systematic energy efficiency beyond ee capital… · systematic energy efficiency beyond ee...
TRANSCRIPT
Systematic Energy Efficiency
Beyond EE capital… From Energy Champions to Everyone Envolved
Mike Molnar 25 August 2010
12/13/2012 2
Diversified Global Company
Components
Engines
• Turbochargers • Filtration • Emissions • Fuel Systems
Power Generation
Distribution
12/13/2012 3
Global Revenue 2009: $10.8B
US/Canada 44%
EMEA 24%
Latin America + Mexico 11%
India 5%
Asia Pacific 10%
China 6%
12/13/2012 4
Global Footprint Over 35,000 employees in 131 countries.
12/13/2012 5
Climate Change??
Heating ↑ ⇓
Temperature ↑ & Evaporation ↑ ⇓
water holding capacity ↑ ⇓
atmospheric moisture ↑ ⇓ ⇓
greenhouse effect ↑ & rain intensity ↑
⇓ Floods & Droughts
Cradle to Grave
Car
bon
Sequ
estra
tion Carbon dioxide (CO2)
Methane (CH4) Nitrous oxide (N2O) Hydrofluorocarbons (HFCs) Perfluorocarbons (PFCs) Sulfur hexafluoride (SF6)
1,428 page US House Bill
923 page US Senate Bill
AB32
12/13/2012 6
Low Carbon Energy Efficiency Facilities
Commit
Plan Manage
Improve
12/13/2012 7
Climate change initiatives position Cummins for sustainable success
It’s Good Business and
Good For Our Business
Energy Efficiency Drives Greenhouse Gas Reduction
Regulations are Coming
Our Customers Can Count on Us
It’s the Right Thing to Do
Business Case
12/13/2012 8
GHG Reduction Goal Setting Measure what we had already accomplished
–2.3% absolute and 20% intensity reduction 2000-2005
Set competitive goal –A goal that is competitive among peers –Cummins enjoying strong growth, elected an intensity metric to focus
on sustainable growth
First public commitment –25% intensity reduction from 2005 baseline by 2010
Climate Leaders Commitment Achieved by Energy Efficiency
"Fugitive gases"(process GHG)
15%
Stationarycombustion(direct GHG)
22%
Electricity(indirect GHG)
59%
Other 1%Mobile sources(owned auto/air) 3% 85% of our GHG emissions are from using
energy
– Indirect - generation of electricity
–Direct - fuel we combust
–Fugitive gases – focus to eliminate Achieving GHG reduction pays dividends
of energy efficiency
–Avoiding ~ $25 million of annual utility spend
2005 baseline year footprint
12/13/2012 10
Low Carbon Energy Efficiency Facilities
Commit
Plan Manage
Improve
12/13/2012 11
Systematic GHG/EE Approach
Planning 1. Scenario 2. Business Case 3. Commitment 4. Baseline 5. Benchmark 6. Assessments
Managing 7. Leaders 8. Teams 9. Methods 10. Portfolio 11. Goals & Targets 12. Reporting
Improving 13. Capital
Improvements 14. Operational
Improvements 15. Education and
Engagement 16. Sustainable
Building Standards
12/13/2012 12
Carbon Footprint Pareto
Large office building - 1%
Next 10 sites - 18%
189 other non dist sites - 14%
150 distributor sites - 5%
Mfg site - 9% of total CMI
Tech Center - 8% of total CMI
7%
6%
5%
5%
5%5%3%
3% 3%
Data Center - <1%
Tech Center - 1%Data Center- 1%
15 US sites account for ~ 2/3rds of total footprint (~ 400 sites) Make GHG emissions visible – stress linkage to Energy Use
Manufacturing
Tech Center
Data Center
Office / Whse
Manufacturing
Tech Center
Office / Whse
12/13/2012 13
Assessing Opportunities By Intensity vs Energy Use
0 20000 40000 60000 80000 100000 120000
MwH / Annum
0.0
20.0
40.0
60.0
80.0
100.0
120.0
140.0
160.0
Inte
nsity
(kw
H /
ft^2)
High Intensity and High Energy Use
Low Intensity and Low Energy Use
High Intensity and Low Energy Use
Low Intensity and High Energy Use
Ene
rgy
Inte
sity
( U
se /
size
)
Energy Use
12/13/2012 14
0 20000 40000 60000 80000 100000 120000
MwH / Annum
0.0
20.0
40.0
60.0
80.0
100.0
120.0
140.0
160.0
Inte
nsity
(kw
H /
ft^2)
High Intensity and High
Energy Use
Low Intensity and Low Energy Use
High Intensity and Low Energy Use
Low Intensity and High Energy Use
Assessing Opportunities By Intensity vs Energy Use
25 priority sites for first wave of detailed EE assessments E
nerg
y In
tesi
ty (
Use
/siz
e )
Energy Use
Actual Intensity 177 Actual Intensity 201
Manufacturing
Tech Center
Data Center
Office / Whse
Manufacturing
Tech Center
Office / Whse
The Cummins 7 Energy Themes
Power Management
Heating & Cooling
Building Envelope Lighting
Energy Recovery Fuel Usage
Machinery & Equipment
12/13/2012 16
Reduction Opportunities Found More than 500 technically viable capital projects defined at first 15 US sites
Heating / Cooling 36%
Waste Heat 23% Process Power
12%
Lighting 10%
Combustion 8%
Operations 4%
Water 3%
Building Envelope 2% Powered Equipment 2%
Key Idea 1
Invest in EE assessments at largest /energy intensive sites
“parent” findings for all others
12/13/2012 17
Low Carbon Energy Efficiency Facilities
Commit
Plan Manage
Improve
12/13/2012 18
Systematic GHG/EE Approach
Planning 1. Scenario 2. Business Case 3. Commitment 4. Baseline 5. Benchmark 6. Assessments
Managing 7. Leaders 8. Teams 9. Methods 10. Portfolio 11. Goals & Targets 12. Reporting
Improving 13. Capital
Improvements 14. Operational
Improvements 15. Education and
Engagement 16. Sustainable
Building Standards
12/13/2012 19
Teamwork for Energy Efficiency
Energy Efficiency
Team
Facilities and Business Leaders
Site Teams
Energy Champions and the Health, Safety, Environment Council Promote Efficiency at
Site Level
EET provides program management, goal setting, activity tracking, and accountability to progress
Capital Council
All capital projects are evaluated for energy efficiency and greenhouse gas reduction
Cummins Facilities Council established to drive improvements and share best practices
12/13/2012 20
Financial Valuation and Prioritization
Cummins pioneers “sustainable capital planning” –Standard capital evaluation tool has “Energy &
Environment” section added –Calculates energy use, costs, and GHG footprint for every
investment –Includes financial valuation for CO2 impact
Tool enables our prioritization of energy efficiency investments –Prioritize by IRR and GHG cost/benefit –Investment rule for % return, initial $ per annual CO2
12/13/2012 21
Return on Investment ( IRR % )
Initi
al c
apita
l cos
t per
ann
ual G
HG
ben
efit
( $ /
tCO
2e )
COMBUST HVAC LIGHT PROC WH POWEQ
FinancialReturnHurdle
Environmental Benefit Hurdle
Data Mining Assessments for best environmental and financial results
Tremendous opportunities for improvement found in energy efficiency
“Balanced Scorecard” financial model with GHG metric produces clear total value return
Prioritization based on both environmental and financial benefits – two minimum hurdles designed to meet our goals
All these projects meet our environmental and financial investment criteria
All these projects are priorities – offering superior environmental and financial benefits – do these first!
12/13/2012 22
Example Site Energy Efficiency Assessment/Prioritization
Positive financial return, meeting 25% reduction goal
52
40
10
Reviewed and selected by plant for implementation wave
42
Identified energy efficiency capital projects by assessment team
After further study, technically viable projects
Meets corporate investment rule
Key Idea 2
Put a value on GHG
Portfolio investment approach based on best financial and
environmental returns
12/13/2012 23
Low Carbon Energy Efficiency Facilities
Commit
Plan Manage
Improve
– Capital Improvements – Operational Improvements via “Energy Champions” – Involving everyone in savings
12/13/2012 24
Systematic GHG/EE Approach
Planning 1. Scenario 2. Business Case 3. Commitment 4. Baseline 5. Benchmark 6. Assessments
Managing 7. Leaders 8. Teams 9. Methods 10. Portfolio 11. Goals & Targets 12. Reporting
Improving 13. Capital
Improvements 14. Operational
Improvements 15. Education and
Engagement 16. Sustainable
Building Standards
12/13/2012 25
Fuel Systems Plant - Columbus Indiana Former MH lighting replaced New high efficiency lighting installed
Capital Project Example High Efficiency Lighting
Capital: $535k Annual Savings $343k GHG avoided: 3,372t
Lighting is higher quality and brighter, uses “smart sensor” Project replicated at 49 other sites
Energy Efficiency Case Studies
Lighting: Industrial
Case studies illustrate projects very effectively Organized by the seven energy themes in a standard format Each to include case studies relevant to employees’ home life
Lighting: Home
12/13/2012 27
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
90,000
100,000
Q1-200
6
Q2-200
6
Q3-200
6
Q4-200
6
Q1-200
7
Q2-200
7
Q3-200
7
Q4-200
7
Q1-200
8
Q2-200
8
Q3-200
8
Q4-200
8
Q1-200
9
Q2-200
9
Q3-200
9
Q4-200
9
Quarter
Tons
CO
2 E
quiv
alen
t
PGBU
CBS
FSBU
CFBU
DBU
EBU
CTT
CESEnergy Efficiency
Team (EET) established
Strategic fund begins seeding projects
Cummins Facilities Council established
EPA base year is 2005, 1/06 is start of
our improvement commitment
Energy Champions Training Program
Launched
2006 to date 251 capital projects, ~50% ROI $17M annual savings 235,000 tCO2e annual reduction
Energy Efficiency Capital Project Results
12/13/2012 28
GHG reductions
12/13/2012 29
Low Carbon Energy Efficiency Facilities
Commit
Plan Manage
Improve
– Capital Improvements – Operational Improvements via “Energy Champions” – New Building Standards for Sustainable Future Growth
Key Idea 3
Lots of opportunities with capital investments, but…
How you operate sites equally
important
12/13/2012 30
GHG and Energy Training Strategy Energy Champions & Leaders
Individual Actions-
Company Impact $
Ener
gy C
ham
pion
s
Ener
gy L
eade
rs
Cum
min
s Em
ploy
ees
5 Days – Centralized Group + Web 10 – one hour
local weekly sessions 4 Hours –
Web
Com
mitm
ent
Lead EE at site
Coach/mentor ELs in local teams
Team “starpoint” resource Generate ideas Implement power down
Generate Ideas Act
Content
Energy Champion one per site
Energy Leaders Area/shift based associates,
2-20 per site
All Cummins employees – info for their benefit at home,
and at work
12/13/2012 31
Energy Champions/Leaders Program Operating our facilities for Energy Efficiency
One per Site Coaching and Project Focus
One in every area/team at a Site
Operations Improvement Focus
Wave 5 EC Launch, Daventry UK February 2010
Pilot Graduation Energy Leader Class CIC/CKEC, January 2010
Every site can save at least 10% with low/no cost actions
~ $10M savings
2010 Goal: 100 Energy Champions trained
At least 20 sites with active Energy Leaders programs
12/13/2012 32
Building a Network of Energy Champions
Resources: Time, People, Money
9 Box Matrix
Ben
efits
: Fin
anci
al, E
nviro
nmen
tal,
Impa
ct to
the
Ent
erpr
ise
Projects for Energy Leaders
Bro
nze
Silv
er
Gol
d
Projects for Energy Champions
Projects for Facilities Council/EET
“Just Do It” types of projects
No or low cost
“Just Do It” types of projects
No or low cost
Kaizen projects, Energy
Campaigns
Large capital and/or strategic
projects, Six Sigma
Avoid – low or negative return on
resource investment
Example “Energy Treasure Hunt” projects Minimize Fan Run Time from 24 hrs/day to
run only when wash pumps operate.
Change chemicals to reduce tank temps, use less natural gas
Non-capital Energy Treasure Hunt Creates “hoppers” of ideas for
operations to do with either “just do it”, Energy Kaizens, or Six Sigma projects
100+ improvement ideas at typical plant
Cost to Implement Savings/yr $100 $28,019
$8,000 $36,400
Example activities for Energy Leaders – Conducting Energy Treasure Hunts
12/13/2012 35
Examples – “Make Energy Visible”
Lightswitch card
Printer sticker
Key Idea 4
Making energy use/carbon footprint visible is VERY
powerful
Everyone enabled to “shut it off”
12/13/2012 36
Low Carbon Energy Efficiency Facilities Commit
Plan Manage
Improve
– Capital Improvements – Operational Improvements via “Energy Champions” – Involving everyone in savings
12/13/2012 37
Real employees engaged in energy efficiency actions
Home energy use / fuel savings tips
Make Energy Use Personal
12/13/2012 38
Capture carbon footprint before and after individual energy efficiency efforts
Employee Carbon Pledge
12/13/2012 39
Educate Broadly with Varied Vehicles
Articles Intranet stories Emails Newsletter Factbook
In Person Site visit roadshow Staff meetings
Web and Video Webcast Web conferences Slides w/audio Social networking
12/13/2012 40
Dedicated intranet portal website * Progress and success stories GHG tracking and reduction scorecard Energy Champion training Energy and green building awards
Keep Everyone Updated
12/13/2012 41
Make Energy Use Visible and Personal
Employee Engagement
Case Study: The Cummins Unplugged Challenge
Cummins Unplugged Challenge
Use the year-end shut down period as Employee Engagement opportunity to show no cost actions by all can result in Energy and GHG savings – Objective 1: Educate employees about energy use
and carbon footprint – Objective 2: Show that everyone can have an
operational impact by their individual behavior – Objective 3: Demonstrate to plant leaders simple
changes in operating procedures during off-shift, weekend, and holiday can lower the “at rest” facility profile
Unplugged Challenge
• Best Practices package developed with Facilities Council and EE leaders
• Supporting website created
• Invitation to participate sent to every plant manager and facilities leader
• Webcast with email blast sent to every Cummins employee
Make it a contest! Only cost – banners
– Best Energy Cost Savings – Best % Energy Reduction - – Best GHG Reduction - – Best Employee Communications – Best Employee Engagement – – Most Innovative/Creative Results
– 2009 Challenge - $908,000 saved – 2010 Challenge - $1,300,000 saved
Unplugged Challenge Wrapup
Winning site: Best Cost Reduction Cummins Turbo Technologies – Huddersfield England
Key Idea 5
Hold a shutdown contest at your company
Shows many small no-cost
actions by everyone collectively make a
difference!
Thank You!
Questions or Comments welcomed… Mike Molnar Director – Environmental Policy & Sustainable Development [email protected]