How to radically transform industrial energy use

16 April 2012

Industry could by 2030 cut energy use by the equivalent of US and China combined

Improved efficiency could cut industrial energy use by more than a quarter, benefitting more than just the bottom line. Because industry accounts for about a third of global energy demand, greater efficiency in the sector is also a major step towards improved energy security as well as reduced greenhouse-gas emissions.

But for many reasons, companies often need help in pursuing efficiency as a strategic investment, even when it is a path to greater profitability. Government-led energy management programmes offer companies both a reason and a method to reduce energy consumption by revealing not only the savings but also improved productivity and competitiveness, even showing new business opportunities.

A new report jointly developed by the IEA and the Institute for Industrial Productivity (IIP), “Energy Management Programmes for Industry,” uses lessons learned from these programmes to present a ten-step implementation guide for policy makers. The report offers diverse approaches to fit the different frameworks and objectives of individual countries and industrial sectors. In-depth case studies show the importance of stakeholder consultation, pilot projects and evaluation, with one illustrating how other stakeholders such as the European Bank for Reconstruction and Development (EBRD) can support governments and industry.

“IEA analysis shows that, globally, industry could by 2030 cut energy use by the equivalent of the current annual electricity consumption of the United States and China combined,” said Bo Diczfalusy, Director of Sustainable Energy Policy and Technology at the IEA. “Much of this potential can be captured through energy management. However, this requires the development of effective policies. This report provides actionable guidance for how this can be done.”

Energy management involves the systematic tracking, analysis and planning of energy use. For more than two decades, energy management programmes have encouraged industry in certain countries to improve efficiency. Some programmes are compulsory while others are voluntary, but they all feature procedures and practices to encourage better energy use in industry.

Energy management programmes are not quick fixes: they work best when carefully planned and as part of a broader government agreement on energy efficiency. They need buy-in and so should be developed in a transparent manner and in close consultation with industry. Assistance, tools, training and many other resources are critical to success, as are initial incentives.

"When energy management systems are embedded within wider energy efficiency agreements, they often enable greater energy savings than what companies would be able to achieve with the agreements on their own," said Dr. Jigar V. Shah, Executive Director of the Institute for Industrial Productivity. "Proper adoption of energy management systems, underpinned by incentives and support systems, greatly facilitates the continuous identification and realisation of energy saving opportunities."

“Energy Management Programmes for Industry” is the fourth in the “policy pathways” series on how countries can achieve the IEA’s 25 Energy Efficiency Policy Recommendations. This latest report breaks down its 10 steps into 24 actions that keep policy makers on target as they move from planning to implementation, then monitoring and finally an overall evaluation. It distils the lessons learned by pioneers, helping policy makers benefit from other governments’ successes in using energy management programmes to counteract barriers to energy efficiency improvement and promote the transition towards more sustainable energy use in industry.

The IEA is grateful to the EBRD and the Government of Australia for supporting this Policy Pathway.

Policy Pathways: Energy Management Programmes for Industry

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