If the Energy Savings and Industrial Competitiveness Act of 2013 promotes the adoption of more efficient electric motors in industrial facilities, that will be a welcome Earth Day gift for all of us.
Motors and the systems they drive are the single largest users of electricity, consuming more than twice as much as lighting. The International Energy Agency estimates that motors account for between 43 and 46 percent of all global electricity consumption.
This factoid came up while I was interviewing Heidi Lubin, co-founder of HEVT, about the company’s high-performance SRM motors. Never mind the carbon emissions that arise from using inefficient electric motors, even though it is significant. Businesses worldwide now spend $475 billion per year to power motors, and by 2030 that could rise to almost $756 billion, the IEA reports.
Shaving just one percent of that expenditure would cut energy bills by billions of dollars and reduce carbon emissions by many millions of tons a year.
Further analysis by sector points us to the heart of this opportunity. In industrial uses, motors’ share of electricity consumption is high as 69 percent. Industry’s disproportionate share of overall energy use is well understood. It gobbles a third of world energy, but is comprised of far fewer companies than the commercial sector, which consumes the same amount.
The smallest number of facilities, the largest share of energy — it seems like that would make industry a prime target for energy efficiency measures. The problem is that no two facilities are alike.
In the commercial sector, most office buildings are similar, most retailers are alike, and so on. Just upgrading lighting has produced healthy returns on incentive dollars spent.
In the industrial sector often there are just a handful of companies in a particular type of business. Yes, manufacturing plants look alike on the surface, but some of them forge steel or refine chemicals while others freeze food or make furniture. An incentive designed for one seldom makes sense for a great many, so the leverage associated with designing an incentive is reduced.
As a result the commercial sector receives a more robust portfolio of prepackaged measures with incentives that are ready to award; meanwhile industrial facilities rely on custom measures that take time and effort to define case by case. Many utilities nonetheless dive in and do that work.
Another barrier is a simple market dynamic: Big industrial users often buy their power directly from producers, which puts those users beyond the reach of utility energy-efficiency program designers and their regulators.
ENTER THE Energy Savings and Industrial Competitiveness Act of 2013, reintroduced last week in the United States Senate (the bill was introduced in the previous Congressional session as S. 1000 but failed).
Known as Shaheen-Portman for short, the bill is said to encourage industrial energy efficiency upgrades through tax credits and state grant programs, and research and development funding. Separately, President Obama has proposed a $200 million competitive state grant program designed to spur energy efficiency upgrades at industrial facilities.
Responding to the bill, Alliance to Save Energy President Kateri Callahan said, “We have a goal of doubling U.S. energy productivity between now and 2030, and the Shaheen-Portman Bill is a great start toward allowing us to achieve that very important goal.”
We can’t know what provisions, if any, of Shaheen-Portman will make it into law. We already know that motors’ outsize appetite for energy means they represent a lucrative opportunity for saving energy and money in almost every business sector. Several companies, from the big players to some startups like HEVT, are moving on that opportunity.
EARTH DAY is the ninth birthday of Energy Priorities Magazine. I hope when the analysts untie the bow on Shaheen-Portman we find some carrots and sticks to stimulate the market for efficient motors.
The carrots could take the form of technical assistance and tax credits to businesses deploying variable speed drives; rebates to buy down the cost of efficient motors; or incentives to upstream manufacturers to integrate controls into equipment. The stick could be minimum energy performance standards, as have been adopted in many of the world’s developed countries.
On the other hand, if we are disappointed in what Shaheen-Portman offers for reducing this category of energy consumption — or if Congress fails to pass it into law — then let’s talk at the state level about how to use that proposed $200 million grant program for energy efficiency upgrades at industrial facilities.
As Shaheen-Portman unfolds we’ll post updates on our Facebook Page.