U.S. Department of Energy, Industrial Technologies Program

Innovations to Energy Efficiency

March 31, 2009Isaac Chan

• Climate change• Energy security• Global competitiveness

“The industrial sector presents numerous opportunities for advanced technologies to make significant contributions to the reduction of CO2 emissions to the Earth’s atmosphere.”

U.S. Climate Change Technology Program Strategic Plan under auspices of the Office of Science and Technology Policy

Converging issues highlight strategic role of industrial energy efficiency

• Consumes more energy than any other sector of the economy (~32 quads)

• Responsible for ~1,660 MMTCO2 /year from energy consumption

• Manufacturing makes the highest contribution to U.S. GDP (12%)

• Produces nearly 1/4th of world manufacturing output

• Spurs job creation and investment in other sectors

U.S. Industry: Key Opportunity in Energy & Emissions U.S. Industrial Sector• >200,000 sites• Nearly 14 million manufacturing jobs• Over $6 trillion in goods provided• Over $1 trillion in exports

Ener

gy In

tens

ity(T

hous

and

Btu

/$ G

DP)

Energy Consumption (Trillion Btu/yr)

1

10

100

1000

10 100 1000 10000

Petroleum

ChemicalsPaperPrimary

Metals

Nonmetallic MineralsWood

Mining

Opportunities Across the Industrial Value Chain

Downstream Processing (Automotive,

Aerospace, etc.)

Savings here (from higher productivity, less scrap, etc.) translate into savings in the production of basic materials (the “embedded “energy)

Food ProcessingTobacco/BeveragesFurniture

Leather Machinery and ComputersTransportation

Fabricated Metals

Textiles/Apparel

Plastics/Rubber

ElectricalPrinting

Miscellaneous

Crosscutting Technologies

(benefitting all industries)

Industry Specific Applications (for the most energy-intensive sectors)

Petroleum

ChemicalsPaperPrimary

Metals

Nonmetallic MineralsWood

Mining

R&D Guiding Principles• Target opportunities to achieve the

greatest impact with limited resources• Invest where we can add the most value

in the R&D cycle• Partner with the stakeholders to ensure

successful technology transfer and commercialization

ITP’s R&D Mission

STAGE 2 Concept

Definition

STAGE 3 Concept Develop-

ment

STAGE 4 Technology

Development & Info Verification

STAGE 5 Commercialization

and Info Dissemination

GATE 3 Proof of

Technical Feasibility

GATE 2 Research Approval

STAGE 1 Preliminary

Investigation & Analysis

GATE 1 Research

Project Selection

GATE 4 Proof of

Commercial Feasibility

Stage Gate Project Decision-Making Process

STAGE 2 Concept

Definition

STAGE 3 Concept Develop-

ment

ITP focuses on Stage 2 and 3 projects, with select Stage 4 activities in strategic areas

STAGE 4 Technology

Development & Info

Verification

1. Improve today’s manufacturing processes

2. Transform the future of manufacturing

Partnership is Critical to ITP’s Success

ITP actively collaborates with:• Private companies, utilities, and trade/technical

associations• Other DOE programs (BES, Wind, Solar, etc.)• Federal agencies (NIST, EPA, etc.) and State

Energy Offices• Interagency groups and NGOs such as Green Grid

(data centers) and the National Nanotechnology Initiative

• The National Labs

Leveraging the resources and knowledge of a diverse partner base enables ITP to transform innovative science into cutting-edge energy solutions

http://www.nano.gov/html/news/home_news.html

Rigorous Analysis Sharpens Focus on Opportunities

TECHNICAL ANALYSIS to evaluate savings opportunities and estimate benefits

• Energy bandwidth and benchmarking

• GPRA analysis

TECHNOLOGY VISIONS AND ROADMAPS to build consensus on priorities

>30 visions and roadmaps developed with diverse sectors

MARKET STUDIESto understand and evaluate target markets

Analyses by McKinsey, Battelle, and other experts

ITP & PMC EXPERTISE to set priorities and evaluate proposals

>10 experienced PMC staff; merit review panels comprised of industry experts

POLICY ANALYSISto provide a framework for our activities

• Technology adoption factors

• Incentives• Carbon regulation

0%

20%

40%

60%

80%

100%

0 10 20 30 40 50 60 70 80

Mar

ket S

hare

(%)

Time from commercialization (years)

0%

20%

40%

60%

80%

100%

0 10 20 30 40 50 60 70 80

Mar

ket S

hare

(%)

Time from commercialization (years)

0

20%

40%

60%

80%

100%

2008 2010 2012 2014 2016 2018 2020 2022 2024

Estim

ated

Sha

re o

f Tar

get M

arke

t

Estim

ated

Num

ber o

f U

nits

in U

se

28

24

20

16

12

8

40

20%

40%

60%

80%

100%

2008 2010 2012 2014 2016 2018 2020 2022 2024

Estim

ated

Sha

re o

f Tar

get M

arke

t

BF/Coke Oven

PSH/SmelterEs

timat

ed N

umbe

r of

Uni

ts in

Use

28

24

20

16

12

8

4

28

24

20

16

12

8

4

Industry Visions & Roadmaps

Agenda2020

A Technology Visionand Research Agenda

for America’s Forest,Wood and Paper

Industry

Prepared by the American Forest & Paper Association

November 1994

TEEL

A N A T I O N A L R E S O U R C E F O R T H E F U T U R E

BEYOND 2000:A VISION FOR THE AMERICAN

METALCASTING INDUSTRY

SEPTEMBER 1995

Industry partners help identify opportunities, guide planning

Aluminum Portfolio Example: Bandwidth Analysis

Technical and Market Analysis• Aluminum Processing Energy

Benchmark Report (DOE/BCS, 2003)• Energy footprint (DOE/Energetics, 2006)• Energy and Environmental Profile

(DOE/Energetics, 1997)

Industry Input• Vision (Aluminum Association, 2001)• Roadmap (Aluminum Association, 1997;

updated 2001)• Aluminum Roadmap for the Automotive

Market (DOE, 2000)

Best Practices

Opportunity = 13.3

2002 Energy Intensity

Actual: 67.3

Practical Minimum: 15.3

Theoretical Minimum: 11.8

All values in million Btu/ton of aluminum

State of the Art: 54.0

R&D Opportunity

= 38.7

Disciplined Approach to Portfolio Management

AnalysisProject energy and carbon benefits annually to comply with the Government Performance and Results Act (GPRA)

PerformanceApply rigorous stage-gate processes Conduct periodic progress reviewsProvide strong oversight by the Project Management Centers

CommercializationEmphasize commercialization planning throughout R&D life cycleEnsure proactive industrial involvement and verify cost-sharing

Budget Decision-MakingBased on --- Available budget resources- Passing required stage gates- Market potential and impacts

STAGE 2 Concept

Definition

STAGE 3 Concept Develop-

ment

STAGE 4 Technology

Development & Info Verification

STAGE 5 Commercialization

and Info Dissemination

GATE 3 Proof of

Technical Feasibility

GATE 2 Research Approval

STAGE 1 Preliminary

Investigation & Analysis

GATE 1 Research

Project Selection

GATE 4 Proof of

Commercial Feasibility

Typical Solicitation Requirements

Commitment letters from industrial and other cost-sharing

partners

Subject to merit review in accordance with DOE procedures

Stage-gate: Meeting technical and business

requirements

Evaluation criteria and weighting:Market & technical objectives (25%)Energy, carbon, economic, and environmental benefits (25%)Commercialization plan and industry involvement (20%)Technical approach and project management plan (20%)Qualifications and resources (10%)

ITP Successes: Energy Technology Solutions

“ITP Product Catalog” highlights commercial and emerging technologies from recent years

• Public-private partnerships accelerate technology development

• All commercialization accomplished by private industry

• Many commercialization partners are small, entrepreneurial companies

Technologies commercially available:• Energy-intensive industries: ~60• Crosscutting: ~25

Knowledge-based results improving industrial processes today: ~15Technologies expected to enter the market within 3 years: >70

Super BoilerOpportunity: Generate steam with 95% efficiency vs. today’s best of 85%Barrier: Highly reliable boiler components, “low tech” package boiler industrySolution: New, gas-fired package boiler integrating advanced combustion concepts

and heat transfer with innovative waste heat and water recovery• 50% reduction in size and weight compared to

conventional boilers• 95% reduction in NOx emissions • Largest industrial energy application, representing

9% of US energy consumption • 200,000 large industrial boilers now >30 years old• Applications in most industrial subsectors• Demonstrations underway to validate performance

Industrial Partner: Cleaver Brooks

Mesabi Nugget Cokeless IronmakingOpportunity: Make blast-furnace-quality iron from low-quality

iron ore at low cost Barrier: Unproven technology concept for industry investmentSolution: Support pilot-scale demonstration of one-step

ironmaking process• Uses 30% less energy than blast furnace and reduces

emissions• Cost to Steel Dynamics, Inc. expected to be less

than cost of purchasing pig iron• Reshaping U.S. steel industry supply chain• $235 million plant now under construction

Industrial Partners: Mesabi Nugget LLC, Steel DynamicsOther Partners: State of Minnesota

Isothermal Melting of AluminumOpportunity: Melt aluminum (scrap and ingots) on-site at smaller aluminum

facilities and recyclersBarrier: Low efficiency of gas-fired furnacesSolution: Develop novel melting technology based on electrical conduction

• Potential to revolutionize aluminum melting by creating “mini mills”• Can be applied in all segments of the aluminum industry• Uses about 70% less energy than conventional

gas-fired melters• Successful test at General Motors facility

Industrial Partner: Apogee Technology

Market Transformation Reduce barriers that are due to

regulatory frameworks, inefficient business models, and lack of awareness on the part of

key constituents and stake holders.

Research & Development Maximize energy efficiency,

lower emissions, reduce component and system costs,

optimize fuel flexibility, and minimize waste streams.

Demonstrations Reduce technical risk and

validate full-scale performance in targeted applications and

untapped markets.

Combined Heat and Power

ORNL Report identifies promise of 20% CHP by 2030:

20 % of U.S. Electricity Generating Capacity 240,900 MWAnnual Energy Savings 5.3 QuadsAnnual CO2 Reduction 848 MMTAnnual Carbon Reduction 231 MMTNumber of Car Equivalents Taken Off Road 154 million

Exploit CHP’s potential through a balanced, strategic program that includes:

• 48 R&D 100 awards between 1991 and 2008

• Over 200 technologies commercialized since program inception

• 5.7 quads of energy saved• 103 MMTCe avoided

ITP Delivers Results

Slide Number 1Slide Number 2Slide Number 3Opportunities Across the Industrial Value ChainSlide Number 5Partnership is Critical to ITP’s SuccessRigorous Analysis Sharpens Focus on OpportunitiesIndustry Visions & RoadmapsAluminum Portfolio Example: Bandwidth Analysis Disciplined Approach to Portfolio ManagementTypical Solicitation RequirementsITP Successes: Energy Technology SolutionsSuper BoilerMesabi Nugget Cokeless IronmakingIsothermal Melting of AluminumCombined Heat and PowerSlide Number 17