From voluntary to mandatory – energy management systems in the United States


As cap and trade legislation in the United States has slowly faded as a distant and forgotten memory, energy efficiency standards for commercial buildings and industrial facilities have simultaneously emerged as a viable and palatable alternative that could achieve significant greenhouse gas (GHG) emission reductions. Indeed, the industrial and commercial sectors alone account for 58 percent of the world’s total energy consumption. One example in this growing trend is President Obama’s Better Building Initiative, which was announced in February 2011. This Initiative will provide tax breaks, grants and loans to private companies with the goal of making commercial buildings 20 percent more energy efficient by 2020. Another example is the new global energy efficiency and energy management standard, ISO 50001, which was recently endorsed by the U.S. Department of Energy (DOE).

While these energy efficiency policies have predominately taken the form of voluntary and incentive-based programs, there is a recent emergence of mandatory requirements, with the most prominent example being California’s new energy efficiency assessment regulation. Given the growing political impetus towards adopting energy efficiency standards at the international, federal and state levels, the next trend may likely be the shift from voluntary to mandatory energy management standards in the commercial and industrial sectors.

Voluntary: ISO 50001 Energy Management Standard

On 15 June 2011, the International Organization for Standardization (ISO) announced the publication of the ISO 50001 Energy Management Standard. The ISO 50001 Standard is a voluntary program that is intended to provide organizations with an international framework for integrating energy performance into their management practices. The ISO 50001 Standard is intended to increase energy efficiency, reduce energy costs, reduce GHG emissions and improve overall environmental performance.

Similar to the ISO 14001 Environmental Management Standard, ISO 50001 follows the “Plan-Do-Check-Act” framework. In other words, the ISO 50001 Standard provides organizations with a framework for developing a policy for the more efficient use of energy, setting targets and objectives to meet this policy, using data to understand energy use and consumption, measuring the results, reviewing the effectiveness of the policy, and continually improving  energy management.

The DOE’s Industrial Technologies and Building Technologies Programs are supporting the implementation of the ISO 50001 Standard for industrial and commercial facilities through the Superior Energy Performance Certification Program. Beginning in 2012, this voluntary energy management program will certify facilities that conform to the ISO 50001 Standard and meet additional energy performance improvement criteria. Additional information about DOE’s support of the ISO 50001 Standard is available online.

Mandatory: California’s Energy Efficiency and Co-Benefits Assessment Regulation

On 1 July 2011, the California Air Resources Board (ARB) adopted

regulations establishing energy efficiency assessment requirements on California’s largest industrial facilities. This regulation is part of a comprehensive set of policies and regulations that the ARB is implementing to meet the goals established by the Global Warming Solutions Act of 2006 (AB 32). AB 32 requires the state to reduce GHG emissions to 1990 levels by 2020. AB 32 also required the ARB to develop an overall plan to reduce GHG emissions, which was finalized in the ARB’s Climate Change Scoping Plan in December 2008. This energy efficiency assessment regulation is one GHG emission reduction measure set forth in the ARB’s Climate Change Scoping Plan.

The regulation requires large industrial facilities in California to gather information on energy consumption, GHG and other pollutant emissions, and identify potential opportunities for improving energy efficiency and reducing GHG and other pollutant emissions. The energy efficiency assessment regulation applies to stationary sources in California that emit 0.5 million metric tons of carbon dioxide equivalent (MMTCO2e) or more annually, as well as petroleum refineries and cement plants that emit 0.25 MMTCO2e or more annually. Combined cycle electricity generating facilities built after 1995, petroleum refineries that do not produce transportation fuels, mobile combustion sources and portable equipment are exempt from the regulation’s requirements.

The regulation requires affected industrial facilities to conduct a one-time energy assessment that includes a two-part analysis: (1) an energy consumption and emissions analysis and (2) an energy efficiency improvement analysis. These analyses must then be complied into a certified Assessment Report and submitted to the ARB by 15 November 2011. Once the information is collected, ARB intends to use the data to inform industry, government agencies, and the public on the most effective methods to reduce GHG and other pollutant emissions from large industrial facilities.

Firstly, affected facilities are required to conduct an energy consumption and emissions analysis that compiles energy consumption and emissions data at the facility for the 2009 calendar year. This analysis must identify the facility’s processes and equipment types used in the processes, energy consumption, and GHG, criteria air pollutant, and toxic air contaminant emissions.

Secondly, affected facilities are required to conduct an energy efficiency improvement analysis that identifies potential energy efficiency improvement projects at the facility, as well as the associated impacts if the projects were implemented (e.g., costs, energy savings, emission reductions). This analysis must identify potential improvement projects for equipment, processes, or systems at the facility that would cumulatively account for at least 95 percent of the facility’s total GHG emissions.

Once the ARB has collected and reviewing the Assessment Reports, it intends to develop a report with preliminary findings and recommendations, including potential voluntary, incentive-based, and regulatory actions that could be taken to maximize GHG and other pollutant emission reductions in the state.

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