Implementation of energy efficiency measures in compressed air systems: barriers,drivers and non-energy benefits

Increased global competition and resource scarcity drives industrial companies to cut costs. Energy can be a significant component of such cuts, particularly for energy-intensive companies. Improving energy efficiency in industry is complex, as it pertains to various energy-using processes that are heavily intertwined. One such process is the compressed air system (CAS), which is used in most industrial companies worldwide. Since energy efficiency improvement measures for various types of energy-using processes differ, technology-specific measures might encounter different barriers to and drivers for energy efficiency. The same applies to the non-energy benefits (NEBs) related to energy efficiency improvement measures; since measures vary between various energy-using processes, the perceived NEBs might be different as well. The aim of this paper is to study the barriers to, drivers for and NEBs of CAS energy efficiency improvement measures from the perspectives of three actors. Carried out as an interview study combined with a questionnaire, the paper merges the perspectives of users, audit experts and suppliers of CASs. The results showed that the major barriers are related to the investment, or are of an organisational character, and that organisational and economic factors seemed to be important for making positive decisions on energy efficiency investments and measures in CASs. Major NEBs for CASs include productivity gains and the avoidance of capital expenditures. The results of this study also address the importance of having a comprehensive approach to recognise additional effects of energy efficiency improvements in CASs.     

The additional benefits of energy efficiency investments—a systematic literature review and a framework for categorisation

Investments in industrial energy efficiency are essential for meeting future energy needs. Nevertheless, the industrial sector’s current efforts in energy efficiency investments are insufficient. Additional benefits of energy efficiency investments have been suggested to improve the financial attractiveness of energy efficiency investments. Yet, previous research indicates that not all benefits are included when investment opportunities are evaluated, leading to an underestimation of what a firm will gain from the investment. Additionally, previous research lacks conceptual frameworks for describing these additional benefits at an early stage in the investment process. Moreover, various benefit terms are found in currently existing research, but there are a lack of definitions and distinctions attributed to these terms. Therefore, this paper provides a systematic review on the benefit terms of energy efficiency investments, establishes non-energy benefits as the term most relevant for such investments and provides a new definition of the concept. Further, a new framework for categorising non-energy benefits to enable them to be included during the investment process is developed, in which the level of quantifiability and time frame of the non-energy benefits are taken into account. Including non-energy benefits in the investment process can make energy efficiency investments more attractive and increase their priority against other investments. Moreover, non-energy benefits can reinforce drivers as well as counterbalance known barriers to energy efficiency investments. Acknowledging non-energy benefits can thus contribute to an increased adoption level for energy efficiency investments.     

Barriers to and drivers for energy efficiency in the Swedish foundry industry

Despite the need for increased industrial energy efficiency, studies indicate that cost-efficient energy conservation measures are not always implemented, explained by the existence of barriers to energy efficiency. This paper investigates the existence of different barriers to and driving forces for the implementation of energy efficiency measures in the energy intensive Swedish foundry industry. The overall results from a questionnaire show that limited access to capital constitutes by far the largest barrier to energy efficiency according to the respondents. A comparison between group-owned and privately owned foundries shows that, except for limited access to capital, they face different high-ranked barriers. While barriers within group owned companies are more related to organizational problems, barriers within private foundries are more related to information problems. This study also found that energy consultants or other actors working with energy issues in foundries are of major importance in overcoming the largest barriers, as the foundries consider them trustworthy. They may thus help the foundries overcome organizational problems such as lack of sub-metering and lack of budget funds by quantifying potential energy efficiency investments. The two, by far, most important drivers were found to be people with real ambition and long-term energy strategies.     

Pricing district heating by marginal cost

A vital measure for industries when redirecting the energy systems towards sustainability is conversion from electricity to district heating (DH). This conversion can be achieved for example, by replacing electrical heating with DH and compression cooling with heat-driven absorption cooling. Conversion to DH must, however, always be an economically attractive choice for an industry. In this paper the effects for industries and the local DH supplier are analysed when pricing DH by marginal cost in combination with industrial energy efficiency measures. Energy audits have shown that the analysed industries can reduce their annual electricity use by 30% and increase the use of DH by 56%. When marginal costs are applied as DH tariffs and the industrial energy efficiency measures are implemented, the industrial energy costs can be reduced by 17%. When implementing the industrial energy efficiency measures and also considering a utility investment in the local energy system, the local DH supplier has a potential to reduce the total energy system cost by 1.6 million EUR. Global carbon dioxide emissions can be reduced by 25,000 tonnes if the industrial energy efficiency measures are implemented and when coal-condensing power is assumed to be the marginal electricity source.     

An energy efficient Swedish pulp and paper industry – exploring barriers to and driving forces for cost-effective energy efficiency investments

Despite the need for increased industrial energy efficiency, studies indicate that cost-effective energy efficiency measures are not always implemented, which is explained by the existence of barriers to energy efficiency. This paper investigates whether this holds for the Swedish pulp and paper industry, and if so, investigates the barriers inhibiting and the driving forces stressing cost-effective energy efficiency investments. By so, this case study covers about 2% of the EU-25 industrial end-use of energy. The overall results from a questionnaire show that there is an energy efficiency gap in the sector and that the largest barriers were technical risks such as risk of production disruptions, cost of production disruption/hassle/inconvenience, technology inappropriate at the mill, lack of time and other priorities, lack of access to capital, and slim organization. As regards the driving forces for energy efficiency, the highest ranked driving forces were cost reductions resulting from lower energy use, people with real ambition, long-term energy strategy, the threat of rising energy prices, the electricity certificate system, the PFE. The results show that many of the barriers and driving forces were not solely market-related, e.g., lack of time or other priorities, slim organization, other priorities for capital investments, lack of staff awareness, and long decision chains indicate that firm-specific barriers plays an important role. These barriers may not be overcome by market-related public policy instruments but is rather a consequence of how the energy issue is organized within the firms. The second and the third largest driving forces, people with real ambition and a long-term energy strategy further support this.

An interdisciplinary perspective on industrial energy efficiency

This paper combines engineering and social science approaches to enhance our understanding of industrial energy efficiency and broaden our perspective on policy making in Europe. Sustainable development demands new strategies, solutions, and policy-making approaches. Numerous studies of energy efficiency potential state that cost-effective energy efficiency technologies in industry are not always implemented for various reasons, such as lack of information, procedural impediments, and routines not favoring energy efficiency. Another reason for the efficiency gap is the existence of particular values, unsupportive of energy efficiency, in the dominant networks of a branch of trade. Analysis indicates that different sectors of rather closed communities have established their own tacit knowledge, perceived truths, and routines concerning energy efficiency measures. Actors in different industrial sectors highlight different barriers to energy efficiency and why cost-effective energy efficiency measures are not being implemented. The identified barriers can be problematized in relation to the social context to understand their existence and how to resolve them.     

The Energy Services Company (ESCo) as business model for heat entrepreneurship-A case study of North Karelia,Finland

Energy Services Companies are widely implemented for improving energy efficiency both in the public sector and industry. The model has also been introduced as a business model for biomass-based heat entrepreneurship. However, the residential sector has been problematic with regard to ESCo adoption and constitutes a minor share of ESCo operations. The barriers, both social and economic, are many. This paper focuses on the application of ESCo as a business model for heat entrepreneurship in Finland. First, we present the ESCo model and a review of the main barriers. Second, we present the modelling with aspects of profitability and risk sharing. Third, we demonstrate the operation in the residential sector by using 26 housing associations as a case study. We simulate the energy investment, profitability of operation, and the sharing of risks between the customer and the ESCo. The results indicate that the ESCo model is challenging in our case area. Low profit levels and the assumed customer's preference for achieving cost savings from the beginning of energy renovation can result in long contract periods tying up the capital. The ESCo model is unattractive in the current business climate, requiring modifications or integration with other maintenance services of housing associations.     

Optimization as investment decision support in a Swedish medium-sized iron foundry – A move beyond traditional energy auditing

Due to increased globalisation, industries are facing greater competition that is pressing companies into decreasing their expenses in order to increase their profits. As regards Swedish industry, it has been faced with substantial increases in energy prices in recent years. Barriers to energy efficiency such as imperfect information inhibit investments in energy efficiency measures, energy audits being one means of reducing barriers and overcoming imperfect information. However, an evaluation of such energy audits in Sweden reveals that it is chiefly low-cost measures that are undertaken as a result of an audit. Moreover, these audits often tend to focus on support processes such as ventilation, lighting, air compressors etc., while measures impacting production processes are often not as extensively covered, which underlines the need for further support in addition to energy audits. Decision support is practised in a variety of different disciplines such as optimization and simulation and the aim of this paper is to explore whether investment decision support practices may be used successfully towards small and medium-sized manufacturers in Sweden when complex production-related investment decisions are taken. The optimization results from the different cases, involving a foundry’s investment in a new melting unit, indicate that with no electricity price fluctuations over the day, the investment seems sound as it lowers the overall energy costs. However, with fluctuating electricity prices, there are no large differences in energy costs between the option of retaining the existing five melting furnaces at the foundry and investing in a twin furnace and removing the holding furnaces – which was the initial investment plan for the foundry in the study. It would not have been possible to achieve this outcome without the use of investment decision support such as MIND. One of the main conclusions in this paper is that investment decision support, when strategic investment decisions are to be taken, may be a means of emphasising energy efficiency for energy-intensive SMEs beyond the level of traditional energy auditing.     

Broadening to sustainability the perspective of industrial decision-makers on the energy efficiency measures adoption: some empirical evidence

The industry should take further efforts towards increased energy efficiency, that is a major contributor to improve industrial sustainability performance, by implementing energy efficiency measures (EEMs). However, the rate of adoption of these measures is still quite low. Hitherto, EEMs and barriers to their adoption have been evaluated almost exclusively from the viewpoint of energy efficiency decision-makers, not accounting for the broader sustainability perspective. This work aims at understanding whether an industrial sustainability perspective can better address issues related to EEMs adoption, analyzing the question through different viewpoints and insights offered by industrial decision-makers of different industrial sustainability areas within a firm. By doing this, we aim at offering a contribution in the understanding of the low rate of adoption of EEMs. As case studies, we investigated 12 firms from Northern Italy. In comparison to previous literature, results show that an industrial sustainability perspective can better explain the real decision-making process of adopting an EEM. Indeed, people knowledgeable about different industrial sustainability areas may perceive different barriers about the same EEM. EEMs may be negatively affected by reasons related to other areas of industrial sustainability, while positive reciprocal impacts may exist among areas of industrial sustainability; thus, EEMs may have effects on areas other than energy efficiency, and these effects may be perceived only by such areas. The study concludes with some remarks for policy and industrial decision-makers and advice for further research.     

Barriers to energy efficiency in small industry clusters: Multi-criteria-based prioritization using the analytic hierarchy process

The small scale industry (SSI) is an important component of Indian economy and a majority of SSI units tend to exist in geographical clusters. Energy efficiency is crucial for the survival and growth of energy intensive SSI clusters, not only to improve their competitiveness through cost reduction but also to minimize adverse environmental impacts. However, this is easier said than done due to the presence of a variety of barriers. The identification of relevant barriers and their appropriate prioritization in such clusters is a prerequisite to effectively tackle them. This paper identifies relevant barriers to energy efficiency and their dimensions in SSI clusters. Further, the barriers are prioritized based on the perceptions and experiences of entrepreneurs, the main stakeholders of SSIs, using the analytic hierarchy process (AHP). The field data from two energy intensive clusters of foundry and brick and tile in Karnataka (a state in India) reveal that the prioritization remained the same despite differences in the relative weights of barrier groups. The financial and economic barrier (FEB) and behavioural and personal barrier (BPB) have emerged as the top two impediments to energy efficiency improvements.     

Marketing energy efficiency: perceived benefits and barriers to home energy efficiency

Energy efficiency contributes significantly to the reduction of greenhouse gas emissions and the associated mitigation of climate change. The uptake of energy efficiency measures in the residential sector requires significant effort on the part of homeowners or residents. Past research has revealed that cost savings and social interaction motivate energy efficiency behavior. This study expands on this research by examining the hypothesis that there are regional differences in what motivates individuals to implement home energy efficiency upgrades. Two surveys (N?=?320 and N?=?423) examine the perceived benefits of and barriers to undertaking home energy efficiency improvements in varying geographic regions across the USA and test marketing materials that target these benefits and barriers. The hypothesis that there are regional differences in perceptions of energy efficiency was confirmed. Cost savings were found to be the most important benefit to individuals across the country. Energy efficiency being a good investment is either the second or third most important benefit across all regions. Increased comfort is the last of the top three most important benefits to those in the South and Midwest, while those in the Northeast demonstrated interest in the increase in home retail value associated with energy efficiency, and those in the West found the environmental benefits to be important. High costs of energy efficiency improvements were found to be the most commonly perceived barrier. Reported likelihood to enroll in a home energy efficiency program offered by one’s employer was predicted by perceived likelihood that coworkers would enroll, income level, and personal opinions about the importance of energy efficiency.     

The effect of long lead times for planning of energy efficiency and biorefinery technologies at a pulp mill

The pulp and paper industry has many promising opportunities in the biorefinery field. To reach this potential, investments are required in new, emerging technologies and systems solutions which cannot be quickly implemented. In this paper, an approach to model the necessarily long planning times for this kind of investments is presented. The methodology used is based on stochastic programming, and all investments are optimized under uncertain energy market conditions. The uncertain cost development of the emerging technologies is also considered. It is analyzed using scenario analysis where both the cost levels and the timing for market introduction are considered. The effect of long lead times is studied by assuming that no investments can be decided on now and implemented already today, and only investments planned for today can be implemented in, for example, five years. An example is presented to illustrate the usefulness of the proposed approach. The example includes the possibility of future investment in lignin separation, and shows how the investment planning of industrial energy efficiency investments can be guided by using the proposed systematic approach. The example also illustrates the value of keeping flexibility in the investment planning.     

Planning future investments in emerging energy technologies for pulp mills considering different scenarios for their investment cost development

In this paper, we propose a systematic approach to study how the development in terms of cost and proven functionality of emerging energy technologies affects the optimal choice and timing of investment decisions at an industrial plant today. The methodology used is based on stochastic programming, and all investments are optimized under uncertain energy market conditions. The cost development of the new technology is modeled using scenario analysis where both the cost levels and the timing of the market introduction are considered. Two examples are presented to illustrate the usefulness of the proposed approach. The examples are taken from the pulp and paper industry. In addition to investments in conventional technology for heat and/or power production, the emerging technology of carbon capture is considered as a possible future investment in the first example while lignin separation is considered in the second one. It is shown that possible future technologies can be highly important to consider already in today’s investment decisions.     

Potential impact evaluation: an ex ante evaluation of the Mediterranean buildings energy efficiency strategy

The building sector is among the largest energy users while offering cost-effective means of reducing energy use. Dynamics of energy efficiency improvements in the building stock are very slow due to the long life span of buildings and barriers such as high investment cost. A list of general policy measures to overcome the barriers to energy efficiency improvements in the Mediterranean (MED) area was proposed by regional experts in the framework of the MARIE project. These measures could be considered as a first draft of the MED buildings energy efficiency strategy. This study assesses the potential impacts of such measures, so as to inform on their effectiveness. The MARIE measures result in larger energy savings than an equally ambitious strategy based on ‘conventional measures’. However, the benefits of MARIE arrive slowly and show large variations among regions depending on the characteristics of their current building stock.     

Sustainable development of energy systems for western China

The distribution of energy and industry in China is extremely uneven. The western region is rich in energy resources but relatively economically backward, while the eastern region, particularly, the southeast coastal area, is an industrially-developed area but is short of energy resources. On the basis of such a situation, this paper recommends the sustainable development of energy systems for the western region. The specific innovative energy systems adopted here can convert the western region's fossil fuels to alternative fuels and electricity with higher efficiency, lower investment cost, and less impact upon the environment. As one of such innovative energy systems, the MES (multi-functional energy system) can achieve 10–14% in the energy conservation ratio, 4–8% reduction of investment cost, and a 10–37% decrease of main pollutants. Moreover, its adoption will increase the income and accelerate the development of the energy industry in the western region, as well as meet the energy demand of the eastern region. The analysis in this paper presents a feasible energy road map for the rapid yet sustainable development of China's western region.     

Estimates of the potential for energy conservation in the Chinese steel industry

The study evaluates the energy saving potential of the Chinese steel industry by studying its potential future energy efficiency gap. In order to predict the future energy efficiency gap, a multivariate regression model combined with risk analysis is developed to estimate future energy intensity of China's steel industry. It is found that R&D intensity, energy saving investment, labor productivity and industry concentration are all important variables that affect energy intensity. We assess the possible measures as to how China's steel industry can narrow the energy efficiency gap with Japan by means of scenario analysis. Using Japan's current energy efficiency level as baseline, the energy saving potential of China's steel industry is more than 200 million ton coal equivalent in 2008, and it would fall to zero in 2020. However, if greater efforts were made to conserve energy, it would be possible to narrow down the energy efficiency gap between China and Japan by around 2015. Finally, using the results of the scenario analysis, future policy priorities for energy conservation in China's steel industry are assessed in this paper.     

Energy efficiency policy impact in India: case study of investment in industrial energy efficiency

The objective of this paper is to identify the effectiveness of energy policy and capital investment in energy efficiency technologies in the industrial sector in India. Indian energy policies relating to industrial energy efficiency over the past 25 years are briefly reviewed, and a comparison study of these energy efficiency policies and strategies in India and China has been carried out. Interviews were conducted with a number of government policy-making institutions and a national industrial development bank. The accounts of 26 industrial enterprises which applied and used a loan of the Asian Development Bank were audited for data collection. Field-visits to seven industrial entrepreneurs were undertaken in a case study. Methodologies used in this study include documentation, cross-country reviews on energy policies, questionnaire design and distribution in the industrial sector, and on-site auditing of energy efficiency technologies. This paper concludes that current energy policies and strategies in India need further improvement to promote energy efficiency investment and energy efficiency technology development in the industrial sector. This paper will interest those policy makers and industrial entrepreneurs who are willing to finance energy efficiency projects and improve energy efficiency in the industrial sector.     

Energy policies for increased industrial energy efficiency: Evaluation of a local energy programme for manufacturing SMEs

The most extensive action targeting the adoption of energy efficiency measures in small- and medium-sized manufacturing industries in Sweden over the past 15 years was project Highland. This paper presents an evaluation of the first part of this local industrial energy programme, which shows an adoption rate of more than 40% when both measures that have already been implemented and measures that are planned to be implemented are included. A comparison between this programme and another major ongoing programme for the Swedish energy-intensive industry indicates that the approach used in project Highland aimed at small- and medium-sized industries is an effective way to increase energy efficiency in the Swedish industry. The major barriers to energy efficiency among the firms were related to the low priority of the energy efficiency issue.     

Status and prospects of Chinese wind energy

The Chinese government is paying considerable attention to the utilization of renewable energy, especially wind energy, because of problems such as low per capita energy consumption, heavy environment pollution, low energy efficiency, and small proportion of renewable energy. The utilization of wind energy, whose resources are very abundant in China, is undergoing rapid development; however, there are still a lot of barriers to overcome. Recently, the Chinese government made a series of policies to promote the wind power industry and the construction of wind farms, which accelerated the technology development simultaneously. The study presents a brief introduction to the resource, status and prospect of wind energy in China, which shows that with the support of the government, China will accelerate the cultivation of professionals, increase the investment of scientific research, establish a national public technical service platform to enhance self-innovation capability and to integrate domestic and oversea resources, and finally establish a complete industrial system that involves manufacture, consultation and service.     

Renewable energy investment opportunities in Mauritius—an investor’s perspective

The main purpose of the paper is to explore the renewable energy investment opportunities in Mauritius. Magnum Power, an engineering firm in India promoting renewable energy technologies, conducted a feasibility study to identify the possibilities of investments on various renewable energy projects in Mauritius. The study analysed the Mauritius energy scenario, the earlier and recent renewable energy projects, the current status of such projects, the barriers for renewable energy developments, and the suitable renewable energy technology for fruitful investment. Based on the study outcome, an investment proposal for a 10 MW wind farm project is presented, which would be a useful guideline for investors looking for investment opportunities in Mauritius.