Alabama jumpstarts its Save Energy Now program, new E3 initiative

Alabama has been providing energy assessments to reduce consumption in local industries since 2005. As industry in Alabama has grown, the Energy Division of the Alabama Department of Economic and Community Affairs (ADECA) has realized the increasing importance of industrial energy efficiency, and has leveraged both state and federal support in recent years to support local industry in their efforts to reduce energy consumption. ADECA was awarded a three-year U.S. Department of Energy (DOE) Industrial Technologies Program (ITP) Save Energy Now grant in 2009 to jump-start a self-sustainable state program.

ADECA is collaborating with the Alabama Technology Network (ATN) and the Alabama Industrial Assessment Center (AIAC) to provide energy and lean assessments to Alabama manufacturers as one of the primary objectives of the program. ADECA and its partners are also using the grant to support the Alabama E3 (Economy, Energy, Environment) initiative, which helps communities work with their manufacturing base, providing customized, hands-on assessments of production processes to reduce energy, minimize carbon footprint, prevent pollution, increase productivity, and drive innovation. Alabama's E3 program — one of the first E3 pilot programs in the nation — is currently focusing on the automotive supply chain. ATN is an important partner in Alabama's E3 efforts and has been working with manufacturers to help them become more competitive. Through their efforts, they came to the realization that companies succeed in implementing energy efficiency projects if services are considered in a comprehensive way rather than simply pointing to solutions. ATN has also concluded that the best solutions are often in the integration of services, such as economic, environmental, and energy services. The close partnership between ADECA, ATN and AIAC, and their involvement in Alabama's Save Energy Now and E3 programs, are allowing complementing principles and practices to thrive, ensuring that both are operating a best practice program.

Leveraging Grant Funds to Expand Alabama's Save Energy Now Program
By building this strong network of support for delivering industrial energy efficiency savings, Alabama's Save Energy Now program has been able to hit the ground running. ATN will perform 15 Practical Energy Assessments for Alabama manufacturers (primarily automotive suppliers) and is providing another 17 Lean Assessments, all in conjunction with 17 additional energy assessments that will be completed by AIAC under the grant. To date, ATN has completed six of the 15 Practical Energy Assessments and AIAC has completed 4 of its 17 anticipated annual energy assessments. In conjunction with each of these 10 completed assessments, ATN has completed an accompanying Lean Assessment. Energy cost savings identified across the six Practical Energy Assessments total more than $265,000, and $159,336.

Alabama is not only utilizing its Save Energy Now award to launch a state industrial energy efficiency program, but is working to expand the program by leveraging state, federal, and local funding. ATN recently secured $140,000 in funding from the Tennessee Valley Authority (TVA) to provide Practical Energy training programs for TVA utility clients. In addition, ADECA has been able to secure State Energy Program American Recovery and Reinvestment Act of 2009 funding in order to provide 40 Kaizen implementation events, focusing on improving a manufacturer's productivity, and to establish a $25 million Alabama Energy Revolving Loan Program. This will allow manufacturers to follow up on findings from the assessments performed through Alabama's Save Energy Now program. ATN also recently received State Energy Sector Partnership (SESP) funding to support Practical Energy training programs for manufacturers in the Tuscaloosa region, and AIAC received SESP funding to support a DOE Qualified Specialist (QS) training in conjunction with Alabama Power Company (APCo). The QS training will be offered under Alabama's Save Energy Now program. AIAC and APCo were successful in securing a supplemental award to provide a broader range of training courses. Together, these projects compliment and strengthen the Alabama Save Energy Now program.

Alabama's E3 Program
Alabama's E3 program is managed by ATN, which is funded by the State of Alabama and the U.S. Department of Commerce's National Institute of Standards and Technology Manufacturing Extension Partnership. The program offers clients integrated solutions that ensure sustainable manufacturing, by not only offering traditional lean but also considering energy use and environmental wastes, which can make up 40 percent of cost savings for a company. The E3 program is one of the first E3 pilot programs in the nation. Alabama has engaged more than 20 partners from federal, state, and local agencies that are critical to the success of the program. The partners offer a tactical advantage for long-term program stability in terms of service, delivery, and political support. ATN's success in receiving the funding for the workforce component of the program was impacted by the strength of the partnership. This is a very positive and unique feature of the Alabama E3 program. It is a comprehensive program that includes four components:

1. Lean, energy and environmental assessments
2. Lean and green implementation projects based on the results of the assessments
3. "Green" skills training:
   • Level One training for all employees to introduce them to sustainability and make them aware of their roles and responsibilities in saving energy and reducing wastes in their companies
   • Level Two training for certain employees based on the individual needs of the companies (Practical Energy, Waste Reduction, certifications, ISO 14001, etc.)
4. Counseling and assistance from the Small Business Administration (SBA) and Small Business Development Centers to help eligible companies access affordable funding/financing (e.g., Alabama Energy Revolving Loan, SBA loans, etc.) to support new systems/equipment necessary to reduce energy and reduce costs.

The Alabama E3 program is currently focused on improving energy efficiency among automotive suppliers for Alabama's three main auto manufacturers—Mercedes, Hyundai, and Honda. To date, the E3 program has successfully completed three lean and green projects with ZF Industries (gearbox manufacturer), Electrofil (electrical component), and Fleetwood Metals (a metal stamping and welding company). Improving these companies' productivity and cost competitiveness benefits both the suppliers and the manufacturers. By becoming more competitive, the automotive manufacturers are able to become more profitable, thereby strengthening the Alabama economy. By making an effort to help the automotive suppliers, the E3 program will improve the economy of the state as a whole, in addition to supporting state energy and environmental goals.

The initial assessment and lean and green project funds for the E3 program focused on automotive manufacturers, totaling more than more than $800,000. ADECA has also secured a $578,000 grant for the workforce component of E3 through the U.S. Department of Labor.

At this year's Gulf Coast Industrial Energy Efficiency Forum, five Alabama companies were recognized by ITP for their energy-saving achievements — vonGal Corporation, 3M, EGS Electrical Group, Rusken Packaging and W.R. Grace and Company. Both Alabama's Save Energy Now and E3 programs offer opportunities for even more Alabama manufacturers to join this list. The expanding number of training and assessment resources offered through these programs allows Alabama's industry to work with the state in new and effective ways to improve energy efficiency and competitiveness. Alabama's early Save Energy Now program successes indicate promising results for the future of industrial energy efficiency in the state and offer an excellent model to be replicated in other parts of the nation.

This article appeared in Energy Matters, the newsletter of the U.S. Department of Energy's Industrial Technologies Program.