A Tool to Incorporate Non-Energy Impacts in Energy Efficiency Investment Decision Making for Firms

Energy efficiency is a key demand-side strategy for sustainability, recently identified by the United States Department of Energy as a pillar of industrial decarbonization. The increased focus on decarbonization and the requirement for efficiency to enable electrification, another decarbonization pillar, due to the spark spread between natural gas and electricity prices, make energy efficiency increasingly relevant. Still, industries face challenges in adopting energy efficiency measures. Researchers have long found a gap in adoption of even those measures with a profitable net present value, attributed to lack of strategic value among other barriers (see for rigorous exploration and taxonomy). One solution to facilitate energy efficiency projects is the inclusion of non-energy impacts, as this has been shown to double potential deployment of such projects at system level. Energy efficiency can provide valuable benefits outside of simple operating cost reductions, from decreased pollution to enhanced productivity. The inclusion of these benefits in decision making assessments faces hurdles due to inconsistency of ancillary benefits across projects, difficulties in quantifying impacts and the need for additional measurement to quantify them. The decision-making tools to support this have been designed primarily for the European context. We begin with a stakeholder engagement process to better characterize the U.S. decision making process surrounding adoption of energy efficiency investments. Characterization of non-energy impacts has developed substantially over recent decades. Cagno et al. provided a framework for studying the applicability of these impacts to energy efficiency projects, listing 120 key performance indicators focused mainly on reductions of costs/harms. Other researchers have included impacts on the strategic and revenue side that can be merged into this framework as well. We seek a tractable set of impacts that can be included in a decision-making tool in the US, and as such are well suited to US industry, management and decision making processes. We also seek to understand how to best quantify or characterize these impacts. This work will demonstrate the results of a survey conducted among US manufacturing industry decision makers to assess the decision making landscape of stakeholders as well as the most relevant performance indicators for energy efficiency projects.