5
Conclusions and Recommendations

The Industrial Technologies Program (ITP), an activity of the Department of Energy’s (DOE’s) Office of Energy Efficiency and Renewable Energy (EERE), has evolved over time into a well-managed and effective program. The ITP approach to project selection—that of identifying focus areas, barriers, and pathways—is solidly based, using a variety of sources, including industry roadmaps, footprint and bandwidth analyses, energy and environmental profiles, and other documents and data, together with ITP and industry expertise. A highly detailed Multi-Year Program Plan (DOE, 2004a) is in place, and annual reports are issued on the overall program and on the subprograms.

The program significantly leverages its resources through a large and growing number of partnerships with industry, industry associations, and academic organizations. To help transfer energy-saving technologies, numerous documents are published on energy best practices and energy-saving tips. Regional energy showcases are held periodically to highlight energy conservation technologies, including ITP investments in demonstration projects. The scope and depth of analysis and reporting are impressive.

The ITP has two overall goals: the achievement of a 25 percent decrease in energy intensity for the energy-intensive Industries of the Future (IOFs) between 2002 and 2020 and the commercialization of more than 10 energy efficiency technologies between 2003 and 2010. The program is on track to achieve its goals and has an opportunity to exceed them if it continues to focus on improving performance. Current ITP leadership is strong, and the enthusiasm, dedication, and knowledge of subprogram managers are noteworthy.

In the spirit of continuing to improve an already excellent program, the committee offers the following recommendations.

Recommendation 1. Explore new ways to benefit industries other than those directly targeted through Industrial Technologies Program (ITP) partnerships.

Several additional industries, including the petroleum-refining, food-processing, and concrete industries, could benefit from energy-saving technologies. The opportunities for reducing energy intensity in these other industries are too large to ignore. For example, as noted in the Multi-Year Program Plan, petroleum refining accounts for 17 percent of the energy consumed by industry (DOE, 2004a, p. 33).

While the committee encourages finding ways to include additional industries in the ITP, it is important that this not be accomplished at the expense of other subprogram areas. Disagreements with current industry partners over funding could prove disruptive to the ITP and a distraction for the staff. Possible ways to include other industries without cutting existing industry subprograms include emphasizing applications of crosscutting technologies (e.g., sensors and automation, and combustion),



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Decreasing Energy Intensity in Manufacturing: Assessing the Strategies and Future Directions of the Industrial Technologies Program 5 Conclusions and Recommendations The Industrial Technologies Program (ITP), an activity of the Department of Energy’s (DOE’s) Office of Energy Efficiency and Renewable Energy (EERE), has evolved over time into a well-managed and effective program. The ITP approach to project selection—that of identifying focus areas, barriers, and pathways—is solidly based, using a variety of sources, including industry roadmaps, footprint and bandwidth analyses, energy and environmental profiles, and other documents and data, together with ITP and industry expertise. A highly detailed Multi-Year Program Plan (DOE, 2004a) is in place, and annual reports are issued on the overall program and on the subprograms. The program significantly leverages its resources through a large and growing number of partnerships with industry, industry associations, and academic organizations. To help transfer energy-saving technologies, numerous documents are published on energy best practices and energy-saving tips. Regional energy showcases are held periodically to highlight energy conservation technologies, including ITP investments in demonstration projects. The scope and depth of analysis and reporting are impressive. The ITP has two overall goals: the achievement of a 25 percent decrease in energy intensity for the energy-intensive Industries of the Future (IOFs) between 2002 and 2020 and the commercialization of more than 10 energy efficiency technologies between 2003 and 2010. The program is on track to achieve its goals and has an opportunity to exceed them if it continues to focus on improving performance. Current ITP leadership is strong, and the enthusiasm, dedication, and knowledge of subprogram managers are noteworthy. In the spirit of continuing to improve an already excellent program, the committee offers the following recommendations. Recommendation 1. Explore new ways to benefit industries other than those directly targeted through Industrial Technologies Program (ITP) partnerships. Several additional industries, including the petroleum-refining, food-processing, and concrete industries, could benefit from energy-saving technologies. The opportunities for reducing energy intensity in these other industries are too large to ignore. For example, as noted in the Multi-Year Program Plan, petroleum refining accounts for 17 percent of the energy consumed by industry (DOE, 2004a, p. 33). While the committee encourages finding ways to include additional industries in the ITP, it is important that this not be accomplished at the expense of other subprogram areas. Disagreements with current industry partners over funding could prove disruptive to the ITP and a distraction for the staff. Possible ways to include other industries without cutting existing industry subprograms include emphasizing applications of crosscutting technologies (e.g., sensors and automation, and combustion),

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Decreasing Energy Intensity in Manufacturing: Assessing the Strategies and Future Directions of the Industrial Technologies Program using funds available from the elimination of peripheral education activities, or seeking new funding for grand challenges. However, the ITP may not have to start from scratch with each additional industry. Program managers should increase efforts to promote and disseminate the ITP’s accomplishments and broaden its benefits to additional energy-intensive industrial locations by: Increasing face-to-face contact of ITP subprogram staff with technology developers, equipment manufacturers, system designers, and technology end users by encouraging appropriate travel for headquarters personnel and mandating their attendance at technical meetings, at visits to project sites, and at potential end-user locations; Allocating additional resources to the regional offices (ROs) of the Office of Energy Efficiency and Renewable Energy and refocusing the efforts of RO personnel in order to integrate them more effectively into ITP project activities and directing them to work closely with headquarters staff and industry partners to extend the impact of ITP projects to additional industrial sites; and Remodeling the ITP Web site to make information more easily accessible to all levels of industry management and to emphasize the cost benefits of energy conservation technology. Finding ways to increase the quantity and quality of face-to-face and Web site communications to industry is indispensable for broadening the ITP’s impact and creating the opportunity to exceed program goals. It is especially important to understand who the key industry decision makers are and to tailor communications to reach them and their personnel. Recommendation 2. Develop more effective mechanisms for collaboration and coordination across Industrial Technologies Program (ITP) subprograms and projects to reduce stovepiping and to encourage the achievement of broader goals. It appears to the committee that in some cases there is inadequate communication among subprogram areas and that opportunities for synergy are not being realized. More crosscutting communication and sharing of ideas between project teams are needed (to prevent stovepiping). Areas in which increased collaboration could be realized include melting technologies and sensors. Options to consider include the following: (1) holding topical workshops that highlight projects from different subprogram areas but that have a common theme, such as improved energy efficiency in melting; (2) modifying the solicitation process to include review by personnel from different industries to look specifically for increased collaboration; and (3) for projects that have both environmental and energy benefits, conducting reviews with the Environmental Protection Agency to look for ways to multiply those benefits. However, the most important option to consider is the creation of a class of grand challenges that integrate projects in several industries toward a greater goal. The important factors in defining a grand challenge are these: (1) the definition of a starting point in time, (2) the identification of an endpoint at which success is achieved, and (3) a level of difficulty that is challenging but not impossible. The difference between a challenge and a grand challenge is that the latter can only be achieved through the cooperation and collaboration of a number of partners in different industries, carrying out projects of different sizes, but all aimed at achieving a shared goal. As part of a grand challenge strategy, the ITP should continue to pursue plans to increase the average size of projects, but it should also continue to maintain a healthy balance of small, medium, and large projects. The trend toward larger projects offers opportunities for correspondingly larger energy savings and is therefore attractive. Pursuing success in grand challenges may increase the risk of large failures and fewer successes. An additional risk is that small to medium-sized companies may lose out in the program opportunities when compared against large firms with ample resources and influence to commit to large projects. Loss of the creative energies and viewpoints of small and medium-sized companies would be undesirable. The committee urges caution.

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Decreasing Energy Intensity in Manufacturing: Assessing the Strategies and Future Directions of the Industrial Technologies Program Recommendation 3. Redirect student education activities to other governmental entities that have direct educational missions, with the exception of those activities directly related to the plant assessments performed by students for the Industrial Technology Program’s (ITP’s) Industrial Assessment Centers. Because the mission of the ITP is energy savings, not education, any student educational activities undertaken by the ITP should be justified in terms of their energy-saving results, not their educational goals. Grants to states for educational purposes appear to the committee to be peripheral to ITP goals. State educational goals are not primary to the industrial program, and so these funds might effectively be reallocated to areas that directly impact ITP goals. Other government entities that have major educational missions, such as the National Science Foundation, are more appropriate for managing student education initiatives. Note that the Industrial Assessment Centers, for which students carry out on-site energy assessments for small to medium-sized manufacturing facilities, are an integral part of the ITP. Engineering students involved in these assessments gain an educational benefit that is a by-product of the activity, not the primary goal. Small and medium-sized facilities gain significant insight into energy-saving opportunities. Recommendation 4. Review Industrial Technologies Program (ITP) subprogram management practices to ensure clarity and consistency or, where practices differ, to ensure that differences are justified. Differences in management practices exist among the ITP subprograms. For example, the American Iron and Steel Institute manages steel solicitations outside the ITP for a management fee. Mining subprogram solicitations are managed internally by the ITP, and contract management appears divided between the ITP and industry for the forest products subprogram. If these differences are appropriate, the reasons should be clearly understood and communicated to stakeholders. This disparity raises some concern about the uniformity of criteria used to discontinue funding of marginal or failing projects and, indeed, about how the ITP judges them. Greater uniformity in program management practice is urged. Recommendation 5. Increase benefits by propagating the Industrial Technologies Program (ITP) strategy, where appropriate, to other programs in the Office of Energy Efficiency and Renewable Energy. Divestitures to other parts of the EERE (e.g., agricultural industries to the Biomass Program) may make sense organizationally, but they currently dilute the practices of the ITP and increase the chance for management and budgetary inconsistencies. However, if the ITP model (also used in the Partnership for a New Generation of Vehicles and FreedomCar programs) can be channeled to other programs in the EERE, the benefits would increase overall. The strategy of partnering with the end user of the technology to determine overall program goals, set grand challenges, and share in the project costs is a proven success. The energy savings are easily quantified, and the satisfaction of the industry partners is clear. Expanding the strategy to other programs in the EERE is a clear tactic to improve both.