Market News

 October 12, 2006
Low-hanging fruit for energy efficiency available

 Washington D.C., USA (GLOBE-Net) -- Energy efficiency investments with payback periods of less than six months -- "low-hanging fruit" - are readily available in the North American industrial sector, concludes a report by the American Council for an Energy-Efficient Economy (ACEEE).

Doug Dittburner, Chief Engineer at Unilever Canada and vice-chair of the Canadian Industry Program for Energy Conservation (CIPEC)Task Force Council, says the report is "right on the money," and that many low-cost opportunities to improve energy efficiency exist in Canada.

The report seeks to counter sceptics who believe that low-cost energy efficiency opportunities within the industrial sector are no longer available. Ripe for the Picking: Have We Exhausted the Low-Hanging Fruit in the Industrial Sector? uses data from the U.S. Department of Energy (DOE) to show that there is still excellent potential for improving energy efficiency.

Energy intensity as a whole has been steadily improving in the United States, leading many to believe that opportunities for further low-cost improvements with existing technologies are exhausted. According to the ACEEE, numerous analytical studies have found that abundant, low-cost efficiency opportunities exist in all parts of the industrial sector, corroborated by actual programs in individual companies.

While the costs of energy efficiency opportunities have increased in real terms over the past two decades, most investments still offer excellent paybacks. The median payback period of 5.2 months according to most recent data is greater than the 1980s value of 3.4 months, but still represents a very attractive investment opportunity, says the ACEEE report. Any payback period of less than one year is generally considered to be excellent, while simple paybacks of less than six months can be considered "low-hanging fruit".

The report examines energy efficiency trends over the last 30 years to determine how energy use patterns have changed. In recent years, high energy costs and global competition have made energy efficiency of primary importance to many firms.

The DOE's Industrial Assessment Centers (IAC) program provides data which indicates that manufacturers participating in energy assessments have saved an average of $30,000 per year in energy costs and $30,000 from reduced waste and increased productivity. Overall, with little more than half of the suggested improvements adopted by industrial users, the program averages $5--$9 of energy savings per program dollar; IAC audits are consistently able to find cost-effective recommendations for industrial facilities, and the savings level has not changed significantly in 25 years, indicating that efficiency opportunities are as available as ever.

The ACEEE report notes that while opportunities for gross waste elimination may be less than in the past, there has been a shift towards optimization and application of more efficient technologies. Energy efficiency opportunities are still plentiful at large and small facilities, though they may be in different forms than in the past, it concludes.

As the report highlights, low-hanging fruit opportunities often present themselves as the simplest and least glamorous energy-saving course of action companies can take. Examples of low-hanging fruit include turning equipment off when not in use, checking for air leaks, inspecting steam traps and replacing worn-out insulation. The difficulty with these energy-saving opportunities is that once they are identified, the company has to incorporate them into a company's operations or maintenance schedule or the low-hanging fruit could "grow back".

The ACEEE report can be obtained here.