actual/Perceived State
Ad hoc piecemeal savings efforts Islands of uncoordinated activity Lone rangers doing good things Point solutions e.g. fix that leak Energy is something we use

Desired State Coordinated holistic energy management Leverage Industry Associations as reference partners Executive sponsorship defining the organizations commitment Organizational transformation addresses organization, people, systems, and measurement Energy is a resource we manage

30 Years of Energy Efficiency Measures


Big Goals:
25% reduction in energy intensity in 10 years

Increasing energy cost and threat of carbon legislation drive action

Stand alone projects snap-back

Consumers energy cost

A cycle of continuous investment without continuous improvement Energy savings from isolated programs
Yr 1 Yr 2 Yr 3 . . . . . . .

NEEAs CEI
A holistic energy management system that leverages the natural law of process management to:

understand, control, and improve energy use.

Market Transformation Theory


Our working hypothesis
Implementation of CEI leads to persistent measureable energy savings

Testing the hypothesis


Deploy CEI through field advisors to a targeted industry Work with companies to raise the level of implementation maturity Measure energy savings Independently validate results

CEI Deployment 2006-2010


Engaged Northwest Food Processors Association to leverage membership awareness

32 facilities committed to CEI 25 facilities engaged in CEI 15 facilities self sustaining CEI 2010

Levels of CEI Implementation Maturity


Level 5 Self Sustaining
Firm is maintaining NEEAs CEI independently of NEEA

Level 4 Practicing
Firm is implementing plans, measurements, and is generating savings

Level 3 Committed
Firm has a policy & plans, some dedicated energy management resources

Level 2 Engaged
Management staff is participating in energy assessment process

Level 1 Aware/Receptive/Interested
Firm is aware, key 1/1s explain the program, management is interested

NEEAs CEI Energy Savings


Establish baseline energy usage Initiate intervention Observe change in energy usage
kWh

Baseline (Expected) Behavior/O&M (Estimated Top Down) Physical System Measures & Engineering Calculations (Bottom Up) Total Implemented (Actual)

Baseline

CEI Starts

Now

Bottom-up analysis captures savings from energy projects Top-down analysis captures savings from all sources

Energy Savings 2009 Results


Independent validation evaluated 18 sites in 2009 and found:

Strong evidence that CEI is working in Food Processing Sector All 18 facilities have made O&M changes as a result of CEI 11 of 18 have implemented new capital projects supporting CEI They expect 15 of the sites to reach self sustaining Level 5 in 2010

Implementation of CEI has resulted in roughly 2% savings per year

NEEAs CEI Savings to Date

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Key Learnings
Senior management commitment is vital Organizations that demonstrate an existing learning culture fare best Industry associations/reference partners accelerate top management commitment and participation Successful implementation appears to be tied to internal and external champions Business conditions provide critical context for plant readiness

Industrial Energy Management 2010


Desired State Coordinated holistic energy management Leverage Industry Associations as reference partners Executive sponsorship defining the organizations commitment Transformation of organization, people, systems, measurement Energy is a resource we manage Actual State
Success in Food Processing Speeds industry acceptance of energy management Senior management commitment is vital Success in Food Processing Success in Food Processing

NEEAs 2011 Steps in SEM


Continue to expand supply base CEI version 2.0 release ISO 50001 release NW SEP Demonstration pilot wrap up Montana Small Manufacturers cohort

7 Habits of Highly Efficient Companies


1. Efficiency is a core strategy 2. Leadership & organizational support is real and sustained 3. The company has SMART energy efficiency goals 4. The strategy relies on a robust tracking and measurement system 5. The organization puts substantial resources into efficiency 6. The energy efficiency strategy shows demonstrated results 7. The company effectively communicates efficiency results Source: 2009 Pew Center on Global Climate Change
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