General Motors Cuts Its Energy Use

General_MotorsLast week, General Motors said that 11 of its facilities were awarded the U.S. Environmental Protection Agency’s ENERGY STAR certification. Buildings under consideration must outperform 75 percent of similar facilities nationwide and meet other performance criteria set by the EPA in order to win the distinction.

The winners consisted of seven parts distribution centers, three IT innovation office centers and the firm’s global headquarters, according to the release. Three winning facilities are in Michigan, two in California, and one each are in Colorado, Virginia, Texas, Arizona, Georgia and Tennessee.

General Motors builds more than 10 million vehicles annually and operates more than 300 buildings. Its annual energy bill is $1.3 billion, which is enough to pay to power 1 million homes, according to Global Energy Manager Al Hildreth. Working with ENERGY STAR has saved the company $435 million during the past 20 years, he said.

It costs a lot to save a lot. Hildreth said that the in the U.S. and Canada GM budgets $20 million for energy efficiency, carbon footprint reduction and water conservation projects. The return period for this corporate investment is two years. Hildreth said that the team achieved the goal – and embarked on another round with the same investment and payback parameters.

The key to achieving the corporate goals are to get GM employees on board – both C-level executives and workers at the various plants and offices.

General Motors’ regional headquarters are in North America, Germany, Korea and Brazil. There are 130 people dedicated to energy throughout those regions. There is a common approach to efficiency across regions. Within that context, local considerations and the differences between the nature of the facilities impact the specifics of projects and procedures for achieving the overall goals.

At the highest level, Hildreth said, it is vital that environmental concerns have been recognized by the company as pillars of ongoing operations for the past 15 to 20 years. These priorities are baked into the process. “I think one of the keys to success is that we integrated energy efficiency, carbon reduction and water efforts into the business plan. That gives me access to resources and a seat at the table” alongside manufacturing, finance and other core operations, Hildreth said.

The other side of the coin – and perhaps more difficult – is getting employees onboard. This is an ongoing process. GM runs “energy treasure hunts” in which employees are awarded for finding energy savings. These are similar to The Better Buildings’ SWAP program. The company also encourages innovation. An employee developing and implementing an idea can walk away with $20,000. GM runs “shut down” contests in which the goal is to expand the least amount of energy when a facility is not manufacturing or assembling products.

The basic idea is to incentivize employees to save energy and use water as sparingly as possible. “Having it integrated into the business plan says that people are focused on this,” Hildreth said. “It is not a one-time event.”

General Motors uses ENERGY STAR tools that assess the energy efficiency of the facility on a 1 to 100 point system on a monthly basis. It also uses a homegrown product, Energy OnStar. The platform is a continuous HVAC recommissioning system that enables the staff to track progress on a daily basis.

General Motors also encourages its supply chain – which of course is huge – to be energy efficient. It enters in to energy performance contracts with companies with which it has longer term relationships. “It is a shared savings approach,” Hildreth said. “We pay the contract for the energy savings typically over a five-year period. Those mechanisms have evolved over the years.”

The company’s goal for the 2010 to 2020 time period is to reduce the carbon footprint and energy intensity by 20 percent each. The goal for water use reduction is 15 percent. The company is on track in all three areas, according to Hildreth.

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