MICHAEL HESS: Hello.
And welcome to the latest edition of Energy Matters.
I’m Michael Hess, a new media specialist here at the Energy Department.
And joining me today is Dr. Kathleen Hogan, assistant deputy secretary for energy efficiency.
Today we’ll be discussing how the cost savings associated with industrial energy efficiency
affects American companies and their global competitiveness.
But before we start with the questions, Dr. Hogan, is there anything you’d like to say?
KATHLEEN HOGAN: Sure.
I’d like to talk a little bit about what we’re doing here at the Department of Energy.
You know, we’re working to develop energy efficiency initiatives that improve our economic
competitiveness, create jobs, improve our energy security, lower costs and reduce pollution.
And today we’ll be specifically focusing on two of our major initiatives: one, the
Better Buildings and Better Plants Program, and the other, the Advanced Manufacturing
Initiative.
The first one, Better Buildings, Better Plants, is focused on boosting the competitiveness
of companies, really, in the here and now.
In this program we’re providing assistance to companies that commit to achieving a 25
percent improvement in their energy intensity over the next 10 years, if not earlier.
In the other, the Advanced Manufacturing Initiative, we’ll be working with organizations to address
early-stage technical challenges, with some innovative manufacturing processes as materials,
that have huge potential for the United States.
And while we’re still in the early stages of this program, it clearly has stuck a chord
with American businesses.
In response to $120 million solicitation we have open, we’ve received over 1,400 letters
of interest representing over $4 billion in work.
So we are – we’re looking forward to reviewing these proposals once they all come in, and
really working on some outstanding investments to grow American leadership in manufacturing
technologies, and in turn growing our GNP and jobs.
So I’m looking forward to hearing your ideas and suggestions during today’s Live Chat.
So let’s get started.
MR.
HESS: All right.
Well, we’ve gotten – we’ve gotten a number of emails, Facebook status – or rather
comments, and Tweets as well.
There’s been a common theme here, actually.
To paraphrase several questions: How important is this energy-efficient manufacturing and
industrial technology to strengthening our economy?
MS.
HOGAN: Well, certainly that’s a great place to get started today.
You know, our manufacturing sector in the United States truly is a big part of what
we do.
It represents 12 million jobs, and it represents about 60 percent of our exports – so also
then, a big part of our GNP.
So manufacturing is really critical to our economy.
And what we want to be doing is continuing to boost its competitiveness, boost its leadership
around the world so we can continue to strengthen our economic position.
So really, manufacturing – advanced manufacturing and U.S. competitiveness really go hand in
hand.
MR.
HESS: Great.
And, you know, that – there are the processes that we’re dealing with, but then there’s
also, well, the buildings, right?
And that’s where we’re coming into our second question – an actual two-part question
from Mark (sp) on Facebook, who asks why there aren’t tighter regulations right now for
energy efficiency and commercial buildings.
So first, what are the barriers to making commercial buildings more energy-efficient?
And second, what would make buildings more energy – would making – sorry – buildings
more energy-efficient make our economy stronger?
MS.
HOGAN: Right.
So the buildings area, you know, does have a lot of opportunity for energy efficiency
improvements, and the questioner has really asked, first, about building codes.
So building codes are something that we are doing across the country.
And really, the Department of Energy’s role there is to do determinations around the energy
savings that result from sort of new-model energy codes that come to us through consensus
stakeholder processes.
So can those codes that the stakeholders are developing – could they be more stringent?
They can, and they do get more stringent over time.
I think right now we’re in the process of doing a code determination on a code that
improves the commercial building energy efficiency for new construction by something in the neighborhood
of 20 to 30 percent.
So we will be seeing tighter codes for commercial buildings soon.
Now, at the same time, why are we doing those codes?
It is because we have sort of a disconnect in the marketplace, where the people that
sort of build the buildings typically aren’t the people that are in the buildings, occupy
them and pay the energy bills.
And that’s, you know, a market failure, a market barrier.
And the codes are there to help us build to the level that’s cost-effective so when
the building gets handed over to the owner, or the tenants lease the building, they won’t
be paying a higher energy bill than they otherwise have to.
But I did say in there that – you know, that we’re building to a level that’s
cost effective.
And that’s truly what we want to keep doing, is finding the right level of the codes so
that when you put the better technologies and the practices in the buildings, it really
is a good payback for the whole sort of life cycle and system.
So as we are looking forward to the upcoming increased stringency of the commercial code
– again, it’ll get more stringent, but it will also be in a cost-effective way as
well.
So we are looking forward to that happening and continuing to offer the type of assistance
the Department of Energy can to assist people in getting to those levels and, you know,
the training and enforcement – all so we can reap all those benefits.
MR.
HESS: Now, you – so right now you’re talking a lot about the investments that the Department
of Energy – Energy Department has in programs and projects, which actually comes from Chris
(sp).
He’s asking that as well in an email: Where we have so many – so many programs, what
accounts for manufacturers not using those?
And what is our department doing to encourage those manufacturers to pursue energy efficiency
more aggressively?
MS.
HOGAN: Yeah, so we talk a lot about energy efficiency in this country.
And we talk about the low-hanging fruit.
We talk about energy efficiency being sort of the lowest-cost path to a clean-energy
future.
And all those things are true.
And I guess the other thing we hear is we’ve been talking about energy efficiency for a
while, and a lot of that low-hanging fruit is still there.
So why is it still there?
Well – you know, because all those things are true.
Energy efficiency is low cost, it’s the low-hanging fruit, and indeed, much of it
is still there.
And it is because there are a variety of market barriers in – you know, in – or just across
the economy, whether it’s in our industrial facilities, in our companies, in our buildings,
that we really have to get together to address.
When you look at industrial companies, some of the issues there are just that the efficiency
is in enough different places across the facilities that it’s a little bit hard to get organized
in a way that you’re routinely going out there and finding the energy efficiency opportunities,
making the small investments that need to be made, and then reaping those benefits.
One of the things we have found in working with lots of companies across the country,
is that if we can work with the executive suite in those organizations so that the executives
truly understand the opportunities that are there and the – sort of the path to implement
sort of energy management throughout their organization, and will set energy efficiency
goals for the organization, you can really engage the whole culture of the organization
in achieving those savings and delivering the benefits to the organization.
But it is still interesting, as you look across the country at this point in time, that there
are still many, many companies that haven’t really established an energy-savings target
for their organization.
Many have – and leading organizations, and many of them we’re working with through
the Better Buildings, Better Plants program.
But there are many others who haven’t.
And I think many of them still don’t quite understand the benefits that are there to
be had in – that, you know, include lower costs and increased competitiveness as well
as other benefits in terms of lower pollution and increased energy security.
So there’s a little bit of education we have to keep doing.
There’s working with the leaders to keep showing the pathway and the savings that can
be achieved.
And that’s really one of the reasons we’re very excited about what we’re now doing
with Better Buildings, Better Plants, because I think those leaders will really help show
the way for many of the others that energy efficiency just offers great bang for the
buck.
MR.
HESS: So there’s the – these new programs, and we were just asked in an email – and
I think this might require a little bit of background – but why can’t the private
sector produce on its own the kind of technological advances that your office is supporting through
your R&D efforts?
And I believe he’s referring to the American Manufacturing Partnership’s Innovative Manufacturing
Initiative and the Grand Portfolio Challenge.
MS.
HOGAN: Sure.
Well, certainly the Department of Energy is involved in a whole variety of efforts in
energy efficiency, from research and development to engaging with industry and others to improve
the efficiency of their organizations and facilities in the here and the now.
This question is sort of going up into that R&D space.
And we get this question a lot.
What is it you are really doing that changes the path that we’re on as a country with
energy efficiency?
And we’ve been doing this work now for quite a while.
So let me just speak to some of that.
You know, as we work with companies, we do see that they have to wrestle with fairly
complex technical challenges as they’re bringing a new product or a new material to
the marketplace.
And some of those technical challenges can be complex enough that it really – there
is no totally clear technical answer at that point in time.
And it’s a fair amount of research to go and get the answers to those questions.
And if that research costs enough, the company is just – won’t take it on.
So what we have offered – you know, over and over – is cost sharing for those projects
to help those organizations get over that cost hurdle and get to the point where they
can then see a clear path to commercialization, at which point you need lesser resources from
the federal government.
So we’ve put together, I believe, a very thoughtful approach to engaging with industry
as they want to innovate in terms of the type of cost share we will provide based on sort
of the complexities and the stage of the research the project is in.
And then we offer less of that technical – those resources as that product matures.
So I think we are truly in a good place there.
MR.
HESS: All right.
So in a similar vein, but actually almost on a personal level for you as well – you
– you’ve had a lot of experience with combined heat and power and corporate partnerships
here and at the EPA, which – that was 10 years, is that accurate?
I think –
MS.
HOGAN: Or more.
MR.
HESS: – at EPA.
And – so we got a through an email asking: Since you have – since you have had EPA
experience and now are at the Energy Department, could you address the overlap in energy efficiency
efforts between the EPA and the Department of Energy?
MS.
HOGAN: Sure.
So, yeah, I’ve now been at the Department of Energy for two years, and been at the EPA
for many years prior to that.
And I would say that the work of the EPA and DOE actually doesn’t overlap.
I think it’s very complementary.
And I think it’s one of the things I’ve been focused on since I’ve being here – been
here, is to see that the agency’s – agencies’ – (with emphasis) – work really does complement
each other.
We now sit down at least on an annual basis to develop a joint work plan across our energy
efficiency efforts.
And that’s really just the start, as we coordinate much more actively as the – you
know, the year progresses.
So I think we’re here to leverage what it is that the EPA has developed, and then to
play the role that the Department of Energy can across the suite of programs and projects
that are really our strength and our core capabilities.
MR.
HESS: All right.
So our next email is associated with kind of a higher level of economic expansion in
association with energy efficiency.
And it’s coming from Robert (sp), who in his – in his – in his email he opines
that strong economic expansion and fuller employment are associated with energy and
lower costs and lower consumption of energy.
And he asks you: Are there any examples of – or periods in U.S. history where a policy
of greater energy efficiency combined with the actual efforts at energy conservation
spurs economic expansion and strong job creation?
MS.
HOGAN: Certainly an interesting question.
I think if we just look back over the last, I don’t know, 20, 30 years or so, and really
tally up how much energy efficiency has occurred in this country, we’ll see that energy efficiency
is probably the thing that we’ve potentially used the most of, relative to other fuels.
Energy efficiency is really playing a tremendous role in terms of where we are now in energy
per GDP, as an example.
So I would say that there is pretty good information that energy efficiency is part and parcel
with having sort of -- or of us being in a relatively good place, as you look at where
we are over the last 20 to 30 years.
But I think where we are now is really needing to look to the future and chart what we need
to do to deal with all of the challenges that we see before us.
And as we look at those challenges, it includes being economically competitive, building jobs,
improved energy security.
And I think it – we don’t have to look too far to see that energy efficiency is – particularly
when you roll in that energy efficiency truly is low cost – that it is just a critical
part of what we need to do going forward.
MR.
HESS: And so there – we’ve been – we’ve been talking more at the – at the higher
level, and you know, just seeing here that there have been a lot of specific questions
that are coming in – specifically from Jennifer (sp) via email – regarding – about combined
heat and power.
And hers is: What can be done at the Energy Department and elsewhere in the federal government
to help jumpstart investments in combined heat and power so that we can save facilities
money, increase manufacturing competiveness, and reduce emissions?
And could you actually start off initially, before answering this question, explaining
exactly what is combined heat and power to a – to a more general audience here?
MS.
HOGAN: OK.
So combined heat and power – so let’s start with the fact that when we generate
electricity in this country in, you know, the big power plants where we do so, and the
electricity flows through the transmission distribution lines to our homes – when we
generate that electricity, typically we’re pulling out about a third of the energy content
of the fuel.
And we lose the other two-thirds of the content in the conversion, really, through lost heat.
And what the concept is between combined heat and power is you capture a lot of that heat
and use it on site.
So a lot of combined heat and power will take place at the facility.
You’ll generate the electricity.
You’ll use electricity in the facility.
But you will capture the heat that is the conversion loss and put it to work for you,
again, either in terms of more electricity or taking the heat off and putting it into
your process needs.
And the really effective combined heat and power technologies are ones that are matched
to the process demands within a facility.
And what’s interesting is we’re now seeing a conversion efficiency sort of at the high
end – in the 80 percentages or so.
So compare that to 33 percent; those are huge efficiency gains to be had by the effective
use of combined heat and power.
So we’re very excited about what combined heat and power can do in this country.
And DOE’s been invested in combined heat and power with companies in – across the
country in even improving the technology even further, as well as then going out and doing
outreach with industrial facilities about how those technologies can help them improve
their competitiveness and reduce their costs.
And I think – if you can spare me another moment – what we’re doing in the technology
area is really quite exciting based on what we’re talking about here today.
I mean, we’ve been working with Capstone around microturbines, Caterpillar around larger
reciprocating engines.
And in each case, due to some of the R&D work that we’ve helped fund, those companies
are leaders in the technologies that they were working on and have now been selling
a fair number of these advanced technologies – a lot of it going overseas – really
making the U.S. be a world leader in this space, and having a strong presence with U.S.
jobs.
So, really, just a great story there for combined heat and power, and I think that’ll grow
to an even greater story as we look at where we are now with lower gas prices, which really
makes combined heat and power a very attractive option to our industrial facilities across
the country.
MR.
HESS: Right.
So I think we’re going to have time for maybe one or two more questions – waiting
for a clarification from somebody on Twitter here.
And then the next question – and this is – we’re going back to broad.
In defining advanced manufacturing and the role it plays towards a clean energy economy
– I kind of paraphrased there, but what – so what role does advanced manufacturing
play in a clean energy economy?
MS.
HOGAN: So advanced manufacturing is really critical to a clean energy economy.
So what do we think a clean energy economy is?
I think it’s one where the U.S. is highly competitive.
We have improved energy security.
We have strong jobs and we have low costs.
So advanced manufacturing is just critical to all of that.
And if we just sort of think of our – of the statistics again, of our manufacturing
base, you know, we have 12 million jobs.
It’s contributing 12 – well, it’s 10 percent or so to our GNP, and it’s also
a big part of our national exports.
So if we want to meet all of what we think a clean, robust energy economy is, improving
our innovation and our leadership in the manufacturing space so that our manufacturing sector continues
to compete and lead, they really are part and parcel – the same thing.
MR.
HESS: Great.
So it’s just going to be one last question here.
And this is regarding – this is from Acorus Factor (ph) on Twitter: Any efforts to make
LED lighting cheaper, since it’s the lowest power use compared to the other types of lights
– and can we put that, you know, based on this energy – sorry, industry – industrial
energy efficiency context, commercially and industrially – LED lights?
MS.
HOGAN: Yeah, so we have a robust, solid-state lighting research program as well.
And we continue to work on improving the efficiency or efficacy, as we call it with lighting,
as – and we continue to work on driving down the cost of solid-state lighting.
I think right now is a very exciting time for solid-state lighting.
It’s demonstrating capabilities that are new to people, particularly with its long
life and its very nice quality of lighting.
So it’s going to be exciting to watch that innovation.
And we’ll be working to, you know, integrate that into the partners that we’re working
with industrially, commercially.
I guess one thing I would like to call out is a recent prize that we awarded for solid-state
lighting.
We called it the L-Prize.
And it’s a bulb, the replacement for the 60-watt bulb, that Philips actually won in
showcasing just a very high-performance solid-state lighting alternative.
And we’ll be looking to watch the costs for that come down.
And I think, as the questioner was maybe leading me to, I think this is exciting for where
technology is going in this country: just brand-new, innovative approaches that do what
it is we need – lighting – for fractions of the energy input – solid-state lighting
using about a quarter of the traditional incandescent.
So it’s just a great indication of what we can do with technology to drive down the
energy we need to get the services we all want, which is the essence of efficiency,
and really increase our competitiveness, increase our energy security, and build jobs at the
same time.
MR.
HESS: OK, well – OK, well that’s all the time we have for today.
Thanks, everyone, for watching, and also for all of your questions submitted before or
live.
We’ll have a video of this broadcast available tomorrow on energy.gov.
Please tune in again at – to the next Energy Matters.
MS.
HOGAN: And thank you.
I’d like to express my thanks as well.
Thank you for joining us today, and all of your good questions.
I look forward to working with you in the future.
(END)