MEEA Midwest Industrial Initiative Webinar

Nate Aden, James Bradbury, Forbes Tompkins

Energy Efficiency in U.S. Midwest Pulp and Paper Mills

This study seeks to answer four questions:

• How does Midwest mill energy intensity compare with the rest of

the country?

• What is the efficiency potential and what are the relative costs and

emissions savings benefits?

• What are the most cost-effective energy- and emissions-saving

technology options?

• What are the primary barriers to efficiency investment and potential

policy solutions?

Questions to be Answered

Today’s Presentation

1. Questions and background

2. Benchmarking & emissions inventory

3. Energy efficiency options

4. Case studies

5. Policy landscape & recommendations

Background on

Midwest Pulp and

Paper Mills

Most Midwest mills are located in

Wisconsin

There are three types of pulp and paper mill

in the Midwest

Benchmarking

and Emissions

Inventory

Midwest pulp and paper mills vary

widely in their energy intensity

EPI analysis indicates that Midwest mills

are less efficient than the U.S. average

Less-efficient Midwest mills could save

$120 million by improving efficiency to

national average mill level…

0

20

40

60

80

100

Ene

rgy

Pe

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rman

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core

ENERGYSTAR Efficiency Benchmark

U.S. Average Efficiency

Midwest Average EfficiencyInitial 18 trillion Btu of energy savings worth $120 million

Midwest Pulp and Paper Mills

…and a total of $240 million if they improved

performance to the ENERGY STAR® level.

0

20

40

60

80

100

Ene

rgy

Pe

rfo

rman

ce S

core

ENERGYSTAR Efficiency Benchmark

U.S. Average Efficiency

Midwest Average EfficiencyInitial 18 trillion Btu of energy savings worth $120 million

...additional 18 trillion Btu of energy savings worth $120 million

Midwest Pulp and Paper Mills

Michigan has the largest potential savings

followed by Minnesota

State Subtotal Number

of mills Average EPS

Potential energy savings

with ENERGY STAR

performance (trillion

Btu/year)

Potential energy cost

savings with ENERGY

STAR performance ($

million/year)

WI 7 62 10 $ 64

MN 6 40 11 $ 73

MI 4 20 13 $ 84

OH 4 39 3 $ 18

Midwest Subtotal

21 46

36 $ 240

Note: This table covers Midwest integrated or pulp-only mills with a 2010 EPS below 75; other Midwest states only have higher performing mills or paper-only mills.

Paper sector CO2 emissions

depend on scope

-

2,000,000

4,000,000

6,000,000

8,000,000

10,000,000

12,000,000

KS IL MO IN IA OH MN MI WI

Gro

ss C

O2

Em

issi

on

s (M

etri

c To

ns)

Biogenic CO2 Emission

Indirect CO2 Emissions

Direct CO2 Emissions

Aggressive efficiency can reduce CO2

emissions by more than fuel switching alone

-

0.5

1.0

1.5

2.0

2.5

3.0

3.5

2010 baseline fuel switching ENERGY STARbenchmark level

CO

2Em

issi

on

s (M

t)

19%34%

Energy Efficient Options:

A range of technologies and practices are

available to reduce energy use

Midwest pulp and

paper mills could

cost-effectively

reduce their energy

intensity by 25%

Recycling and drying technologies have

significant savings potential

Case study plants

and companies

demonstrate the

business-case for

investment, and

illustrate the role of

policy

Leading plants and companies have already

successfully invested in energy efficiency

There are multiple benefits to energy

efficiency investment

Review of barriers, policies, and programs

Barriers

• Transaction costs, capital constraints, and incomplete information

Federal Landscape

• Clean Air Act and Clean Water Act

• Public Utility Regulatory Policies Act (PURPA)

• US Climate Action Plan (June 2013)

• White House Executive Order 13624 (Accelerating Investment in Industrial Energy Efficiency; 8/2012)

• Programs at DOE, EPA, NIST

• Legislation

State Landscape

• Technical, regulatory and financial assistance

• Utility regulation over rates and grid access

• EE targets and goals

Policy recommendations

1. Benchmark industrial energy efficiency performance

2. Introduce a mix of minimum standards and “reach” incentives

3. Support CHP utilization through state and federal policies

4. Develop new regulatory frameworks to promote electric utility-manufacturer collaboration

5. Build on current research to develop geographically and sectorally integrated climate policy

Key Findings and Conclusions

• Energy efficiency can help save the 350,000 jobs associated with U.S.

pulp and paper mills

• More energy efficient Midwest pulp and paper mills would save millions

of dollars in energy costs while cutting pollution

• The situation among Midwest pulp and paper mills reflects choices

facing energy-intensive manufacturers throughout the U.S.

• New corporate and government policies can lower the hurdles

preventing companies from fully realizing available costs savings and

emissions reductions

Thanks!

Nate Aden

naden@wri.org

James Bradbury

jbradbury@wri.org

For more information, please see the full report at: http://www.wri.org/publication/energy-

efficiency-in-us-manufacturing-midwest-pulp-and-paper