Industrial Energy Efficiency
The U.S. Department of Energy’s Energy Information Administration (EIA) defines the industrial sector as “an energy-consuming sector that consists of all facilities and equipment used for producing, processing, or assembling goods. The industrial sector encompasses the following types of activity: manufacturing (NAICS codes 31-33); agriculture, forestry, fishing and hunting (NAICS code 11); mining, including oil and gas extraction (NAICS code 21); natural gas distribution (NAICS code 2212); and construction (NAICS code 23).” [Source: EIA. Petroleum and Other Liquids: Definitions Sources and Explanatory Notes. 2014]
Unlike the commercial and residential sectors, the main driver of energy consumption in the industrial sector is process heat and cooling, and powering machinery. Facility heating, air conditioning and appliances also drive energy consumption to a lesser degree.
The nation’s manufacturers convert an array of raw materials into finished products that meet market demand. According to the U.S. Department of Energy (DOE), America’s manufacturing sector contributes around 12% of the Gross Domestic Product (GDP), directly employs close to 12 million people, produces about 20% of the world’s manufacturing output, supplies around 57% of the nation’s exports, and accounts for 60% of the nation’s engineering and science jobs. Industry is also the largest energy consuming sector in the country, so any improvements made in energy efficiency and the increased use of renewable, clean energy translates to a cleaner environment, a stronger economy, and greater energy independence for the nation.
Facts About Virginia
According to the 2010 Census and more recent EIA data, the Commonwealth of Virginia:
Facts About Virginia
- has a population of over 8 million residents, 12th largest of the states
- has a GDP of $445.8 billion, which ranks 10th in the nation in 2013
- ranked 21st in the nation’s industrial energy consumption at 440 trillion Btu (2009 data)
- ranked 30th in the nation with its industrial natural gas consumption at 65.4 trillion Btu
Leading industries in Virginia include the manufacture of beverage and tobacco products, food, chemicals, transportation equipment, machinery, plastics and rubber products, fabricated metal products, computers and electronics, paper, and wood products. In 2009, these industries employed about 169,000 people statewide, and had a total shipment value of $67.9 billion.
Virginia is home to 20 of America’s Fortune 500 largest corporations, including Freddie Mac, General Dynamics, Dominion Resources, Smithfield Foods, Genworth Financial, Norfolk Southern, CarMax, Mead/Westvaco, Advance Auto Parts, and Dollar Tree.
Energy Consumption by Virginia’s Industrial Sector
According to the 2014 Virginia Energy Plan, the industrial sector consumed 18.6 percent of the total energy consumed in Virginia by all sectors in 2012. Sources of that industrial sector energy consumption included natural gas (26.7%), coal (21.7%), electricity (19.1%), petroleum (16.0%), and biomass (16.6%). Percentage-wise, the industrial sector consumes more coal, wood and waste, and retail electricity and less natural gas and petroleum products than the nation overall.
Recent EIA data shows that Virginia’s industrial sector spent approximately $3.08 billion for an estimated 436.5 Trillion Btus of energy in 2011, after consuming between 500 – 600 trillion Btus per year during the 2000 - 2010 time period. Historically, this sector is very sensitive to economic booms and recessions, so energy consumption can fluctuate from year to year. Significant reductions in energy use were observed from 2009 to 2011, which were most likely driven by the 2007 recession and subsequent slow economic recovery.
Trends over the past 20 years show industrial sector energy consumption leveling off in Virginia, which is likely to continue or even slightly decline in the near to medium future. After anticipated rising consumption estimates for the next couple of years, EIA projections over the next two decades for the Virginia industrial sector show energy consumption estimates leveling or declining in 2019 (604.4 trillion Btus consumed); 2024 (582 trillion Btus consumed); and 2034 (517.7 trillion Btus consumed).
Incentive Programs in Virginia for Industry
- The Tobacco Region Revitalization Commission was created in 1999 by the General Assembly to indemnify tobacco growers and quota owners against the adverse effects of quota declines, and to revitalize tobacco-dependent communities in Southside and Southwest Virginia. According to its newly launched website, www.revitalizeva.org, the TRRC’s mission is “the promotion of economic growth and development in tobacco-dependent communities, using proceeds of the national tobacco settlement.” To date, 2,036 grants have been awarded across Virginia’s tobacco region totaling more than $1.1 billion, and $309 million in indemnification payments have been made to tobacco growers and quota holders. In 2012, the Commission reached the end of its indemnification obligations, and focused its revitalization efforts on eight grant programs available to local governments, government entities and non-profit organizations. In 2012, the Commission reached the end of its indemnification obligations, and focused its revitalization efforts on eight grant programs available to local governments, government entities and non-profit organizations.
Since 2010, over $490 million has been available for economic revitalization, and several grant awards were made for energy-related projects, including increasing farm profitability through on-farm energy efficiency; development of biodiesel and legume feed/food crops as alternative to tobacco; alternative energy training program development; integrated solar and battery storage demonstration; design/ manufacture of affordable, energy efficient housing systems; green manufacturing initiative for SW Virginia; anaerobic digester facility development; design/construction of Farm-to-Fuel project; tobacco biomass for ethanol and biodiesel production; and E3 (Economy, Energy and Environment) Pilot Program in southern Virginia. The Commission has also provided funding for six Research and Development Centers that examine sustainable energy technology, advanced manufacturing and energy efficiency, and clean energy technologies, among other engineering and research activities. Visit the Tobacco Region Revitalization Commission for further details on available grant opportunities.
- The Virginia Manufacturers Association offers training courses through its Certified Industrial Energy Auditor (CIEA) program focused on energy management best practices, electricity generation and distribution, energy system instrumentation and controls, and lean energy and energy smart concepts. Individuals are trained to audit the performance of their industrial organization’s energy management team, or where no such team exists, will expand the organization’s knowledge of resources and technologies to utilize to reduce the facility’s energy demand, energy costs, and carbon footprint.
- The Commercial Distributed Generation Program will pay customers an incentive to reduce their electricity consumption during peak demand hours.
- Appalachian Power’s Commercial and Industrial Program provides rebate assistance to Virginia business and industrial customers who retrofit or replace lighting or variable frequency drives with energy efficient products to offset costs. Rebates are calculated based on $.05/kWh saved annually, contingent upon review and acceptance of claimed savings. Items eligible for rebates include linear fluorescent retrofits (LED and T5 upgrades), energy efficient exterior lighting, occupancy sensors and daylight controls, LED signage, and VFD installation. Effective June 15, 2017, a maximum rebate of $50,000 per account for each program year is allowed, and the rebate may not exceed 30% of the total project cost. Rebate fund reservations and applications are available at TakechargeVA.com/business, or call 877-428-5427 for additional information.
- Dominion Virginia Energy offers several energy conservation programs to help commercial and industrial customers, large businesses and small businesses, save money and conserve energy. Many of these programs offer financial incentives and rebates to participants. An on-site energy audit will be performed by a pre-qualified contractor under the Small Business Improvement Program to analyze a facility’s energy use and recommend cost-effective energy efficient improvements to be made. Financial incentives are also offered to help offset installation costs.
Contact SBIrebateapps@honeywell.com for more information on Dominion’s non-residential energy assessment program.
Installation of window film on a non-residential facility’s windows can lower solar radiation admitted through windows, reduce annual energy usage by almost 5%, block 99% of ultraviolet rays from entering windows, reduce glare and the need for interior lighting, and improve tenant comfort . Participation in the Non-Residential Window Film Program also qualifies a facility for a rebate. Rebates are also available under the Non-Residential Heating and Cooling Efficiency Program for air conditioners, heat pumps, chillers, variable frequency drives, and economizers, and upgrades to existing lighting or installation of new energy efficient lighting/controls (T8s, T5s, CFLs, LEDs and occupancy sensors) will allow facilities to claim a rebate under the Non-Residential Lighting Systems and Controls Program. The Non-Residential Distributed Generation Program will pay an incentive to participating customers to reduce electricity consumption for up to 120 hours/year when electrical demand is high. Backup generators located at the customer’s facility would provide supplemental power during those peak times. Go to https://www.dominionenergy.com/large-business/energy-conservation-programs or call 1-888-366-8280 for more details about these energy conservation programs and procedures for applying for and receiving a rebate.
Dominion Virginia Energy also assists commercial and industrial customers interested in the growth of renewable energy opportunities through several green initiative programs (Dominion Green Power, traditional and agricultural net metering, Solar Partnership and Solar Purchase programs, and a Renewable Energy Pilot Program). Information on these options can be found at https://dominionenergy.com/large-business/renewable-energy-programs.
- Industry customers of the Tennessee Valley Authority can participate in its EnergyRight Solutions for Industry program. Customized technical assistance is available to develop plant-wide, holistic approaches to energy savings to maximize a facility’s efficiency and control expenses. Program participants may also be eligible for financial incentives to make energy efficient improvements to their plant and operations. Business customers can take advantage of standard rebates and customized incentives to help reduce energy costs by making energy efficient investments. These financial incentives are offered through participating local power companies in partnership with TVA. TVA also offers several demand response programs for commercial and industrial customers.
- DOE’s Advanced Manufacturing Office (AMO) partners with industry, small business, universities and other stakeholders in every state to promote emerging technologies that can create high-quality domestic manufacturing jobs and enhance the global competitiveness of the U.S. The AMO also works with states to help their industries become more energy efficient. The Office has worked with 14 projects through Virginia universities and industries to complete research and development (R&D) work in the areas of mining, forest products, chemicals, CHP and distributed generation, and industrial materials for the future. Twenty large plants in Virginia have benefited from on-site Energy Savings Assessments which identified immediate opportunities to save energy at their facilities, and another 22 medium/small plant assessments were conducted between 2009 and 2011 through Industrial Assessment Centers to provide no-cost, on-site energy audits at those facilities.
Other Resources and Tools Available
- Genedge Alliance is an affiliate of the Manufacturing Extension Partnership (MEP), a national network of centers that provide enterprise expertise to businesses across the country. Genedge has partnered with the Old Dominion University Business Gateway (ODUBG) at Old Dominion University in Norfolk, and the Manufacturing Technology Center (MTC) in Wytheville to offer industrial and manufacturing sectors access to industry-wide benchmarks and business solutions that are normally only accessible to larger companies. The organization offers industrial training workshops, as well as sustainability and energy services such as walk-through energy assessments, subject-specific energy assessments, energy/ environmental value stream mapping, and E3 program management.
Nationally, E3 – Energy, Environment, Economy – is a combined effort of several federal agencies to promote sustainable manufacturing the economic growth throughout the nation. In Virginia, more than 27 public and private-sector organizations participate in E3 Southwest Virginia, which provides free on-site assessments of manufacturing facilities covering energy, environment and economic technical activities in 17 counties in southwest Virginia and the City of Danville. Follow-up assistance is provided by Genedge Alliance.
- Virginia manufacturers have access to technical assistance provided by DOE and the Environmental Protection Agency (EPA) through the Mid-Atlantic Combined Heat and Power (CHP) Technical Assistance Partnerships program. This program offers regional meetings, workshops and webinars to organizations and businesses in the six Mid-Atlantic States and the District of Columbia to educate them about the generation of electric power and thermal energy through combined heat and power, waste heat recovery, and district energy networks. Entities can then evaluate whether their facilities are good candidates for these energy approaches, and how much will be saved in energy costs by implementing these approaches.
- Under DOE’s Better Plants Program, manufacturers across the country are signing voluntary pledges to reduce their energy use by about 25% over ten years (or an equivalent for their sector). About 120 participating companies represent about 8% of the total national manufacturing energy footprint to date, and are comprised of industry sectors that consumer about 77% of all energy used in the country’s manufacturing sector. DOE data suggests that many facilities can save 15% or more annually through energy reduction projects with payback periods of less than three years. Eighteen companies in Virginia have joined this program, including the Volvo Group’s Dublin facility. The Better Plants Program supports DOE’s Clean Energy Manufacturing Initiative, a comprehensive effort to ensure the competitiveness of U.S. manufacturers in the global marketplace. Learn more about these resources at the links above or email BetterPlants@ee.doe.gov.
Research and Development Centers
- The R&D Center for Advanced Manufacturing and Energy Efficiency (R&D CAMEE), located in the Southern Virginia Higher Education Center (SVHEC) Innovation Center in South Boston, was developed to stimulate and accelerate economic growth by providing advanced manufacturing and energy efficiency solutions to manufacturers via innovative technology and techniques. The R&D Center collaborates with educational institutions, the manufacturing industry and other partners to achieve its goals of reducing waste and costs, and improving the quality of manufactured products. It is one of six R&D Centers located in Virginia that received start-up funding from the Virginia Tobacco Commission in 2010, and is housed in a renovated historic tobacco facility in Halifax County.
- A second R&D Center located in Halifax County is the Southern Virginia Product Advancement Center (formerly known as the Riverstone Energy Centre), a state-of-the art facility offering services that support commercialization of new clean-energy technologies. Major areas of research interests include agribusiness, energy generation/storage/management, energy coatings, and energy efficiency. Wood farming, improved energy storage, coating applications, and production of more energy efficient modular housing structures are examples of the clean-energy technologies being explored at the Center.
- The Sustainable Energy Technology Center (SEnTeC) was opened in 2012 by the Institute for Advanced Learning and Research in Danville to develop renewable energy, bio-products and bio-based fuels in southern Virginia. SEnTeC is providing opportunities for contract research and start-up companies to encourage technology transfer and associated commercialization. The building itself is a study in sustainability, with features including a rainwater cistern, use of low-emitting materials, solar thermal panels, vegetated green roof, and high efficient LED light fixtures throughout the building.
- Opened in 2011, Foundation Growth Ventures (former known as the Southwest Virginia Clean Energy R&D Center) is located in Abingdon, with the mission of connecting talented people, promising technologies and capital to encourage innovations in conventional and alternative energy. Examples of areas of interest include methane generation from wastewater treatment plants, poultry litter and other agricultural wastes; geothermal energy from flooded, abandoned coal mines; development of fuel tanks for CNG-powered vehicles, beneficial uses of coal slurry; generation of electricity and heat from gasification of municipal/agricultural waste for use at industrial parks, colleges, etc.; and use of coalbed methane and conventional natural gas for CNG filling stations.
- Bedford County is home to the Center for Advanced Engineering and Research (CAER), completed in 2011. This Center’s focus is on nuclear energy technology, and houses the B&W mPower reactor Integrated Test Facility and the Center for Safe and Secure Nuclear Energy (CSSNE). The goal of this Region 2000 initiative is to create a knowledge-based research hub for the region.
Industrial Assessment Centers Serving Virginia Manufacturers/Industry
Twenty four (24) Industrial Assessment Centers (IACs) are located at universities across the country, and are funded by the U.S. Department of Energy. The centers were originally created almost 40 years ago to assist small and medium-sized manufacturing facilities in reducing their costs from inefficient energy use, ineffective production processes, and excess waste production. Today, the centers focus efforts primarily on reducing energy use and increasing energy efficiency, and provide technical materials and workshops promoting energy efficiency, as well as training the next generation of energy efficiency engineers. The IACs also conduct energy conservation research for industrial applications by performing energy audits/assessments at manufacturing facilities near the centers. Energy cost savings of over $4.5 billion have been achieved since the program’s inception.
Participating universities closest to the Commonwealth that house an Industrial Assessment Center include:
- West Virginia University
- University of Delaware
- North Carolina State University
- Tennessee Technological University
Economic Development Opportunities for Energy Industries
For energy-related manufacturers and industries looking to relocate or expand industrial operations, Virginia offers advantages and assets unmatched by neighboring jurisdictions.
- Its premier Gateway Region, located in the Tri-Cities area of the state (Colonial Heights, Hopewell and Petersburg, just south of Richmond), is well positioned for logistics, distribution, advanced manufacturing, aerospace, food manufacturing and energy companies seeking a location where access is a top priority. This East Coast midpoint is home to well-established energy companies working in traditional energy fields, and alternative energy industries such as biofuels, nuclear power, renewable energy and wood pellet manufacturing are growing in numbers. For more information on Virginia’s Gateway Region, go to http://www.gatewayregion.com.
- The military presence in the Tidewater area of the state is strong, and the U.S. Air Force and Navy have pledged to obtain half of their daily fuels needs from alternative sources in the next 3-7 years, providing defense contracting opportunities for biofuel production.
- Highly trained and experienced technicians, engineers, computer specialists, plant operators, and project managers make up a capable and diverse workforce in Virginia. Excellent colleges and universities in the Commonwealth offer applicable science and engineering degrees that are developing the energy workforce of the future.
- The Port of Virginia, Hampton Roads, and barge-accessible rivers and sites allow for downstream shipping of manufacturing components to the Port for national or international distribution.
- The nation’s second offshore wind energy lease sale was recently completed; 112,800 acres off the Virginia Beach coast were auctioned in September 2013 as a single lease that is anticipated to support 2,000 megawatts of wind generation that will produce enough electricity to power 700,000 homes.
- The eastern shore area of Virginia is the site of the nation’s first offshore wind turbine test facility, which offers opportunities for new suppliers and manufacturers to locate plants nearby.
- Several financial incentives are available for “green energy” companies, including tax exemptions from local property taxes, rebates and grants.
- Danville Utilities: The Danville, Virginia Department of Utilities (DU) provides a variety of services to customers in south central Virginia, including electricity, natural gas, water, sewer and telecommunications. Several of its key accounts, including schools, government agencies, commercial businesses and industrial manufacturers, consume large amounts of energy sold to them by DU. About ten years ago, Virginia’s General Assembly called for a phased approach to electricity deregulation. Instead of lowering electricity prices through competition as envisioned, prices began to increase in large part because of energy market price volatility during that time period. As a result, DU key accounts customers experienced a 40% increase in their energy costs, and many of these customers threatened to move their operations outside of DU’s service area.
Danville Utilities turned to the U.S. Department of Energy’s Industrial Technologies Program for assistance, through its university-based Industrial Assessment Center (IAC) program. DU partnered with the IAC at North Carolina State University to help the utility provide free energy audits to its manufacturing key account customers. Data was collected at each manufacturing facility to form baseline assessment recommendations and potential energy savings opportunities. DU’s customers have been able to improve their facilities’ energy efficiency through such methods as lean manufacturing, improved process management, and switching to batch production runs. Energy savings have been achieved by taking a systems approach to energy efficiency and exploring ways to reduce energy loss.
Click here to learn more about the challenges and benefits experienced by Danville Utilities’ interaction with IAC and industry customers. (As an aside, electricity market deregulation was halted in Virginia when it became apparent that deregulation was not working as anticipated.)
- Volvo Trucks: Volvo Truck’s New River Valley (NRV) assembly plant in Dublin, VA is the first facility in the nation to be certified to the ISO 50001 standards under the U.S. Department of Energy’s (DOE) Superior Energy Performance (SEP) program, and is the first SEP-certified plant to use ISO 50001 as its energy management system standard. These dual certifications will assist the NRV facility in reducing its energy usage to eventually become carbon neutral.
Workers at Volvo Trucks’ New River Valley assembly plant in Dublin, Va. lower a Volvo D13 engine onto a chassis. Assembly of a Volvo VNL 780, equipped with a Volvo D13 engine.
The new SEP certification program is a nationally accepted system that verifies energy performance and management improvements, and provides a pathway for facilities to achieve continuous energy efficiency strides. To earn SEP certification, facilities must conform to the ISO 50001 energy management standard. Volvo Trucks achieved the platinum level of SEP certification by improving their energy performance, based on an established baseline, by 25.8 percent in three years. The performance criteria for platinum certified partners are meeting a 15% energy performance improvement threshold over three years, which Volvo Trucks surpassed.
NRV became the first of 32 companies participating in DOE’s Better Buildings/Better Plants program to meet its 10-year commitment to reduce its energy intensity per unit by 25 percent. Volvo met the program’s target in one year.
Roanoke Cement Company: Roanoke Cement Company (RCC) was recognized by the Virginia Environmental Excellence Program (VEEP) in August 2013 as an Exemplary Environmental Enterprise (E3). RCC’s E3 participant status reflects the company’s promotion of environmental management systems and pollution prevention to minimize its operational impacts on the environment. RCC has implemented Envirolis, an EMS system that ensures the timely implementation of regulatory requirements. The E3 certification is the latest recognition for the company; RCC has been awarded an Energy Star by the U.S. Environmental Protection Agency for the past seven years. Its Troutville plant has won the Portland Cement Association’s Cement Industry Energy and Environment “Outreach” Award for the past two years, and the Wildlife Habitat Council has also certified the plant.
Industrial customers can pursue cost-effective opportunities to use energy more efficiently by checking out the following web links:
- Case Studies - Read about companies that have participated in past assessments and are already saving energy and money with assistance from DOE technical experts.
- DOE Building Energy Software Tools Directory - This directory provides information on 345 building software tools for evaluating energy efficiency, renewable energy, and sustainability in buildings. The energy tools listed in this directory include databases, spreadsheets, component and systems analyses, and whole-building energy performance simulation programs. A short description is provided for each tool along with other information including expertise required, users, audience, input, output, computer platforms, programming language, strengths, weaknesses, technical contact, and availability.
Some of the tools are applicable to existing building or retrofit analyses as well as new buildings. There are also some water use tools in the listing.
- EPA SmartWay Transport Partnership - The SmartWay Transport Partnership is an innovative collaboration between EPA and the freight industry to increase energy efficiency while significantly reducing greenhouse gases and air pollution. The website describes technologies and approaches for fuel savings and emissions reductions in the freight sector.