Presentation by Nate Aden and James Bradbury for the July 17, 2013 Midwest Industrial Initiative Webinar co-hosted by the Midwest Energy Efficiency Alliance (MEEA) and World Resources Institute. Find out more at http://www.wri.org/event/2013/07/webinar-energy-efficiency-us-midwest-pulp-and-paper-mills
Energy Efficiency in U.S. Midwest Pulp and Paper Mills
1. MEEA Midwest Industrial Initiative Webinar
Nate Aden, James Bradbury, Forbes Tompkins
Energy Efficiency in U.S.
Midwest Pulp and Paper Mills
2. This study seeks to answer four questions:
• How does Midwest mill energy intensity compare with the rest of
the country?
• What is the efficiency potential and what are the relative costs and
emissions savings benefits?
• What are the most cost-effective energy- and emissions-saving
technology options?
• What are the primary barriers to efficiency investment and potential
policy solutions?
Questions to be Answered
3. Today’s Presentation
1. Questions and background
2. Benchmarking & emissions inventory
3. Energy efficiency options
4. Case studies
5. Policy landscape & recommendations
10. Less-efficient Midwest mills could save
$120 million by improving efficiency to
national average mill level…
0
20
40
60
80
100
EnergyPerformanceScore
ENERGYSTAR Efficiency Benchmark
U.S. Average Efficiency
Midwest Average Efficiency
Initial 18 trillion Btu of
energy savings worth $120
million
Midwest Pulp and Paper Mills
11. …and a total of $240 million if they improved
performance to the ENERGY STAR® level.
0
20
40
60
80
100
EnergyPerformanceScore
ENERGYSTAR Efficiency Benchmark
U.S. Average Efficiency
Midwest Average Efficiency
Initial 18 trillion Btu of energy
savings worth $120 million
...additional 18 trillion Btu of energy
savings worth $120 million
Midwest Pulp and Paper Mills
12. Michigan has the largest potential savings
followed by Minnesota
State Subtotal
Number
of mills
Average EPS
Potential energy savings
with ENERGY STAR
performance (trillion
Btu/year)
Potential energy cost
savings with ENERGY
STAR performance ($
million/year)
WI 7 62 10 $ 64
MN 6 40 11 $ 73
MI 4 20 13 $ 84
OH 4 39 3 $ 18
Midwest Subtotal
21
46
36 $ 240
Note: This table covers Midwest integrated or pulp-only mills with a 2010 EPS below 75; other Midwest states only have higher performing
mills or paper-only mills.
13. Paper sector CO2 emissions
depend on scope
-
2,000,000
4,000,000
6,000,000
8,000,000
10,000,000
12,000,000
KS IL MO IN IA OH MN MI WI
GrossCO2Emissions(MetricTons)
Biogenic CO2 Emission
Indirect CO2 Emissions
Direct CO2 Emissions
14. Aggressive efficiency can reduce CO2
emissions by more than fuel switching alone
-
0.5
1.0
1.5
2.0
2.5
3.0
3.5
2010 baseline fuel switching ENERGY STAR
benchmark level
CO2Emissions(Mt)
19%
34%
21. Review of barriers, policies, and programs
Barriers
• Transaction costs, capital constraints, and incomplete information
Federal Landscape
• Clean Air Act and Clean Water Act
• Public Utility Regulatory Policies Act (PURPA)
• US Climate Action Plan (June 2013)
• White House Executive Order 13624 (Accelerating Investment in
Industrial Energy Efficiency; 8/2012)
• Programs at DOE, EPA, NIST
• Legislation
State Landscape
• Technical, regulatory and financial assistance
• Utility regulation over rates and grid access
• EE targets and goals
22. Policy recommendations
1. Benchmark industrial energy efficiency
performance
2. Introduce a mix of minimum standards and
“reach” incentives
3. Support CHP utilization through state and
federal policies
4. Develop new regulatory frameworks to
promote electric utility-manufacturer
collaboration
5. Build on current research to develop
geographically and sectorally integrated
climate policy
23. Key Findings and Conclusions
• Energy efficiency can help save the 350,000 jobs associated with U.S.
pulp and paper mills
• More energy efficient Midwest pulp and paper mills would save millions
of dollars in energy costs while cutting pollution
• The situation among Midwest pulp and paper mills reflects choices
facing energy-intensive manufacturers throughout the U.S.
• New corporate and government policies can lower the hurdles
preventing companies from fully realizing available costs savings and
emissions reductions
How do Midwest pulp and paper manufacturers compare with facilities located in other regions of the country in terms of their energy intensity?What is the potential for near-term energy efficiency improvements in Midwest pulp and paper manufacturing? How do the impacts of efficiency improvements compare with the energy and emissions impacts of fuel switching from coal and oil to natural gas alone? What are the most cost-effective options available for reducing the energy- and emissions-intensity of Midwestern mills? What policies currently affect paper sector energy use and emissions? What are the key barriers and policy solutions for pulp and paper, as well as other energy-intensive sectors?
Why the Midwest? Why pulp and paper? 3rd largest energy-using manufacturing subsector; energy and emissions-intensive subsector; industry that has a footprint in all regions of the USembelmatic of
# of mills and production per stateProduction trendsEmployment trends
We have 93 mills in the MidwestPulp only, paper only, and integratedMost are paper-only, accounting for just over half of all pulp and paper production, by weight.Pulping is done by two different processesPlus recycling
Explain benchmarking approaches and challenges
Product mix
Explain EPI & EPS
Recently DC circuit rejected EPA’s proposal to assume zero emissions subject to studyWhich accelerates timeline for EPA decision65% of on-site from biomass for US average but US mills are more fossil-intensive than other regions
Primary driver is that most mills have already switched away from fossil fuelsThis calculation is based on the 7 out of 25 assessed mills that use coal or oilFuel switching is ideally combined with efficiency improvements; however, data are currently insufficient to display the emissions results from the combined scenario.Existing technologies best performing mills.
3 benefits of ee investment: economic (cost reduction and competitiveness), jobs preservation, and environmentalMN trillion Btu program