Navigant Research Blog

Are Corporate Clean Energy Initiatives Real?

— December 10, 2014

In November, Amazon made a commitment to power its infrastructure with 100% renewable energy over the long term.  Among tech companies, Amazon is late to the game in announcing its sustainability goal; Apple, Google, and Facebook had already released similar pledges over the past few years.  Although cloud computing is more environmentally friendly than previous computing technologies, according to Amazon, a “significant amount of unused server capacity and wasted energy consumption” still occurs when powering data center infrastructure.

Since 2008, businesses and corporations around the world have begun to more actively pursue sustainability initiatives.  Between 1992 and 2012, the number of corporations worldwide issuing corporate social responsibility (CSR) reports jumped from 26 to around 7,500.

Fortune 500 Leads the Way

Many of the leaders in corporate sustainability are part of the Fortune 500.  In 2013, 43% of Fortune 500 companies had established goals for greenhouse gas (GHG) reductions, energy efficiency, renewable energy, or some combination of the three, and 60% of Fortune 100 companies had set sustainability targets.  Although large corporations have made progress in establishing sustainability initiatives, only 75 of the Fortune 500 had specific energy efficiency targets in place by 2013.  GHG reduction targets made up the greatest share of climate and energy initiatives.

Companies with long-standing commitments to reducing energy use have already seen energy and dollar savings from these initiatives.  Walmart, for example, laid out plans in 2013 to save $1 billion globally per year through energy efficiency and renewable energy programs.  The company has a long-term aspirational goal to achieve 100% renewable energy.  In the shorter term, by the end of 2020, Walmart aims to reduce emissions intensity by 30% from 2010 levels and produce or procure 7 billion kWh of renewable energy worldwide.

The Trouble with Long Term

Kohl’s is another leader in corporate sustainability efforts.  It has been implementing green building methods since 2005, and it had 432 LEED-certified stores as of June 2014, representing a full 37% of the company’s 1,160 stores across the United States.  The 432 stores represent a total floor space of 35,616,240 square feet.  Kohl’s plans to reduce absolute emissions and emissions intensity on a per-square-foot basis by 20%, both by 2020, compared to 2010 levels.

Although the growing prevalence of CSR and sustainability goals is encouraging, broad long-term goals have raised concern from some environmental groups.  Setting goals without defined milestones makes it more difficult to hold companies accountable for the clean energy initiatives they have in place.  Many companies, Amazon included, have not specified a roadmap to achieve their energy goals – an obvious next step to ensure those goals are achieved.  Publicly committing to a clean energy future is only a first step.

 

Energy Efficiency Transforms HVAC

— December 2, 2014

The federal requirements for heating, ventilation, and air conditioning (HVAC) systems are about to become much stricter.  Starting January 1, 2015, residential split system heat pumps, single package air conditioners, and single package heat pumps in the United States must have seasonal energy efficiency ratios (SEERs) of 14, an 8% increase in efficiency over the current SEER requirement of 13.  The SEER rating is used to gauge the operating efficiency of cooling systems.  It is the ratio of the cooling output of equipment over a cooling season divided by the electrical input.  Indeed, driven in part by tightening regulations but also by a larger push toward greater energy efficiency, HVAC equipment is undergoing substantial changes.  When minimum SEER requirements increased in the United States from 10 to 13 in 2006, innovations in compressors, refrigerants, and system design drove efficiency improvements.  Today, several air conditioner options provide efficiency in excess of 20 SEER.

Unfortunately, there are natural limitations on efficiency gains that can be made on current equipment.  As a result, new, more efficient HVAC equipment, such as variable refrigerant flow (VRF) systems, is gaining market share in the United States.  VRF systems represent a paradigm shift in how heat is transferred throughout a building and can provide energy savings of 34% compared to current HVAC solutions.  Originally developed in Asia, the technology is now gaining market share in the United States.  Though Asian-based companies dominate VRF manufacturing, the landscape is shifting through joint ventures, such as Johnson Controls’ yet-to-be-finalized tie up with Hitachi, and through the establishment of manufacturing operations in the United States, such as Daikin’s American manufacturing line in Houston.

Further Changes Ahead

Future gains in efficiency can still be gained through better control and wider adoption of currently available equipment.  However, some are looking even deeper at reducing the energy consumption of HVAC systems.  Currently, HVAC equipment ejects heat from a building into its surroundings.  Dr. Aaswath Raman, a research associate at Stanford University, is developing technology to dump unwanted heat into outer space.  Dr. Raman has engineered a material capable of manipulating the energy levels of the light it reflects so that sunlight can be reflected and transformed to a wavelength that sends it out of Earth’s atmosphere.   In effect, it can transfer the heat generated in a building by the sun to the much larger and much cooler heat sink of outer space.  Initial tests have demonstrated that Raman’s material can maintain a 4.9°C temperature difference between a box coated in the material and the outdoors.  If deployed in buildings, the impact on HVAC requirements would trigger a new wave of innovation in HVAC equipment.

For a more detailed look at how the HVAC market is changing, please join Navigant Research’s free webinar, Innovations in Heating, Ventilation, and Air Conditioning, on Tuesday, December 9, 2014 at 2 p.m. EST.   Click here to register.

 

Automation Gives Manufacturers an Energy Boost

— October 17, 2014

According to the U.S. Manufacturing Purchasing Managers’ Index, a measure developed by financial research firm Markit, manufacturing activity in the United States in September reached its highest point in more than 4 years.  Factory employment, though still well below pre-2008 levels, reached its highest level since March 2012.

U.S. manufacturers are getting a boost from low energy costs, driven primarily by the bonanza of low-cost natural gas (and, to a lesser extent, by distributed renewables, often onsite at plants).  But what’s going on inside U.S. plants is equally important.  Increased energy efficiency, enabled by a revolution in process automation technology, is also helping U.S. manufacturers compete with manufacturers that enjoy low-cost labor in developing countries, particularly China.

Excess No Longer Success

Since peaking around 1999, the primary energy use in the U.S. manufacturing sector has declined steadily, according to the American Council for an Energy-Efficient Economy, from about 35 quadrillion BTUs annually to less than 31 quads.  Energy intensity – the BTUs used per dollar value of shipments – has declined even more dramatically.

The shift is coming as a shock to old-line factory managers unused to calculating energy as a key metric of efficiency and productivity.  “No one ever got fired for purchasing a pump or a machine that’s too big for the job,” said Fred Discenzo, manager of R&D at Rockwell Automation, at a recent energy management conference in Akron, Ohio.  In manufacturing, “excess capacity has always been the safe option.”

Rockwell is among an emerging segment of technology vendors that is trying to change that, through what it calls “the connected enterprise.”  What that means is connecting the factory floor to the C-suite with far greater visibility and immediacy than before.  Another name for this change might be “extreme granularity.”  In the near future, energy use will be measured not at the factory or line or machine level, but at the individual process level, per unit of production: how much energy did it take to make this widget or valve or bag of ice, and where in the process can that energy use be optimized?

The Next Revolution

Advances in factory floor networks, wireless sensors, virtualization, and monitoring equipment are enabling these improvements in manufacturing efficiency, energy conservation, and quality control.  These twinned revolutions – cleaner, cheaper, more distributed energy coming into the plant and sophisticated automation technology reducing energy intensity inside the plant – will result in changes that have far-reaching implications for the manufacturing sector, and for the economy.  “The new era of manufacturing will be marked by highly agile, networked enterprises that use information and analytics as skillfully as they employ talent and machinery to deliver products and services to diverse global markets,” concluded a 2012 McKinsey study entitled Manufacturing the Future.

At 32% of total energy consumption, industry uses more energy than any other sector of the U.S. economy.  Manufacturers that adapt to the new realities of energy, by changing the ways in which they source and use electricity, will be more competitive on the global stage – and could help usher in the new economic upswing that politicians and analysts have been dreaming of for years.

 

From Commonplace Materials, Shigeru Ban Creates Uncommon Shelters

— September 8, 2014

Japanese architect Shigeru Ban’s first museum in the United States opened last month in Aspen, Colorado.  An internationally renowned architect and the recipient of the 2014 Pritzker Prize, which is often referred to as architecture’s Nobel Prize, Ban is distinguished from his peers by his commitment to humanitarian work and sustainability.

Since 1994, Ban and a team of volunteers have responded to a number of disasters worldwide with innovative architectural solutions.  They constructed relief housing in response to the 1999 earthquake in Turkey, to Hurricane Katrina in 2005, and to the 2011 earthquake and tsunami in Japan.  Ban uses inexpensive, often recycled materials to construct innovative shelters in an economically and environmentally sustainable way.  These structures dispel preconceived notions of the aesthetics of disaster relief shelters with their simple, clean designs.

In Onagawa, Japan, Ban converted old shipping containers into housing for people who lost their homes in the 2011 disaster.  The earthquake and flooding left little flat land, which Ban addressed by stacking the shipping containers to make three level multi-family units.   One of Ban’s earliest projects was in response to the 1994 civil war in Rwanda that left millions homeless.  Ban worked with the United Nations High Commissioner for Refugees (UNHCR) to develop refugee shelters, using low-cost paper tubes as an alternative to wood in an area that had suffered rapid deforestation.

Minimalism in a Time of Excess

What makes Ban’s work particularly interesting from an energy standpoint is his dedication to using locally and sustainably sourced materials.  The new Aspen Art Museum is constructed from materials ranging from paper tubes to beer crates, and all the wood involved in the project was sustainably sourced.  Fellow architects have called Ban a “socially responsible” or “socially conscious” architect who prizes sustainability above all.  But despite Ban’s focus on reusing materials and minimizing waste, he rejects labels such as green and eco-friendly.

Although Ban is the best-known philanthropic architect, lesser-known builders and organizations are working in a similar capacity, creating a small but growing movement.  For example, the U.K. charity Architecture Sans Frontières, emulating the model pioneered by Doctors without Borders, is spreading sustainable architecture and responsibly built environments to marginalized or impoverished communities around the world.  In the United States, the organization Make it Right, created after Hurricane Katrina, enlists architects who donate their time to create cradle to cradle homes that produce more energy than they consume.  Natural disasters, political turmoil, and war will continue to displace people from their homes, and the innovative architectural designs by Ban and others can help keep them from crowded and unsanitary refugee camps.

 

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