A simple truth: Energy efficiency is good for manufacturers’ bottom lines

(greenbiz.com, 5 Sep 2018) If a manufacturer can produce the same amount of product using less energy, why wouldn’t it? The strategy makes perfect economic "cents": If a company spends less on energy, it will have more resources available to expand output, to pay its employees or to invest in researching and developing new products.

Earlier this summer, my organization decided to find out if manufacturers have discovered this simple truth. We examined 160 of the nation’s largest companies from industries as diverse as health care and apparel to chemicals and the automotive sector to find out their various levels of commitment to energy efficiency. Our research found that 69 of these companies (43 percent) clearly recognize the benefits of energy efficiency and have established robust public targets to reduce power consumption.

Energy efficiency may not have popular appeal like strategies for procuring wind or solar electricity. But for companies that want to save money — and reduce greenhouse gas emissions in the process — energy efficiency is an essential part of the business plan. Remarkably, we found that more companies have set energy efficiency targets than renewable energy goals. With good reason: The cheapest energy is the energy you don’t have to produce in the first place. In short, energy efficiency is good for the bottom line.

Our conversations with manufacturers certainly back this up. ArcelorMittal, the world’s largest steel producer, reports annual savings of $257 million from energy-saving technologies at its U.S. facilities. Cummins, a major U.S. manufacturer of heavy-duty engines, components and power generators, estimates that the company has saved $40 million to $50 million each year through its energy efficiency efforts. Agri-food processor Cargill has slashed energy use by 16 percent since adopting targets in 1999, generating annual savings of more than $100 million in energy costs. (Editor's note: You can learn more about all three companies' efficiency programs as part of a Sept. 6 webcast organized by Ceres and the Alliance for Industrial Efficiency.) 

These leaders are not alone. In fact, the 190 companies in the Department of Energy’s Better Plants Program collectively have saved $4.2 billion in energy costs through energy efficiency programs. That’s $4.2 billion that can be used to make better products and to build a better economy for U.S. businesses.

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greenbiz.com, 5 Sep 2018: A simple truth: Energy efficiency is good for manufacturers’ bottom lines