Industrial Energy Service Outsourcing Offers Savings Potential

March 20, 2014 By Linda Hardesty

Many industries are unaware they can outsource energy functions such as steam, compressed air, water treatment, lighting, or other activities, according to a blog by the American Council for an Energy-Efficiency Economy.

US-based manufacturers in 2006 acquired $156 billion worth of energy to transform raw and intermediate materials into finished products. Of that total value, $80 billion was lost through inefficient conversion and use, thus providing a first-cut estimate of the market for energy service outsourcing, says ACEEE.

A new report by ACEEE finds that outsourcing can address all the classic impediments to industrial energy efficiency by providing some combination of capital and expertise to perform common energy functions. The report does find, though, that details are crucial. A literature review and interviews with 41 experts (both energy users and solution suppliers) revealed that early identification of risks and associated contract terms are important to successful outsourcing experiences.  With proper preparation and education, outsourcing can be a cost effective method for manufacturers to reduce energy costs.

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