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Kentucky industries share best energy conservation practices in advance of increasing costs

By Dawn Marie Yankeelov

Published in The Lane Report, Kentucky’s state business magazine.

Energy conservation is rising into vogue in the state and across the nation as slowly comes the sunset of the long days of dirt cheap electric bills.

The 2nd Annual Kentucky Association of Manufacturers' Energy Conference held June 13-14 in Louisville, underscored the continued tightening of resources by highlighting a cry for energy efficiency throughout the manufacturing sector.

"The message to Frankfort is that rates are only going up. Where are the continuing tax incentives to keep manufacturing facilities here through conservation?" said Tom Abele, vice president of business development at Harshaw Trane.

An ENERGY STAR services and product provider and a founding member of the Kentucky U.S. Green Building Council, Harshaw Trane offers comprehensive energy evaluations and energy saving solutions.

The locally owned company, one of the top sponsors of the KAM event, has developed its intelligent energy monitoring program to reduce operational costs and improve production.

"It feels like we can do something for manufacturing through energy security measures - making energy more secure and stable," said firm President Frank Harshaw.

A major client is Fort Knox, the fifth largest electricity user in the state, which now is one of just a handful of U.S. military bases already ahead of the changing energy use curve (see The Lane Report's July 2011 cover story "The Gold Standard for Energy Systems"). Since 1998, the base has almost halved its energy demand through efficiency measures.

Army posts intend to be more independent from the energy grid, aiming to run all base emergency functions as part of an energy security mission. Energy Program Manager Robert "R.J." Dyrdek said the 2009 ice storm in Kentucky showed Fort Knox officials how the base could be crippled otherwise.

Toyota, an even larger power consumer than the military base, also is taking on comprehensive energy conversation measures.

The most highly attended energy savings presentation at KAM's two-day conference was by Carl Kurz, assistant general manager for facilities control at Toyota's manufacturing plant in Georgetown, the Japanese multinational's largest foreign operation.

Ideas from Kentucky go worldwide

"Almost from the beginning (1988), the plant started tracking its energy use and how and where we need it," Kurz said. "This might be in, say, air compressors, HVAC or steam use. Lighting was re-examined to move toward LED replacement or plasma-type lights."

After determining that TMMK's boilers were very inefficient, the company localized its water heaters and realized a $1.5 million savings and reduced maintenance needs. Toyota then implemented this strategy all over the world, Kurz said.

After examining the energy system that heated water into steam for car painting, Toyota created a process that today requires no steam, with a tremendous cost savings.

"Reducing our carbon footprint is the next hurdle for Toyota," Kurz said.

Alternative technologies are on the table. The company is testing solar panels, examining photovoltaic-cell technology use and has a landfill waste gasification project. Toyota composts to create mulch, which is used for growing flowers on-site and for a 10-acre vegetable garden that provides produce to the Hope Center homeless shelter in Lexington.

"In part, we have done so well in energy efficiency in the Kentucky plant because we are a Japanese company that looks at all measures," Kurz said. "We share information across all our plants. By applying new thinking patterns internally, we are able to find more energy gains."

All Kentucky manufacturers should take a lesson from Fort Knox and Toyota, Abele said. Without gaining better control over the demand side of the power consumption equation, the result could be energy cost increases that force companies operating in the commonwealth to move overseas.

"A reduction in jobs here would be devastating," Abele said.

Efficiency is a 'fuel' source

On the supply side, suggestions proposed in statewide discussions include building new coal-fired power plants that are more environmentally efficient, using natural gas produced from shale formations, and reductions in fuel utilization. There could be a "dash to gas" in many regions, according to Rodney Andrews, director of the University of Kentucky Center for Applied Energy Research.

The center's Biofuels and Environmental Catalysis Group investigations are focused on reducing the environmental impact of fuel use and developing renewable fuel sources. Its new $19.8 million open-access laboratory is available to all Kentucky biofuels researchers.

CAER tenant Power Generation and Utility Fuels Group is developing viable technologies for producing clean electricity and biomass. In 2011, the group received CAER's largest federal grant, $14.5 million, to expand its pilot-scale technologies to demonstration scale at a nearby utility.

At the University of Louisville, the Conn Center for Renewable Energy Research also is looking at specialty applications.

Sometimes called "a third fuel," energy efficiency is more than that, Andrews said.

Mahendra Sunkara, director at the now two-year-old Conn Center, concurs and said much attention there is going to advanced energy materials research. This is everything from solar panels that are low-cost and offer flexible lighting to the planned use of waste-to-biogas approaches.

Investment grade audits a new tool

Other tools include energy savings performance contracts, which are tied to investment grade audits, known as IGAs, at the manufacturing level. Total energy savings at a plant must be tied to electrical energy savings, natural gas savings, water savings and other energy use.

Engineers at UofL's Kentucky Pollution Prevention Center by August 2011 evaluated more than 7.7 million s.f. of space in 103 industrial, commercial and institutional facilities, and conducted 32 on-site energy assessments. The process has made strides toward optimizing energy performance.

Keith Beckham, a plant manager for Sumitomo in Edmonton, said taking a solid look at energy costs is an important part of the strategy of becoming more competitive as an automotive electronics supplier.

"Other facilities would look at a move to China, but we need to be competitive here in the state of Kentucky. It would be a shame to see Kentucky mess up the business advantage we have held with lower utility costs," Beckham said.

The state's automotive manufacturers have told Sullivan University's College of Technology & Design officials they would like to see a degree program incorporate training in energy efficiency as well as advanced manufacturing technologies, said David F. Winkler, director of Sullivan College of Technology & Design. The college currently has robotics and automotive tracks for associate degrees.

Sullivan has a BA in advanced manufacturing technology on the horizon, and it added a modern HVAC tech program in 2009, understanding that manufacturers want engineers and others in the plant to be more "tech practical," Winkler said.

Gaining control over energy usage

Energy efficiency programs are many and varied, but most facilities start with an energy audit that steps beyond just rules about turning out the lights. For example, Premium-Allied Tool in Owensboro reported it received utility and tax rebates to put in lighting systems that saved energy and achieved payback in about six months.

KAM energy conference participant Rexel USA reported that along with lighting and energy audits, it does business presenting emerging technology training for clients. A leader in electrical and data communication products, Rexel has branches throughout the country as well as in 37 countries.

The 3M Company, which makes Post-It notes at its Cynthiana facility, undertook a plan to reduce its overall energy consumption in real-time monitoring. Harshaw Trane participated in the energy audit and assisted with 3M's grant proposal for the Industrial Facility Retrofit Showcase from Kentucky Cabinet for Economic Development. The $87,000 grant it won helped to implement its fresh air economization/advanced energy monitoring project.

This included upgrading three air handlers and retrofitting the plant with more efficient duct work and controls; a main office area air handler now sees reduced operation, while a high-efficiency, dual-zone mini system performs air handling at a guard station. A web-based "dashboard" system now displays constant reports on advanced energy monitoring.

This energy reduction project was completed with an estimated energy savings of $235,000 and 46,142 million BTUs. Other optimization projects netted $564,000 in savings in 2011.

Incentives shorten payback periods

Greg Guess, director of the Division of Efficiency and Conservation in the state Energy and Environment Cabinet, said $68 million in American Recovery & Reinvestment Act funding for energy-efficiency is soon closing out and a handful of projects will be awarded shortly. In 2011, 106 Kentucky industrial, commercial and institutional facilities took advantage of sustainability and retrofit programs.

Aaron Traylor, of the Calgon Carbon Co., operator of the Big Sandy activated-carbon manufacturing plant in Catlettsburg, said they assessed and improved its compressed-air system. The result is a $34,000-a-year savings that will generate project payback in 2.8 years. A warehouse lighting retrofit gives a 6.6-year payback. Money through the Energy and Environment Cabinet paid for as much as 75 percent of the projects.

Toyotetsu America in Somerset added automated controls to reduce energy usage, monitor and maintain of key temperatures, and do advanced scheduling for production, said Mark Redmond, general manager of engineering. A lighting project netted a $121,000 return on the investment, Redmond said. Energy use analysis found, for example, that cooling pumps needed to run at capacity, but not on days of no production.

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