Topic Resources

Tools Used
Landmark Case Study

Bonneville Power Administration Energy Smart Industrial Program

Bonneville Power Administration's Energy Smart Industrial Program has changed how large industrial facilities consider and prioritize energy management. At the leadership level examples of affected behaviors include establishing and communicating energy policies and goals, conducting periodic reviews of energy performance, and including topics in communication with employees. At the operations level the program impacted a broad range of behaviors and practices. Common areas of emphasis included adopting procedures to operate the most efficient equipment under different operating scenarios (e.g. informed scheduling of parallel manufacturing lines), adopting more energy efficient standard operating conditions (e.g. reducing guard bands where possible), and ensuring proper maintenance and calibration of critical gauges (e.g. humidity probes, thermocouples, pressure gauges). Designated a Landmark case study in 2016.

Background

Note: To minimize site maintenance costs, all case studies on this site are written in the past tense, even if they are ongoing as is the case with this particular program.

In 2010, the Bonneville Power Administration (BPA) introduced the Energy Smart Industrial (ESI) energy management pilot program to the Northwest to help address common barriers for industrial facilities in achieving higher levels of energy efficiency. High Performance Energy Management (HPEM) was one component of the pilot program. HPEM was a multi-year, strategic energy management (SEM) approach to energy efficiency that teaches behavior-based and continuous improvement methods to drive ongoing savings. The program was designed for delivery to medium and large industrial facilities, including heavy industrial processes (pulp and paper, cement, glass, etc.), manufacturing (transportation, high tech, wood products, etc.), and municipal facilities (large water and wastewater treatment plants). HPEM helped large industrial companies develop and implement energy management systems through a combination of cohort-based training workshops, on-site coaching, technical support, and energy modeling. 

The first HPEM cohort, consisting of 13 industrial facilities in Washington and Oregon, completed its five-year project in 2015. At the end of the fifth year, this cohort reported annual savings of 20 million kilowatt-hours (kWh) and a total financial benefit of over $9 million. The magnitude and longevity of the savings brought this group into uncharted territory. HPEM demonstrated that a cohort consisting of motivated individuals, armed with the right knowledge and management support can achieve savings that are measurable and persistent via a largely low-cost/no-cost approach.

The program targeted energy-wasting activities broadly applicable to many different types of industrial facilities. Examples include:

  • Turning off idling equipment during non-production periods
  • Turning off lights in unoccupied areas
  • Reducing infiltration by closing doors and maintaining the building envelope
  • Turning off surplus capacity equipment
  • Using set-point checklists for equipment sensitive to energy

These behaviors were selected because of their broad applicability to many different types of industrial facilities. In addition, they are generally high-impact/low-cost/low-risk activities.

Getting Informed

While industrial facilities understand concepts of continuous improvement through approaches already used in other aspects of their operations, such as ISO, Lean, etc., very few had applied those concepts to the improvement of energy intensity. BPA’s partner in designing and implementing HPEM, Cascade Energy, had over 20 years of experience working with over 1,000 industrial customers on energy efficiency projects. Their experience showed that most facilities did not have well-defined business practices relating to energy management and generally treat energy as a fixed cost, with limited project-based activities as the sole tactic for improvement. In recruiting for this cohort, ESI representatives assessed several potential barriers to HPEM success, including commitment to cohort participation, ability to share energy and production data, and limited availability of staff resources (both corporate leadership and an energy champion to manage day-to-day activities) to support the HPEM project. Sites with substantial barriers were directed to engage with other ESI program components.

Delivering the Program

This section will be added based on the Landmark case study webinar presentation, scheduled for (date to come)

Measuring Achievements

Energy Savings

All HPEM energy savings were subjected to a rigorous measurement and verification (M&V) process. The M&V methods described in the ESI Monitoring, Targeting, and Reporting (MT&R) Reference Guide were used to quantify and validate energy savings via a top-down regression-based energy model. The energy models, developed for each participant, separated the effects of weather and production drivers from continuous energy improvement efforts. The overall energy savings was tracked using a cumulative sum of differences (CUSUM) methodology that quantified the aggregate difference between predicted energy use and actual energy use over a defined time period. BPA used these gross energy savings–which included both the energy saved from capital investments in efficient equipment and from behavior-based operations and maintenance (O&M) type improvements–to evaluate HPEM’s benefit. Savings specific to behavior-based/O&M changes were then calculated by removing the capital project savings from the gross energy savings.

The February 2013 Energy Management Pilot Impact Evaluation by the Cadmus Group verified an 88% realization rate. BPA has commissioned a second impact evaluation, which is expected to be released in late summer/early fall of 2016, which will include an even more detailed assessment of the durability of HPEM savings.

Behavior Change

The ESI program’s top-down modeling method measured the aggregate impact of all behavioral changes for each participating site. However, significant impacts could be detected by inflections in the resulting CUSUM (cumulative sum of energy savings) chart as seen in the example chart below from a large pulp and paper mill participating in HPEM.

Industrial energy conservation impacts

Due to the nature of industrial sites, behavioral impacts were highly site/system/process dependent.

Results

Overall Impacts

At the end of five years, the cohort reported annual savings of 20 million kWh, or enough energy to power over 2,000 Northwest homes for a year. The joint financial benefit over five years, including performance incentives and avoided energy cost, exceeded $9 million.

The ESI program also realized a significant increase in completed capital projects among the HPEM participants. The additional capital projects resulted from several factors, including the increased level of engagement promoted by the utility and ESI staff, along with ideas generated in the course of cohort meetings.

The ESI Program offered four additional HPEM cohorts that included a total of 23 participating industries that were saving at a rate of 37.7 million kWh/yr. as of April 30, 2016.

Cost Effectiveness

Cost-effectiveness for the HPEM program was on par with the ESI program as a whole (estimated at $0.181/kWh, unlevelled). Additionally, since program resources were front-loaded and savings grew over time, cost effectiveness improved as industrial businesses engaged in energy management components for three years or longer. The results of a series of cost tests, as reported in the February 2013 “Energy Management Pilot Impact Evaluation” performed by The Cadmus Group, showed that the ratepayer funds used for this energy management program were a solid public investment.

Individual Sites

The annual electrical energy consumption of the 13 participating sites ranged from 4 million to 56 million kWh/year, equating to a $200,000 to $3 million annual energy savings per site. On an individual site basis, the cohort included a broad range of performance, from 0% to nearly 17% energy savings. While the level of energy savings performance can be anecdotally correlated to several organizational characteristics, the most prominent factors include the end user’s overall commitment to organizational excellence, the level of effort from the energy champion, and the early identification of energy savings strategies. BPA sponsored an impact evaluation that included an assessment of cost effectiveness. The evaluators found the program was cost-effective from the Total Resource Cost (TRC) test, Utility Cost Test (UCT), and Participant Cost Test (PCT) perspectives if participants are engaged with the program for at least three years. The February 2013 “Energy Management Pilot Impact Evaluation” report is available on BPA’s web site.

Energy impacts for individual participants are provided in the table below. 

Contacts

 To come

Notes

At the onset of the ESI program, SEM principles were still evolving in the marketplace. A key innovation involved establishing an MT&R process to help ensure consistency and transparency in the methods used for estimating O&M and behavior-based savings, and for the treatment of capital projects and non-routine changes with project measurement boundaries. This methodology is documented in BPA’s ESI Monitoring, Targeting, and Reporting Reference Guide, now in its fifth edition. The Cadmus impact evaluation provided an objective validation of these methodologies.

Another innovative approach was the multi-year nature of the HPEM engagement (options included three- or five-year contracts). HPEM engagements longer than one year benefit both participants and the ESI program by increasing the magnitude and reliability of energy savings. ESI has combined an intensive, standardized first year curriculum with a lighter, targeted approach in the following years to maximum the investment of both program and participant staff. Longer HPEM engagements increase program delivery costs, but the investment is worthwhile, especially if the reliability of energy savings is compared to the lesser reliability of energy savings measured over shorter engagements.

Landmark Designation

The panel that designated this case study consisted of:

  • Arien Korteland from BC Hydro
  • Doug McKenzie-Mohr of McKenzie-Mohr Associates
  • Brian Smith from the Pacific Gas and Electric Company
  • Marsha Walton from the New York State Energy, Research and Development Authority
  • Dan York of ACEEE

Search the Case Studies

Click for Advanced Search »