Industrial Energy Efficiency

The industrial sector accounts for one-third of the total U.S. energy consumption[1], and as such represents a substantial opportunity for cost-effective energy savings. Effectively managing and reducing industrial energy use has increasingly become a key policy priority.

Industrial energy efficiency often represents a large and cost-effective resource for policymakers and utilities to pursue, yielding many benefits including improved competitiveness in the US manufacturing sector through lower production costs.

Photo of a gas welding torch

Key Focus Areas

The potential cost-effective energy savings in U.S industry is large—amounting to approximately 6,420 trillion British thermal units of primary energy[2] – or enough energy to power Florida, the third ranking state for overall consumption, for a year and a half.[3] Experience has shown that the industrial sector historically saves more energy per program dollar than other customer classes: at the national level, industrial energy efficiency programs had an average cost of saved energy of $0.030 per kilowatt hour (kWh) in 2012— nearly one cent lower than the aggregate average energy efficiency program cost of $0.038/kWh.[4]

Many of the well-established programs in North America continue to realize reliable energy savings from industry at or below the average costs they face for their programs overall. To realize these low-cost savings, however, requires long-term, focused efforts addressing specific industrial needs and circumstances.

SEE Action has identified four key focus areas in industrial energy efficiency and CHP:

  • Reduce barriers to industrial energy efficiency implementation: Identify and promote the development of policies and programs that facilitate the implementation of industrial energy efficiency.  Work with stakeholders to catalog and replicate these policies.
  • Build the workforce: Identify and call attention to the needs within the industrial sector for education, training, and workforce programs.
  • Promote efficient operations and investment: Improve availability of information for industry and encourage the use of industrial energy management programs that include continuous energy improvement.
  • Move the market toward IEE/CHP technologies adoption: Identify and promote programs and policies that demonstrate emerging technologies and practices.

Key Initiatives

SEE Action is currently working to equip state and local decision makers, utilities and other program administrators with the tools and information they need to yield energy and cost savings in the industrial sector. These include:

  • Identifying replicable, successful industrial energy efficiency program design features – based on practical, proven approaches in use across the country – that respond to industrial customer needs. This analysis and compilation of successful practices also includes information on designing effective self-direct programs as well as next generation programs such as strategic energy management and facility-level initiatives. 

[1] U.S. Energy Information Administration. (2013). Annual Energy Outlook 2013. http://www.eia.gov/forecasts/AEO/

[2] McKinsey & Company

[3] U.S. Energy Information Administration. State Energy Data System: Florida. Consumption (2012 data). http://www.eia.gov/state/data.cfm?sid=FL#ConsumptionExpenditures.  

[4] Source: Aden et al. 2013 based on EIA 2012 demand-side management, energy efficiency, and load management programs data for more than 1,000 utilities. Note: To ensure consistency and comparability, these values only include the 182 organizations that reported residential, commercial, and industrial savings and expenditure data; transport sector energy efficiency program data are not included except as a component of the aggregate average.  

Connect with Us about Industrial Energy Efficiency

Contact our Experts
  • Betsy Dutrow, U.S. Environmental Protection Agency,
    Industrial Energy Efficiency and Combined Heat and Power Working Group, Staff Lead
  • Sandy Glatt, U.S. Department of Energy,
    Industrial Energy Efficiency and Combined Heat and Power Working Group, Staff Lead