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Executive order looks to accelerate investment in industrial energy efficiency

September 04, 2012
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WASHINGTON — An executive order issued last week by the office of the President of the United States seeks to promote American manufacturing by helping to facilitate investments in energy efficiency at industrial facilities. One stated goal of the executive order is to deploy 40 gigawatts of new, cost effective industrial CHP in the United States by the end of 2020.

The order notes that the industrial sector accounts for over 30 percent of all energy consumed in the United States, and, for many manufacturers, energy costs affect overall competitiveness. While manufacturing facilities have made progress in becoming more energy efficient over the past several decades, there is an opportunity to accelerate and expand these efforts with investments to reduce energy use through more efficient manufacturing processes and facilities and the expanded use of combined heat and power (CHP).

Instead of burning fuel in an on-site boiler to produce thermal energy and also purchasing electricity from the grid, a manufacturing facility can use a CHP system to provide both types of energy in one energy efficient step. Accelerating these investments in our Nation''s factories can improve the competitiveness of United States manufacturing, lower energy costs, free up future capital for businesses to invest, reduce air pollution, and create jobs, the executive order states.

Despite these benefits, independent studies have pointed to under-investment in industrial energy efficiency and CHP as a result of numerous barriers. The executive order notes that the Federal government has limited but important authorities to overcome these barriers. Its efforts to support investment in industrial energy efficiency and CHP should involve coordinated engagement with a broad set of stakeholders, including States, manufacturers, utilities, and others. By working with all stakeholders to address these barriers, there is an opportunity to save industrial users tens of billions of dollars in energy costs over the next decade.

There is no one size fits all solution, the executive order notes, so it is imperative to support investments through a variety of approaches, including encouraging private sector investment by setting goals and highlighting the benefits of investment, improving coordination at the Federal level, partnering with and supporting States, and identifying investment models beneficial to the multiple stakeholders involved.

To formalize and support the close interagency coordination required to accelerate greater investment in industrial energy efficiency and CHP, the executive order directs executive departments and agencies to convene national and regional stakeholders to identify, develop, and encourage the adoption of investment models and State best practice policies for industrial energy efficiency and CHP; provide technical assistance to States and manufacturers to encourage investment in industrial energy efficiency and CHP; provide public information on the benefits of investment in industrial energy efficiency and CHP; and use existing Federal authorities, programs, and policies to support investment in industrial energy efficiency and CHP.

In addition, the executive order states that the Departments of Energy, Commerce, and Agriculture, and the Environmental Protection Agency, in coordination with the National Economic Council, the Domestic Policy Council, the Council on Environmental Quality, and the Office of Science and Technology Policy, shall coordinate policies to encourage investment in industrial efficiency in order to reduce costs for industrial users, improve U.S. competitiveness, create jobs, and reduce harmful air pollution.

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