Corporate sustainability. Voluntarily reducing greenhouse gas emissions can help boost shareholder and investor confidence, encourage favorable future legislation, improve access to new markets, lower insurance costs, avoid liability, and enhance competitiveness.
Independent studies using different approaches agree that the potential for improved energy efficiency in industry is large. Of the 34.3 quads of energy forecast to be consumed in 2020 by U.S. industry (EIA, 2008), 14–22 percent could be saved through cost-effective energy efficiency improvements (those with an internal rate of return of at least 10 percent or that exceed a company’s cost of capital by a risk premium). These innovations would save 4.9–7.7 quads annually.
Comparisons of the energy content of manufactured products across countries underscore the potential for U.S. industry to reduce its energy intensity. Japan and Korea, for instance, have particularly low levels of industrial energy intensity. Care is needed, however, to avoid unrealistic assessments. The savings potentials of existing industrial plants in the United States cannot easily be derived from comparing them with new state-of-the-art facilities in rapidly growing economies.
Additional efficiency investments could become attractive through accelerated energy research, development, and demonstration. Enabling and crosscutting technologies—such as advanced sensors and controls, microwave processing of materials, nanoceramic coatings, and high-temperature membrane separation—could provide efficiency gains in many industries as well as throughout the energy system. For example, these innovations could apply to vehicles, feedstock conversion, and electricity transmission and distribution.
Energy-intensive industries such as aluminum, steel, and chemicals have devoted considerable resources to increasing their energy efficiency. For many other industries, energy represents no more than 10 percent of costs and is not a priority. Energy efficiency objectives compete for human and capital resources with other goals, including increased production, introduction of new products, and compliance with environmental, safety, and health requirements. Outdated depreciation capital schedules, backup fees for CHP systems, and other policies also hamper energy efficiency investment.