Strategic Industrial Energy Efficiency: Reduce Expenses, Build Revenues, and Control Risk

Some manufacturing companies successfully boost th eir financial performance through optimized energy use. This leads not only to reduced energy consumption and associated environmental benefits, but also to capacity improvements that generate additional revenue. Other manufacturers dismiss energy efficiency as a distraction from the central mission of producing and selling their products. Their disregard for energy efficiency results in the widespread forfeiture of opportunities to effectively compete in the global marketplace. Efficiency advocates celebrate examples of successf ul industrial energy management in an attempt to encourage others to follow. That promotion has not always been effective. Advocates have historically promoted energy efficiency as its own good outcome. That message does not resonate with business leaders whose success is predicated on sales volume and revenue growth. Full adoption of energy efficiency will be resisted as long as this message gap endures. To the extent that managers are una ware of the full range of energy-efficiency benefits, their budgeting process is skewed. Capital funding is almost always limited, and management biases tend to favor core processes over ancillary functions, including energy. Even if facility staffs are fully aware of energy improvement opportunities, they may lack sufficient time and appropriate labor to implement and maintain efficiency measures. Given incomplete knowledge of the benefits of energy efficiency, the easiest decision with respect to implementation is to “do nothing.” Efficiency advocates will make greater progress if they o ffer the industrial sector meaningful solutions to their current business needs. Any outreach to industry should provide a business philosophy that clearly states a desired outcome for industry’s corporate leaders, such as improved bottom-line performance, enhanced productivity, or relief from business risks such as power supply discontinuities. Energy efficiency is then articulated as a contributor to those needs. A well-crafted business philosophy should inspire corporate interest and shape the ensuing dialog with energy stakeholders. For industry, energy efficiency is not the goal, but the means by which larger goals are attained.