Energy Utilization Efficiency and LEDs

Energy Utilization Efficiency

AEO 2015 Figure 19The graph labeled “Figure 19” [1] projects energy use in the U.S. per person (blue line) and per dollar of GDP (green line). The right hand portion of the graph (2013 – 2040) projects that annual energy consumption per American will remain rather constant, although well below consumption in 2005. Annual energy consumption per dollar of GDP, on the other hand, is projected to continue to decline. If this projection holds, only half as many watts of energy will be required to produce a constant dollar’s worth of GDP in 2040, as compared to 2005. Said another way, American energy utilization efficiency is projected to double over the period 2005 – 2040!

This improvement is a global phenomenon. The International Energy Agency (IEA) states its importance this way: [2]

“Energy efficiency in IEA member countries improved, on the average, by 14% between 2000 and 2015. This generated energy savings of 450 million metric tons of oil in 2015, enough to power Japan for a full year. These savings also reduced total energy expenditure by 540 billion United States Dollars in 2015, mostly in buildings and industry.”

$540 billion in efficiency savings sounds pretty good to me. But that’s for the whole world. Here is a more up close and personal example of what energy utilization efficiency can mean:

Lighting Industry Disruption

I have recessed lighting in the kitchen of my home. There are three ~ 5” diameter (BR-30) recessed fixtures and ten ~ 2.5” diameter (GU-10) recessed fixtures. I replaced the three 75 watt halogen bulbs from the larger fixtures and the ten 50 watt halogen bulbs from the smaller fixtures with size – equivalent LED bulbs. The larger LED bulbs each draw 9 watts, while the smaller bulbs each draw 5 watts. Right: a total of 77 watts of power draw replaces a total of 775 watts – nearly a 10 to 1 improvement.

LED Lighting DisplayActually, there is a lot more to LEDs beyond reducing your electric bill, welcome as that is. The LED value proposition offers at least these features:

  • Bulb prices are now competitive with older technology. [3]
  • Bulb service life expectancy is several times longer than older technology.
  • Significantly lower power requirements.
  • Much less heat generation.
  • Bulbs are readily available in many form factors.
  • Available in several color spectra.
  • Available with an increasing number of intelligent control alternatives – bulbs and fixtures.

The case for LEDs is so strong that Greentech Media, [4] referencing a report from Goldman Sachs, says:

“The financial institution calls LEDs one of the fastest technology shifts in human history. While wind and solar are challenging the traditional electric generation sector, they have not upended it yet the way LEDs have overtaken the lighting industry. By 2020, LEDs will make up 69% of (lighting) sales and close to 100% by 2025, up from nearly nothing in 2010.”

Best of all, LEDs are an emerging technology, which will continue to evolve. Expect continuing improvements in energy utilization efficiency (it can, and will, get considerably better than the 10 to 1 improvement in my kitchen lighting). Even more importantly, expect completely new ideas as LEDs evolve from replacements in existing sizes and forms to become the creative media of the lighting industry.

Thoughtful comments and experience reports are always appreciated.

…  Chuck Harrington (

This blog and associated website ( are intended as a resource for smaller manufacturers in the pursuit of Sustainability. While editorial focus is on smaller manufacturers, all interested readers are welcome.

[1] “Figure 19” is from the 2015 Annual Energy Outlook, published by the Energy Information Agency, a service of the U.S. Government.

[2] Energy Efficiency Market Report 2016, International Energy Agency, page13.

[3] As the snapshot of an LED retail display at my local Home Depot indicates, common residential replacement bulbs are readily available for a few dollars.

[4] See , which refers to a Goldman Sachs report at

Energy Outlook for Smaller Manufacturers

Annual Energy Outlook 2015

The Energy Information Administration, a component of the U.S. government, publishes an Annual Energy Outlook. The AEO compiles data on energy production and consumption in this country, and then projects corresponding figures for the future. This year’s edition, AEO 2015, projects as far as 2040. [1]

AEO 2015’s projections are centered on a Reference Case. “Reference Case” is essentially a “business as usual” case, which extrapolates the past and present while considering changes that are already locked in. “Locked in” changes include projected population growth, GDP growth and effects of laws already in place. For example, Reference Case projections for gasoline consumption in 2025 consider how many vehicles will be on the roads in 2025 and the age distribution of those vehicles. Compliance with the CAFE fuel consumption mandates is assumed, since CAFE is existing law. The Reference Case does not consider legislation that is not yet law, nor does it anticipate technological innovations.

Here are some figures and projections from the AEO 2015 of particular relevance to smaller manufacturers:

Projected Growth for Manufacturers

AEO 2015 Fig 2The chart labeled “Figure 2” projects average annual industrial output growth rates for the period 2013 to 2040. Almost all smaller manufacturing firms fall within the “Nonenergy- intensive manufacturing” subsector – the second group of three bars on the chart — which are the best of the four subsectors presented. As you can see, the Reference Case projects an annual growth rate of about 2.4%, with a high of about 3.2% and a low of around 1.7%, depending on the overall growth rate of the U.S. economy.

Energy Utilization Efficiency

For most smaller manufacturers, direct energy consumption means electricity and, perhaps, natural gas or other fuel for process and facilities heating. AEO 2015 Fig 19However, most firms also consume substantial amounts of energy indirectly – transportation and raw materials come quickly to mind. So, energy utilization efficiency matters well beyond your electric bill.

The chart labeled “Figure 19” projects continuation of a strong trend toward improving energy utilization efficiency within the U.S. economy. As you can see, energy consumption per dollar of GDP is projected to reduce by nearly half by 2040. Energy utilization efficiency means energy not used and not paid for. It also means that CO2 emissions to the environment per dollar of GDP decrease in lock step. For free.


AEO 2015 Fig 10The chart labeled “Figure 10” projects energy consumption for transportation. Energy consumption for the fleet of light-duty vehicles expected to be on the road in 2040 is projected to be substantially less than that of the corresponding fleet on the road in 2013. The energy consumed by heavy-duty vehicles and by air transport is projected to be rather sharply higher. Since your firm likely ships and receives materials and supplies by truck or (groan) by air, this difference matters. There are a lot of interesting things being done to improve energy utilization efficiency in these transportation sectors. Since you pay the freight – one way or another – it does matter.

Energy Autonomy

Operating in the globalized 21st century requires a remarkably broad scope of management attention, even from small manufacturers. It is not enough to work in your business. Managers today have to keep one eye on the entire world.

Capture - AEO 2015 - Fig 20 Total Energy Production vs ConsumptionThat’s why the chart labeled “Figure 20” is, in my mind, perhaps the best economic news in the entire AEO 2015. For the last four decades, U.S. foreign policy has been driven by access to imported energy. The costs due to energy supply interruptions, the costs of international cartel pricing and the military costs of assuring access to foreign fuels have all been simply enormous. Closing the gap between U.S. energy production and consumption provides control over those costs and allows the U.S. to redirect foreign and domestic policy in more fruitful directions. It also makes life easier for American manufacturers.

Chuck - VancouverThoughtful comments and experience reports are always appreciated.

…  Chuck Harrington (


P.S: Contact me when your organization is serious about prospering in the globalized 21st century … CH

This blog and associated website ( are intended as a resource for smaller manufacturers in the pursuit of Sustainability. While editorial focus is on smaller manufacturers, all interested readers are welcome. New blog posts are published weekly.

[1] The 154 page Annual Energy Outlook 2015 is available for free download at AEO 2015 is worth reading.


Appreciating Negawatts

Amory Lovins and the Rocky Mountain Institute

I’m a fan of Amory Lovins and the Rocky Mountain Institute he co-founded. Amory is a thought leader in the field of energy and its application. The Rocky Mountain Institute calls itself a “think and do” tank. The RMI doesn’t just think about and write about energy. They demonstrate and apply that which they think about and write about. They’re not about incremental improvement. They think big and they deliver big.

But first, some terms:

>> What’s a Negawatt?

The term “negawatt” began as a typographical error in a paper on electric power – the writer meant “megawatt”. Amory Lovins capitalized on the typo and used it to mean “a unit of energy not used”. For example, an ordinary 100 watt light bulb emits 1600 lumens of light, while consuming – you guessed it – 100 watts of electricity. A compact fluorescent light bulb that emits the same 1600 lumens consumes only 23 watts of electricity. So, changing from an ordinary incandescent 100 watt bulb to its fluorescent equivalent results in (23 watts – 100 watts) = 77 “negawatts” of electricity not consumed.

>> Energy Intensity?

The term “energy intensity”, as used in this post, means the amount of energy consumed in order to produce a unit of output. For a nation, “energy intensity” could refer to the energy consumed to produce a dollar of gross domestic product (perhaps expressed as quadrillion BTUs per trillion dollars of GDP). For a manufacturer, “energy intensity” could refer to energy consumed to produce a unit of production (perhaps kilowatt-hours per widget, or kilowatt-hours per pound of product).

Supply & Demand

For a factory, a nation or the entire globe there are two ways to power incremental production: consume more energy or improve energy efficiency – megawatts or negawatts. There are several good reasons to prefer demand side energy solutions (negawatts) to supply side solutions (more fuel, more megawatts):

  1. Energy security: access to energy is increasingly used as an economic weapon. The oil embargo of the 1970’s is one example. Russia’s recent threat to withhold natural gas deliveries to European nations is another. Instances of short supply – deliberate or otherwise — are another. Efficiency improvements (negawatts) are immune to such uncertainties. Negawatts are also immune to fluctuation in the price of fuels.
  2. Industrial competitiveness: Markets for fuels are regionally diverse, especially when costs for delivery are included. Energy intensity improvements provide a hedge on local fuel price and access issues.
  3. Decarbonization: Utilities and manufacturers continue to be pressured to reduce carbon (primarily CO2) emissions. Negawatts emit no CO2.
  4. Atmospheric pollution: Negawatts do not involve combustion or other processes that create atmospheric pollutants, such as oxides of nitrogen or oxides of sulfur. No pollutants = no pollution.

Energy Efficiency: The Secret Revolution, a recent essay by Amory Lovins, says that the supply side (the megawatts) gets the hype, while the demand side (the negawatts) is really making the difference. Here are some examples from Amory’s essay and from other recent sources:[i]

>> Due to the emergence of fracking (supply side), petroleum production in the U.S. during the period 2004 – 13 increased enough to displace oil imports equivalent to 10% of U.S. domestic consumption. At the same time, less driving plus more efficient vehicles displaced the equivalent of 18% (demand side)!

>> In 2012, weather-adjusted electric energy intensity improved by 3.4% in the U.S. – about six times more than the increase in non-hydro renewable electricity capacity.

>> For the 11 IEA member countries improvements in energy intensity over the period 1974 – 2010, the groups’ 2010 GDP would have required 65% more energy, had energy intensity remained at 1974 levels.

>> Amory Lovins’ essay emphasizes that: “We’re using less than half the energy (and emitting less than half the carbon) we would be if today’s economy had 1975 energy intensities. But that is only a fraction of the savings now available and worthwhile.”

>> 2012 global market for energy efficiency enhancements was US$375 billion – about 1.5x the amount invested in renewable energy.[ii]   (au / HSBC)

>> In each $ billion in global GDP required almost 40% less energy than it did in 2001.[iii] (au/HSBC)

>> More than ¾ of global new car sales are subject to energy efficiency standards (IEA)[iv]

For Smaller Manufacturers

>> Amory Lovins’ essay concludes: “How low can we go in the efficiency limbo? Nobody knows – but we’re far from any practical limit, and frontiers keep expanding. Every gain in super thermostats and super windows, in LEDs and motors, in process equipment and in computers, locks in more ‘negawatts’ that further reduce our energy intensity.” The logical place for a manufacturer to start lowering and stabilizing energy costs is with an energy utilization efficiency audit. The audit will allow you to identify, quantify and prioritize opportunities in your business. Still a No Brainer! — an earlier post to this blog – explains how.[v]

>> As a result of fracking, manufacturers in the U.S. may hold a competitive advantage in energy costs, compared to other countries. As a consequence, American manufacturers using petroleum based feedstocks, as well as those that are even mildly energy intensive should reassess opportunities for export.

>> Amory Lovins and the RMI staff have published Reinventing Fire, a treatise on how to make substantial improvements in energy efficiency.[vi] The book contains a wealth of well thought out, reasonable ideas that make good business sense. Reinventing Fire should be required reading for all manufacturing managers, large or small. Returning Fire, an earlier post to this blog, reviews the book, especially the industrial section.[vii]

Chuck - Red Rocks3Thoughtful comments and experience reports are always appreciated.

…  Chuck Harrington


P.S: Contact me when your organization is serious about pursuing Sustainability … CH

This blog and associated website ( are intended as a resource for smaller manufacturers in the pursuit of Sustainability. While editorial focus is on smaller manufacturers, all interested readers are welcome. New blog posts are published weekly.

[i] Lovins’ essay is available at

Note: The examples cited are from Lovins’ essay unless otherwise indicated.

[ii] This example is from

[iii] This example is also from

[iv] This example is from

[v] For more on energy efficiency audits, see Still a No Brainer!

[vi] E. Lovins and the Rocky Mountain Institute, Reinventing Fire, Chelsea Green Publishing (2011)



Still a No Brainer!

Energy Utilization Audits

A previous post to this blog urged manufacturers to conduct a low cost energy utilization audit. Audits find opportunities for improvement, and improvements in energy utilization — finding negawatts [1]results in reduced CO2 emissions, while benefitting your bottom line on the hurry-up. That post — Energy Utilization Audit – a No Brainer — is reproduced below, in case you missed it.

In my view, a Green product needs to offer some tangible benefit to the buyer which results from the Green part of that product’s value proposition. Now, manufacturers of industrial equipment  [2] are competing on the basis of the energy efficiency of their products [3]. So, as new Greener (more energy efficient) industrial equipment becomes available, manufacturers in all industries can improve their energy utilization efficiency. And, as new equipment continues to offer higher efficiency, the beat goes on.

Energy Efficiency Audit – A No Brainer

From 5 October 2011

When I was in Europe about a year ago, gasoline prices were about $7.00 a gallon. That was a rather rude reminder that we in the U.S. are all used to much lower power costs than in most of the developed world. Because power has been inexpensive for as long as any of us can remember, Americans are much less conscious of power usage than are people elsewhere. That applies to manufacturing, as well as to automobiles. The power consumption per unit production in Europe or in Japan is considerably lower than in comparable American factories.

Just about everybody in any manufacturing facility will tell you, quite honestly, that they have always been careful and conscientious about energy utilization. Even so, high ROI energy intensity reductions of 20% or more over two or three years are rather commonplace. The math is easy, and the cost reduction is on-going, year after year, even increasing as the unit cost of power increases.

The best way to start is with an energy utilization audit, so that you can identify, quantify and prioritize opportunities for improvement, and associate those opportunities with reasonable assessments of the costs involved. There are several ways to do this:

>> Call your local Manufacturing Extension Partnership office (see for contact information). Your MEP office can either conduct the audit or locate a qualified local professional with expertise relevant to your particular industry.

>> Some electric power utilities will either conduct an audit for you, or help you have one done. Talk to your power supplier.

>> The Department of Energy will conduct a free one-day audit for you, if you meet the Small Business Administration’s definition of a “small” business (usually less than $100 million annual revenues and less than 500 employees). You also need to be located within 150 miles of one of DOE’s Industrial Assessment Centers. There are 24 Industrial Assessment centers in the U.S. These audits are usually conducted by people associated with a University. Check in at: Take time to look around this website. It contains a lot of useful information.

>> There are many private firms in the industrial energy auditing business. Check on the web.

>> You can conduct a preliminary audit in-house, if you would prefer. The Bonneville Power Administration offers a free 52 page Industrial Audit Guidebook with checklists at The Audit Guide is thorough enough to get you started. However, you may want to follow-up with a more specific audit, depending on what you learn from using the Bonneville materials.

An energy intensity reduction program is one of the best things you can do for your firm, especially since so much free or low cost assistance is available. Power bill reductions go directly to the bottom line. And the environment benefits through reduced greenhouse gas emissions.

Everybody knows that energy utilization improvement goes well beyond turning off lights. And opportunities for improvement are continuing to increase. Increasingly, the energy efficiency of your production processes is joining the materials efficiency and the labor efficiency as a key component of manufacturing cost effectiveness. Don’t pass on a no brainer.

Chuck Reading 2 - 27 July 2011Thoughtful comments and experience reports are always appreciated.

…  Chuck Harrington (

Note: This blog and associated website ( are intended as a resource for smaller manufacturers in the pursuit of Sustainability. While editorial focus is on smaller manufacturers, all interested readers are welcome. New blog posts are published weekly.


[1] See Negawatts – Waging War on Waste, this blog,—waging-war-on-waste/

[2] Energy efficient electric motors and variable frequency AC drives came quickly to mind as examples.

[3] Also read about the EPA’s Energy Star program and how that program affects smaller manufacturers. See: