Industry as energy efficiency bright spot

Last post, I mentioned a startling finding from a new McKinsey & Company study that the U.S. could be saving the equivalent of $130 billion in energy costs per year. The report from the consulting firm lays out strategies for gaining this potential, which translates to a carbon reduction of 1.1 gigatons of greenhouse gas emissions annually, or the equivalent of taking the entire U.S. fleet of passenger vehicles and light trucks off the roads.

There is a gigaton of interesting details in the full report titled, “Unlocking Energy Efficiency in the U.S. Economy,” but for manufacturing professionals, one of the most interesting sections is on page 84, where the authors summarize some promising programs for energy efficiency in manufacturing. Specifically, the report mentions the success of the U.S. Dept. of Energy’s Industrial Technology Program and its “Save Energy Now” initiative. The report notes the the initiative has helped more than 2,100 manufacturing sites save an average of 8 percent on total energy costs through methods that spring from site assessments. The McKinsey authors also note, however, that expanding the program would be challenging and would carry costs. Each site assessment costs about $10,000, or about $300 million if scaled out to the top 10 percent of facilities.

The report does well by putting price tags on what it would cost to implement energy saving techniques on a grand scale. The firm has obviously thought things through, and notes that partnerships between government and industry will be one of the keys to success.

The thought that we are missing out on a potential $130 billion in energy savings per year shouldn’t be viewed as a negative–some sort of irreversible failure. On the contrary, that $130 billion is a target to shoot for, and as the report notes, the manufacturing industry will have an important role to play.