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Suggested Citation:"2 Program-Level Evaluations." National Research Council. 2005. Decreasing Energy Intensity in Manufacturing: Assessing the Strategies and Future Directions of the Industrial Technologies Program. Washington, DC: The National Academies Press. doi: 10.17226/11243.
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2
Program-Level Evaluations

The committee was asked to assess several program-level aspects of the Industrial Technologies Program (ITP), including the following:

  • Strategic Plan: Is it appropriate? Does it have reasonable and achievable goals? Does it reflect the needs of the Department of Energy (DOE) and the broader U.S. industrial community?

  • Multi-Year Program Plan (MYPP): How good is the decision-making process used by the ITP to determine research directions? What is the prospective value of the program? What is the likelihood of its achieving its goals? How well is it connected to users, including non-ITP researchers? Is there a capacity to develop lessons learned for future interdisciplinary research activities?

  • Corporate strategy or management plan: Is there a good plan in place to carry out the program?

This chapter contains the committee’s assessment of the ITP Strategic Plan, the ITP program plan as contained in the MYPP, the ITP corporate strategy or management plan, and the appropriateness of all of these activities with respect to the strategic plans of the ITP, the Office of Energy Efficiency and Renewable Energy (EERE), and the DOE, and with respect to the National Energy Policy.

THE ENERGY POLICY CONTEXT

National Energy Policy

The National Energy Policy (NEP) released on May 16, 2001, is the final report of the National Energy Policy Development Group (NEPDG, 2001). The report describes five goals for the current presidential administration: modernize energy conservation, modernize the energy infrastructure, increase energy supplies, accelerate the protection of the environment, and increase the nation’s energy security.

The NEP states that the best way to meet the goal of modernizing energy conservation is “to increase energy efficiency by applying new technology—raising productivity, reducing waste, and trimming costs” (NEPDG, 2001, p. xi). Recommendations for modernizing energy conservation include increasing the funding for renewable energy and energy efficiency research and development (R&D) programs that are performance-based and cost-shared, and providing a tax incentive and streamlining permitting to accelerate the development of combined heat and power technology (NEPDG, 2001, p. xi). With regard to the goal of accelerating the protection and improvement of the environment, the NEP recommends further promoting improvements in the productive and efficient use of energy by enacting

Suggested Citation:"2 Program-Level Evaluations." National Research Council. 2005. Decreasing Energy Intensity in Manufacturing: Assessing the Strategies and Future Directions of the Industrial Technologies Program. Washington, DC: The National Academies Press. doi: 10.17226/11243.
×

multipollutant legislation that would establish a flexible, market-based program to significantly reduce and cap emissions of sulfur dioxide, nitrogen oxides, and mercury from electric power generators and increase exports of environmentally friendly, market-ready U.S. technologies that generate a clean environment and increase energy efficiency (NEPDG, 2001, p. xiv).

The National Energy Policy Development Group also recommended the establishment of a national priority for improving energy efficiency. The priority would be to decrease the energy intensity of the U.S. economy as measured by the amount of energy required for each dollar of economic productivity. According to the report, this increased energy efficiency should be pursued through the combined efforts of industry, consumers, and federal, state, and local governments (NEPDG, 2001).

Strategic Plan of the Department of Energy

The overarching mission of the Department of Energy is to advance the national, economic, and energy security of the United States; to promote scientific and technological innovation in support of that mission; and to ensure the environmental cleanup of the national nuclear weapons complex (DOE, 2003a). The DOE has four strategic goals: to protect national security by applying advanced science and nuclear technology to the nation’s defense; to protect national and economic security by promoting a diverse supply and delivery of reliable, affordable, and environmentally sound energy; to protect national and economic security by providing world-class scientific research capacity and advancing scientific knowledge; and to protect the environment by providing responsible resolution to the environmental legacy of the Cold War and by providing for the permanent disposal of the nation’s high-level radioactive waste.

A general goal of the DOE is to improve energy security by developing technologies that foster a diverse supply of reliable, affordable, and environmentally sound energy by providing for the reliable delivery of energy, guarding against energy emergencies, exploring advanced technologies that make a fundamental improvement in the mix of energy options, and improving energy efficiency. One strategy for achieving this goal is to partner with the private sector, states and communities, national laboratories, colleges and universities, nongovernmental organizations, foreign allies, the U.S. Congress, and other federal agencies in order to develop and bring to market technologies that advance energy efficiency.

Another general goal of the DOE is to provide world-class scientific research capacity needed to ensure the success of DOE missions in national and energy security; advance the frontiers of knowledge in physical sciences and areas of biological, medical, environmental, and computational sciences; and provide world-class research facilities for the U.S. science enterprise. The DOE promotes the transfer of the results of its basic research to a broad set of technologies, such as for advanced materials, national defense, medicine, space science and exploration, and industrial processes.

Strategic Plan of the Office of Energy Efficiency and Renewable Energy

DOE Secretary Spencer Abraham challenged the Office of Energy Efficiency and Renewable Energy to revolutionize the way in which it approaches energy efficiency and renewable energy technologies, while pursuing the recommendations of the National Energy Policy. To meet this challenge, EERE officials indicate that the EERE intends to leapfrog the status quo and pursue dramatic energy and environmental benefits.

The mission of the EERE is to strengthen U.S. energy security, environmental quality, and economic vitality in public-private partnerships that enhance energy efficiency and productivity; bring clean, reliable, and affordable energy technologies to the marketplace; and make a difference in the everyday lives of Americans by enhancing their energy choices and quality of life.

The EERE has nine strategic goals: (1) dramatically reduce, or even end, dependence on foreign oil; (2) reduce the burden of energy prices on the disadvantaged; (3) increase the viability and deployment of renewable energy technologies; (4) increase the reliability and efficiency of electricity generation, delivery, and use; (5) increase the energy efficiency of buildings and appliances; (6) increase the energy efficiency

Suggested Citation:"2 Program-Level Evaluations." National Research Council. 2005. Decreasing Energy Intensity in Manufacturing: Assessing the Strategies and Future Directions of the Industrial Technologies Program. Washington, DC: The National Academies Press. doi: 10.17226/11243.
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of industry; (7) spur the creation of a domestic bioindustry; (8) lead by example through government’s own actions; and (9) change the way that the EERE does business (DOE, 2002).

STRATEGIC PLAN OF THE INDUSTRIAL TECHNOLOGIES PROGRAM

The ITP Strategic Plan describes the program’s mission and vision and outlines a long-term strategy for achieving improvements in the energy and environmental performance of energy-intensive industries (DOE, 2003c). It is intended that this plan provide the strategic link between the policies and priorities described in the National Energy Policy and the detailed plans outlined in the ITP Multi-Year Program Plan. The Strategic Plan is intended to build on DOE and EERE strategic plans and to provide specific strategies for achieving DOE and EERE goals.

Mission and Vision

As stated in Chapter 1, the mission of the ITP is to decrease the energy intensity of the U.S. industrial sector through a coordinated program of research and development, validation, and dissemination of energy efficiency technologies and operating practices. As part of its mission, the ITP partners with industry, its equipment manufacturers, and its many stakeholders to reduce U.S. reliance on foreign energy sources, reduce environmental impacts of U.S. industry, increase the use of renewable energy sources, improve the competitiveness of U.S. industry, and improve the quality of life for U.S. workers, families, and communities (DOE, 2003c, p. 2).

The vision of the ITP is to strive for a world in which U.S. goods are recognized for their extraordinary quality, are produced with minimal energy and environmental impact, are designed for durability and recyclability, and are manufactured with modern technology and practices to ensure continued U.S. economic vitality and energy security (DOE, 2003c, p. 2).

The goals of the ITP’s Strategic Plan address two areas: reduction in energy intensity and commercialization of energy efficiency technologies. Quantitative goals have been set: a 25 percent decrease in energy intensity1 by the energy-intensive Industries of the Future (IOFs) between 2002 and 2020 and the commercialization of more than 10 industrial energy efficiency technologies between 2003 and 2010.2 The six key ITP strategies for achieving these goals are:

  • To focus on energy-intensive industries,

  • To use public-private partnerships to plan and implement the program,

  • To identify grand challenges that would dramatically improve industrial energy efficiency,

  • To implement a technology portfolio that is balanced in terms of near-, mid-, and far-term research,

  • To perform process-specific and crosscutting research and development (R&D) to improve long-term energy efficiency, and

  • To perform technology delivery activities to improve near- and mid-term energy efficiency (DOE, 2003c, pp. 8–12).

Conclusions and Recommendations for the Strategic Plan

The committee finds that the ITP Strategic Plan presents a coherent link between the higher-level plans described above and the ITP’s Multi-Year Program Plan (DOE, 2004a). The strategies outlined are consistent with the mission of the ITP and address the needs of the DOE and U.S. industry for decreased energy intensity and improved environmental protection. The Strategic Plan is aimed at meeting the

1  

Energy intensity is defined in the ITP Strategic Plan as energy consumed in British thermal units (Btu) per unit of industrial output (in U.S. dollars of gross domestic product) as compared with Btu per unit of industrial output in 2002 (DOE, 2003c, p. 2).

2  

B.Garland, DOE, 2004, “Industrial Technologies Program Corporate Programmatic Review,” Presentation to the Committee, Washington, D.C., May 19.

Suggested Citation:"2 Program-Level Evaluations." National Research Council. 2005. Decreasing Energy Intensity in Manufacturing: Assessing the Strategies and Future Directions of the Industrial Technologies Program. Washington, DC: The National Academies Press. doi: 10.17226/11243.
×

needs of the energy-intensive IOFs that are characterized by low R&D as a percentage of sales and that face strong foreign competition.

The ITP’s Strategic Plan provides no explanation of the basis for the selection of its specific quantitative goals; nor is it clear how achievement of these goals will be measured. For example, the plan lacks a definition of “commercialized technology.” It is unclear whether this term refers to a technology that is available for commercial sale, a technology in use in demonstration facilities, or one widely employed in industry. The energy savings would differ greatly in each case. The committee recommends that the ITP provide additional description of how these goals were selected and how their achievement will be measured.

The committee finds that, owing to the unclear basis for the stated goals in the ITP’s Strategic Plan, it is difficult to assess the likelihood that the program will achieve these goals. A 25 percent decrease in energy intensity would appear to be an aggressive goal. On the other hand, the achievement of commercializing more than 10 industrial energy efficiency technologies would appear to be quite low considering the 160 such technologies commercialized by the program between 1980 and the present (DOE, 2003c, p. 16). The committee notes that this low figure may be related to the increased focus on grand challenges and suggests that the ITP provide additional description of the reasons for setting this target.

MULTI-YEAR PROGRAM PLAN OF THE INDUSTRIAL TECHNOLOGIES PROGRAM

Starting in fiscal year (FY) 2003, EERE leadership committed to providing multi-year program plans. The development of the ITP Multi-Year Program Plan coincided with the reorganization of the ITP to provide a more focused portfolio of R&D. The MYPP is a document that results from the ITP Strategic Plan and fits within the other planning documents described above. The MYPP development process is intended to translate the ITP’s strategies and strategic objectives into specific technical, funding, and schedule requirements that meet all EERE expectations and requirements, including all metrics for effective performance evaluation. The MYPP includes information on planning interrelationships; the current federal, business, industry, and technology environments; and technical goals and how they are derived. In addition, it contains a description of the implementation strategy, including the corporate strategy and multi-year plans for the individual subprograms (DOE, 2004a).

The MYPP is used to guide the allocation of resources and to identify the technology focus areas that are important to achieving the goals of the ITP. At both the corporate and industry levels, the MYPP identifies key technical focus areas, explains the primary technical barriers faced in accomplishing the objectives, lays out pathways for achieving the goals set for each focus area, and defines metrics to help evaluate and adjust the pathways. The MYPP is designed to undergo periodic review and updates, with the overall plan being reviewed annually and each technology planning element performing a quarterly update and review.

Conclusions and Recommendations for the Multi-Year Program Plan

The ITP Multi-Year Program Plan that supports the ITP Strategic Plan is clearly evolving both as a document and as an approach. A “grand challenge” is defined in the MYPP as “an important technical problem facing an industry, or group of industries, that, if solved, holds the potential to produce large improvements in energy efficiency, environmental performance, and product yield” (DOE, 2004a, p. 65). The MYPP currently lists three grand challenge projects in three different Industries of the Future. These three, along with prospective future grand challenges, are combined with a larger set of projects labeled Intermediate Term Technology Developments (major program activities that are not grand challenges) to form a list of corporate milestones, numbering more than 100 in the FY 2005 to FY 2009 time frame. A subset of 18 of these corporate milestones has been identified as having highest priority, although the specific criteria for such prioritization are not noted.

The committee recommends the continuation and an acceleration of the evolution of the ITP’s Multi-Year Program Plan toward a more manageable set of corporate milestones that enable more effective

Suggested Citation:"2 Program-Level Evaluations." National Research Council. 2005. Decreasing Energy Intensity in Manufacturing: Assessing the Strategies and Future Directions of the Industrial Technologies Program. Washington, DC: The National Academies Press. doi: 10.17226/11243.
×

corporate management. There is no apparent coordination across subprograms on milestones that have potential common elements and that could therefore experience synergy through cooperation. The committee recommends that in preparing future Multi-Year Program Plans, the Industrial Technologies Program look for opportunities to coordinate between subprograms, especially in the area of grand challenges. This is especially important for sharing lessons learned, as well as best practices, across industries and ITP subprograms.

CORPORATE STRATEGY OF THE INDUSTRIAL TECHNOLOGIES PROGRAM

The ITP corporate strategy, described in the MYPP, is an effort to streamline business and management processes within the ITP. It consists of five components: (1) realizing a vision for the future of industry; (2) strategy for government investment; (3) understanding and awareness; (4) long-term, focused partnerships; and (5) superior business practices (DOE, 2004a, p. 46). The overall approach is to align the ITP strategic goal of a 25 percent decrease in energy intensity by the IOFs with corporate goals related to increasing productivity, energy efficiency, resource conservation, environmental stewardship, and economic growth.

Realizing a Vision for the Future of Industry

The process of creating vision documents in conjunction with the Industries of the Future was developed to identify the need for industrial energy savings, to implement an iterative planning process, and to assess the success of the planning. Barriers to identifying industry needs and roles include the following: short-term, conflicting, and uncertain industrial needs; an unclear, conflicting, and uncertain strategic direction on the part of government; and the lack of a unified voice in government regarding industrial issues. Barriers to the implementation of an iterative planning process include these: difficulty in effectively using the mass of information available for strategic decision making; an insufficient understanding of industrial business and its technical environment; a constantly changing planning environment; and the insufficient engagement of industrial partners. Barriers to the assessment of planning success include insufficient and uncoordinated metrics, an unclear relationship of metrics to strategic planning, the disconnection of metrics from planning feedback, and the lack of understanding of metrics by either government or industry.

The explicit awareness in the ITP of all of these barriers to the achievement of each individual Industry of the Future vision leads to specific pathways for overcoming the barriers and identifying opportunities for success. Each pathway typically involves the use of industry-developed roadmaps, the collection of documents and data, the harnessing of ITP and industry expertise, and the use of footprint, bandwidth, and other energy and environmental profiling tools. The ITP has concluded that realization of its vision requires an understanding of the realities of both industry and government and an iterative planning process driven by measurable results. The committee finds that this conclusion is appropriate.

Strategy for Government Investment

The strategy for the government investment component of the ITP corporate strategy involves five aspects: (1) prioritization of project opportunities, (2) maintenance of a robust project portfolio, (3) synergy with other programs in the DOE Office of Energy Efficiency and Renewable Energy, (4) support of the 21st century workforce; and (5) the existence of alternative government interventions.3 Project opportunities are generated and prioritized through program goal setting and technology planning and through the solicitation, selection, execution, and assessment and evaluation of projects. These steps are supported by the new decision-making approach; energy (and sometimes exergy) footprint, bandwidth, and opportunity analyses; expert peer reviews; metrics required by the Government Performance and Results Act of 1993 (GPRA); milestone tracking; portfolio peer review; and follow-up studies. The

3  

S.Dillich, DOE, 2004, “Strategy for Government Investment,” Presentation to the Committee, Washington, D.C., May 19.

Suggested Citation:"2 Program-Level Evaluations." National Research Council. 2005. Decreasing Energy Intensity in Manufacturing: Assessing the Strategies and Future Directions of the Industrial Technologies Program. Washington, DC: The National Academies Press. doi: 10.17226/11243.
×

committee finds that these tools and processes are appropriate for guiding the prioritization and selection of projects.

Occasionally, grand challenges are developed to focus on technically complex issues that have lacked previous solution and which are likely to involve high-risk, high-return R&D requiring public-private partnerships. The committee suggests that grand challenges should also be fully justified from a market perspective. In fact, the committee recommends that market pricing, acceptance, and the potential economic impact of all projects be estimated. Energy-saving metrics for project selection and management are appropriate, but they would be more effective if they were augmented by an estimate of the acceptance and impact of the project technology in the marketplace.

The project portfolio consists of projects representing a range of technical and market risk, a range of relative energy benefits per investment, and a range of investments. Some projects are relatively small, involving best-practice technology delivery; others are larger, involving yield improvement; still larger projects involve process improvement; and perhaps the largest are the grand challenges. Project portfolio management involves reviewing the mix of projects by these classifications. Also, the estimated cumulative GPRA energy savings metrics for 2020 are plotted against the cumulative budget so that projects with a relatively greater ratio of energy savings per unit of budget might be considered for acceleration, while those with a lower ratio might be considered for redirection, examined for cost-sharing, or reevaluated for strategic importance. In the future, additional methodologies, software, and scenario analyses within the context of various economic, social, and technical environments will be used in order to maintain a robust project portfolio. The committee notes that there is a wide variety of management science decision tools that can be applied specifically to portfolio analysis, including such analytical tools as data envelope analysis and analytical hierarchical process.

The EERE involves a broad range of energy-related sectors, including, for example, biomass, hydrogen, fuel cells, FreedomCAR, buildings, combined heat and power technologies, solar, geothermal, hydropower, and wind. The ITP Industries of the Future and project portfolio cross almost all of these sectors and contribute to many of the Small Business Innovation Research (SBIR) programs across the EERE.

ITP support of the 21st century workforce (to help alleviate a perceived shortage in technically qualified manufacturing workers) involves making available best energy practice tools and training for manufacturing workers, training students at 26 universities to conduct manufacturing plant audits and to increase workers’ energy knowledge, and participating in educational partnerships with community colleges. The committee notes that no evidence was presented that any of these efforts have been particularly effective at addressing specific 21st century workforce issues. Compared with other components of the ITP government investment strategy, the committee observes that attention to education issues appears weak, isolated, and probably misplaced. A better approach might be to hand off this aspect of its efforts to the Department of Education, the Department of Labor, or the National Science Foundation, all of which have major educational missions.

With respect to alternative government interventions to assist industry in improving energy efficiency, the ITP participates on the industrial Energy Savers Web site and has been involved with state showcases of industrial energy efficiency technologies, the Climate VISION (Voluntary Innovative Sector Initiatives: Opportunities Now) strategic thrusts for near-term reductions of greenhouse gas emissions, and partnerships with the National Institute of Standards and Technology, U.S. Environmental Protection Agency, National Science Foundation, U.S. Department of Defense, and other relevant agencies. The committee finds that all of these activities are appropriate to enhancing the effectiveness of the ITP government investment.

Understanding and Awareness

The understanding and awareness component of the ITP corporate strategy involves government, industry, and the general public. This strategic component is based on the following assumptions: that the government lacks consensus on the extent of opportunities for industrial energy efficiency; that there is

Suggested Citation:"2 Program-Level Evaluations." National Research Council. 2005. Decreasing Energy Intensity in Manufacturing: Assessing the Strategies and Future Directions of the Industrial Technologies Program. Washington, DC: The National Academies Press. doi: 10.17226/11243.
×

sometimes a lack of understanding in government about industrial priorities and drivers and the relationship between energy efficiency and economic and environmental factors; that industry is often unaware of the resources available through the ITP and of opportunities for energy savings; and that the general public often does not understand the relationship between industrial energy efficiency and public benefits.4

For each of these sectors, barriers to understanding were identified and, following the visioning processes, specific pathways to overcoming these barriers were developed. Examples of strategic pathways to promote understanding include the following: establishing the DOE as the authoritative government source for industrial energy issues; developing public-private partnerships, visions, and roadmaps; providing explanatory materials regarding the relationship of energy efficiency to economic productivity, job creation, greenhouse gas reduction, and environmental performance; maintaining informative Web sites; holding showcases, energy events, and awareness workshops; publishing case studies; developing software tools, training curricula, and qualified specialists; conducting industrial energy assessments; promoting corporate energy management; and participating in Climate VISION. The committee finds that these are appropriate pathways to overcoming the various barriers to understanding and awareness, although the committee recommends that, to the extent possible, each be measured and monitored to assure effectiveness.

Long-Term, Focused Partnerships

A key component of the ITP corporate strategy is the use of public-private partnerships to plan and implement the program. The justification is threefold: (1) to bring together the strengths of business and government to solve increasingly complex and difficult energy problems; (2) to partner with industry in technology planning, collaborative R&D, and energy technology implementation; and (3) to reduce the technical and financial risk of projects in order to stimulate private investment and the development of energy-saving technology. The mechanism for carrying out this strategy has been the collaborative public-private Industries of the Future partnerships, each with a vision of industry goals, a roadmap of industry technology priorities, and a partnership plan for collaborative R&D and technology implementation. Numerous industry visions and technology roadmaps have been developed, and showcases have been held. Several hundred individual projects are underway, related to specific energy-intensive sectors, to crosscutting technologies, to grand challenges, to the development of tools and training, to energy assessments, and to demonstrations.

Barriers to long-term public-private partnerships include the difficulty in changing industry performance without adequate resources, insufficient leveraging of partnerships, the lack of understanding and awareness of how energy efficiency can improve profitability and societal benefit, concerns about partnering with government, and the lack of unified objectives and priority setting within the government. Again, pathways have been identified to address each of these barriers. They include a focus on collaborative R&D; a focus on grand challenges; the use of allied partners, such as trade and technical associations, end users, and equipment suppliers, to act as delivery channels for ITP technologies and practices; leveraged resources with other government programs, such as Innovative Energy Systems Technology for the Chemicals Industry, Climate VISION, and the National Nanotechnology Initiative; and an expanded role for the EERE regional offices to provide project management, training and technical assistance, and technology deployment. The committee finds that maintaining public-private partnerships, including academic partnerships, outside of specific industries is critical to the success of the ITP.

Superior Business Practices

Key features of the ITP include a major emphasis on partnerships; strong attention to planning, analysis, and metrics; and a balanced portfolio of projects. The business practices component of the ITP

4  

P.Salmon-Cox, DOE, 2004, “Understanding and Awareness,” Presentation to the Committee, Washington, D.C., May 19.

Suggested Citation:"2 Program-Level Evaluations." National Research Council. 2005. Decreasing Energy Intensity in Manufacturing: Assessing the Strategies and Future Directions of the Industrial Technologies Program. Washington, DC: The National Academies Press. doi: 10.17226/11243.
×

corporate strategy involves strategic, multiyear, and annual operating plans; footprint and bandwidth analytical studies; project reports; GPRA and Program Assessment Rating Tool (PART) energy, environmental, and financial metrics and impacts tracking; and headquarters and field information management systems. The committee notes that there appears to be considerable focus on systematic and aligned planning, analysis, decision-making, and project management processes. The data are beginning to show significant cumulative energy and cost savings.

The way that the ITP program is managed has changed as a result of the EERE and ITP reorganizations. ITP program managers stated in their presentations to the committee that the ITP is organizationally now more science-and-technology-based than industry-based; that the portfolio is managed by analysis rather than by the industry roadmaps alone; that there are fewer but larger projects; that there are strategic, multiyear, and annual operating plans with milestones rather than industry roadmap plans alone; that project management has been moved from headquarters to the field offices; that the regional offices will now be involved in outreach; that there is more coordination and collaboration with other EERE efforts; that travel will be used to accomplish the mission rather than just to attend events; and that the staff has been reduced by more than half. The committee observes that a high energy level and momentum exist within the ITP staff for implementing these changes and improving the ITP. The committee notes that it appears as if most of the program management changes (with the possible exception of travel restrictions) should enhance the ITP’s transparency and effectiveness. However, again to the extent possible, the committee recommends that these new management practices be carefully measured and monitored to assure continual improvement in fact.

Additional Challenges and Opportunities

Four additional challenges and opportunities (in addition to the 21st century workforce issue discussed previously) were identified by the ITP as having a potential influence on the relationship between industry and the Industrial Technologies Program and the robustness of the ITP strategy. These were (1) positive impact manufacturing, (2) multiscenario planning analysis, (3) environmental regulation and its impact on investment, and (4) industrial financing of energy efficiency investments.

Positive impact manufacturing goals include U.S. leadership in manufacturing technology, a positive public image of manufacturing, and the recognition among the public and policy makers that manufacturing can meet societal goals. Elements affected by positive impact manufacturing include economic security, education, technology growth, resource conservation, energy, and the environment. The current manufacturing situation was described by the ITP program managers in their presentations to the committee as being characterized by high foreign competition, high capital equipment costs, low access to cash, high technology risk, low stock turnover, low R&D investment, environmental externalities with an uncertain future, high natural gas prices, climate change, antiglobalization, inflation, substitute materials, and war. Barriers to achieving positive impact manufacturing were taken from previously identified barriers in other parts of the ITP management plan—the barriers include environmental regulations, technical and investment risk inhibiting the deployment of energy-efficient industrial technology, and a scarcity of technically skilled production workers—as were previously identified pathways to address these barriers. ITP program managers suggested that scenario planning would be an appropriate technique to address a changing manufacturing situation.

The previous ITP Strategic Plan was based on one business-as-usual scenario and contained a portfolio of strategies and projects geared to that scenario. The ITP now recognizes that multiscenario planning can enhance the understanding of important uncertainties, integrate alternative perspectives into planning, and result in greater resilience of planning decisions in the face of surprises. To this end, the ITP is now evaluating whether the overall goal (25 percent reduction in energy intensity in energy-intensive industries) is feasible under any potential scenario and whether this goal could be more aggressive. The ITP has also identified factors that could affect the achievement of this goal, including a lack of qualified technical employees, a lack of awareness of energy-saving opportunities, narrow profit margins, high investment costs, and increased foreign competition. The remaining steps of the

Suggested Citation:"2 Program-Level Evaluations." National Research Council. 2005. Decreasing Energy Intensity in Manufacturing: Assessing the Strategies and Future Directions of the Industrial Technologies Program. Washington, DC: The National Academies Press. doi: 10.17226/11243.
×

multiscenario exercise (rank driving forces by importance and uncertainty, cluster uncertainties into affinity groups and select axes of uncertainty, characterize driving forces under different uncertainty extremes, write scenarios, exercise scenarios, establish monitoring and trend analyses) will be completed and incorporated into the next revision of the ITP Strategic Plan.

Environmental regulations impact manufacturing operations both technically and financially, as compliance represents a significant fraction of both capital spending and operating costs. Many of the IOF visions and roadmaps contain environmental as well as energy-related goals. ITP objectives include the development and promotion of energy technologies and practices that also promote resource conservation, minimize environmental impact, and promote energy and environmental sustainability, and many environmental drivers are incorporated into ITP planning. Many technologies under development within the ITP simultaneously decrease both energy intensity and environmental impact. The ITP plans to continue communication and collaboration with the Environmental Protection Agency (EPA) on environmental issues affecting manufacturing; to have EPA participation in ITP planning, project solicitation, and merit reviews; and to quantify environmental and other societal benefits of ITP technologies.

Industrial market acceptance of energy-saving technologies depends on the reduction of risk and uncertainty associated with implementing new projects. This reduction in risk is in part provided by demonstrations and other sources of technical and economic performance data. Project R&D, training, the development of decision tools, fact sheets, and case studies are now being funded. The ITP recognizes that additional engineering verification data, additional training, and more robust communication of technology benefits will be critical to market acceptance and industrial financing of energy efficiency investments. The committee notes that this is important for the market acceptance of mature energy-saving technologies and, even more so, for novel technologies developed under this program. The committee believes—and emphasizes—that the market success of mature projects must be measured in order to provide feedback for new project selection, and that the projected market acceptance of proposed projects must be properly evaluated and included in project selection and project portfolio management.

Suggested Citation:"2 Program-Level Evaluations." National Research Council. 2005. Decreasing Energy Intensity in Manufacturing: Assessing the Strategies and Future Directions of the Industrial Technologies Program. Washington, DC: The National Academies Press. doi: 10.17226/11243.
×
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Suggested Citation:"2 Program-Level Evaluations." National Research Council. 2005. Decreasing Energy Intensity in Manufacturing: Assessing the Strategies and Future Directions of the Industrial Technologies Program. Washington, DC: The National Academies Press. doi: 10.17226/11243.
×
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Suggested Citation:"2 Program-Level Evaluations." National Research Council. 2005. Decreasing Energy Intensity in Manufacturing: Assessing the Strategies and Future Directions of the Industrial Technologies Program. Washington, DC: The National Academies Press. doi: 10.17226/11243.
×
Page 19
Suggested Citation:"2 Program-Level Evaluations." National Research Council. 2005. Decreasing Energy Intensity in Manufacturing: Assessing the Strategies and Future Directions of the Industrial Technologies Program. Washington, DC: The National Academies Press. doi: 10.17226/11243.
×
Page 20
Suggested Citation:"2 Program-Level Evaluations." National Research Council. 2005. Decreasing Energy Intensity in Manufacturing: Assessing the Strategies and Future Directions of the Industrial Technologies Program. Washington, DC: The National Academies Press. doi: 10.17226/11243.
×
Page 21
Suggested Citation:"2 Program-Level Evaluations." National Research Council. 2005. Decreasing Energy Intensity in Manufacturing: Assessing the Strategies and Future Directions of the Industrial Technologies Program. Washington, DC: The National Academies Press. doi: 10.17226/11243.
×
Page 22
Suggested Citation:"2 Program-Level Evaluations." National Research Council. 2005. Decreasing Energy Intensity in Manufacturing: Assessing the Strategies and Future Directions of the Industrial Technologies Program. Washington, DC: The National Academies Press. doi: 10.17226/11243.
×
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Suggested Citation:"2 Program-Level Evaluations." National Research Council. 2005. Decreasing Energy Intensity in Manufacturing: Assessing the Strategies and Future Directions of the Industrial Technologies Program. Washington, DC: The National Academies Press. doi: 10.17226/11243.
×
Page 24
Suggested Citation:"2 Program-Level Evaluations." National Research Council. 2005. Decreasing Energy Intensity in Manufacturing: Assessing the Strategies and Future Directions of the Industrial Technologies Program. Washington, DC: The National Academies Press. doi: 10.17226/11243.
×
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The U.S. Department of Energy (DOE) has supported the Industrial Technologies Program (ITP) for more than a decade. This program supports R&D into energy efficiency technologies designed to decrease the energy intensity of the U.S. industrial sector. The focus in on seven energy-intensive industries—aluminum, chemicals, forest products, glass, metal casting, mining, and steel—known as the Industries of the Future (IOF). DOE asked the NRC for a review of this program including an evaluation of the ITP strategic plan, an evaluation of the technical quality of individual subprogram plans, and the prospective value of the multi-year program plan. This report presents the results of that review. It contains an assessment of the ITP strategy, of how effective it is being implemented, and the likelihood of achieving program goals. It also provides conclusions about the quality of the subprograms and recommendations about how to strengthen the subprograms and the overall program.

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