Four keys to improving industrial competitiveness and reinventing buildings.

Improving industrial competitiveness and building energy footprint in the U.S. is at the fore of DOE’s initiative to double our nation’s energy productivity — or to increase GDP while reducing energy use — by 2030. This goal could save the United States $327 billion annually in avoided energy costs, create 1.3 million jobs, reduce imports to a mere 7% of overall energy consumption, and lower greenhouse gas emissions by 1/3 compared to the level emitted in 2005. It’s also inextricably linked to our economic growth and energy security.

Improving Industrial Competitiveness

In the industrial sector, accelerating energy productivity also means growing U.S. competitiveness, which has significant economic impacts. To get there, we face short-term and long-term options.

In the short-term, there are many available, proven — yet under-deployed — technologies that exist today to meet the challenge and have solid return-on-investments, but incentives packages are needed in order to deploy the technologies further.

For example, an estimated 60% to 65% of all electrical energy is used for motors, where 75% of the motors are variable-torque fan, pump, or compressor loads. Only about 3% of the total installed base of AC motors is provided with AC drives; however, drive technology is adopted in as many as 30% to 40% of all newly-installed motors. Applying VFDs, for example, can improve performance and reliability and reduce energy consumption by 18% across the 40 million motors in the United States.

In the long-term, improving energy productivity and industrial competitiveness requires investment in infrastructure — in integrated energy solutions, including combined heat and power, waste incineration, and manufacturing.

Although less prevalent in the United States today, combined heat and power is common in other regions of the world, especially in northern climates. A standard power plant is only 40% efficient; 60% of the input energy is rejected as waste heat. With CHP, however, the overall energy productivity is doubled to 80% because waste heat is captured and used for heating and cooling.

Reinventing Existing Buildings

In the commercial sector, there is tremendous opportunity to accelerate energy productivity by improving the existing building stock. Existing buildings in the United States account for 99% of the total buildings market, with new buildings representing a mere 1%. Together, these existing buildings use 36% of U.S. electricity and 21% of primary energy.

In the long term, we need to take a holistic (or systems) approach to buildings, building design, and use, including labeling and reporting. However, the opportunity today is clearly the existing building stock. Improving efficiency in existing buildings will require four collaborative actions from the private and public sectors.

First, and similar to accelerating energy productivity in the industrial sector, we need broad deployment of the available, proven energy-efficient technologies into the built environment. In the short-term, we need to take advantage of these existing technologies, such as variable speed, energy recovery, and renewables, in order to capitalize on the full retrofit potential. Market data reveals that 70% of all the HVAC systems shipped today are at the minimum regulated efficiency level, despite the fact that nearly every manufacturer offers systems that are at least 50% more efficient. Focusing on the total lifecycle cost rather than the first cost of the equipment would help to justify the ROI of premium equipment.

For example, beginning in 2000, the 64-story U.S. Steel Tower in downtown Pittsburgh began to retrofit a variety of HVAC pumps, fans, and motors. Today, more than 150 VFDs have been installed as part of the retrofit, which have helped contribute to more than $1.1 million in documented energy savings, reduced energy consumption by 1/3, enhanced demand response capabilities, and increased the value of the building — all with a financial payback as fast as less than one year due to the energy savings and supportive financial incentives.

Second, we need the right package of inducements, including financing and building labeling and reporting, in order to deploy existing technologies and unleash the true efficiency potential of the existing building stock.

Third, a level of transparency on energy use and commitments by both private and public building owners and operators are needed to make the economically justified investments in energy productivity.

Finally, we need supportive regulations and standards that focus on a whole building — or, in the industrial sector, whole factory — an approach that includes energy audits and building labeling. Progress is being made, primarily due to the actions of progressive states like New York and California and through standards like ASHRAE 90.1, but in general, we are approaching technological limits, often referred to as “max tech,” using the current component efficiency approach.

We have many proven technologies to reach the Energy 2030 goal, but we need to shift behavior and thinking on first costs and focus on total lifecycle costs in building and infrastructure investment — as well as improve collaboration between the public and private sectors. ES