In this first of a two-part series, Bill Bach, a Senior Project Manager on Edison’s Energy Optimization team, talks shifting client priorities, nailing client engagement, and creating successful decarbonization strategies. “We meet clients where they are on their journey, but we do that physically, too,” Bach says. “I flew 27,000 miles last year to visit client sites.”
The Edison team’s expertise starts with advising clients on how to improve their operations and continues with implementing these opportunities, as well as providing turnkey project implementation services.
The cost of carbon
There was a time when carbon emissions were synonymous with a booming economy – if emissions were rising, the economy was thriving. Conversely, if emission rates were falling off, then things were going bust.
But that was then, and this is now, and carbon emissions are no longer tied to a nation’s GDP. Today, many developed and developing countries are seeing their emissions fall while their economies continue to grow.
A key driver of this shift has been the increasingly visible – and now undeniable – impacts of climate change.
According to the United Nations, global greenhouse gas (GHG) emissions must decrease by 43 percent by decade’s end and hit net zero by 2050 to meet the 1.5°C target. And while current global commitments fall short, the public and private sectors have made considerable progress towards economywide decarbonization.
That’s a good thing, because as it turns out, carbon emissions are costing us a pretty penny. A recent estimate around the social cost of carbon finds that each additional ton of CO2 emitted into the atmosphere costs society $185 per ton – 3.6 times the current U.S. federal estimate of $51 per ton, according to an analysis released by researchers from Resources for the Future (RFF) and the University of California, Berkeley.
The social cost of carbon is an increasingly critical metric that measures the economic damages, in dollars, that result from the emission of one additional ton of carbon dioxide into the atmosphere.
And with a sizable chunk of that coming from the manufacturing and production sectors – responsible for nearly a third of domestic greenhouse gas emissions in the U.S. and one-fifth of carbon emissions globally – decarbonization of this sector has emerged as a key lever to tackling the climate crisis.
Shifting client priorities
That’s where Edison’s Energy Optimization (EO) team comes in, working with industrial manufacturers across the automotive, food and beverage, healthcare, and pharmaceutical sectors to make their facilities more energy efficient and reduce their overall carbon footprints.
One way it’s done is through energy audits, which provide key energy cost and usage metrics, informing a portfolio of immediate and long-term projects to boost energy efficiency. If an audit recommends one or more capital projects, Edison can also plan, design, implement, measure, and verify energy optimization solutions to ensure efficiency and savings.
Audits involve a walkthrough and meticulous review of a client’s facility and systems, with Edison then providing a roadmap to energy efficiency, savings, system optimization, better indoor air quality, enhanced reliability, and long-term sustainability.
Bach, a member of Edison’s EO Retrofit Solutions Group, says interest among industrial clients has shifted more towards reducing carbon emissions than lowering costs.
“Over the last six to twelve months, clients are definitely leaning more towards reducing emissions and corporate ESG goal attainment,” he said. “Prior to that, you could feel a more palpable focus on cost savings first, with ESG goals behind that.”
The golden age of incentives
Industrial clients are seeing unprecedented support and incentives to decarbonize through recent policies and incentives.
With several provisions targeted specifically to the industrial sector, the Inflation Reduction Act (IRA) focuses on revamping the U.S. manufacturing landscape by targeting hard-to-abate sectors with emission reductions programs and incentivizing the production of clean energy components and related technologies.
The IRA launches the Advanced Industrial Facilities Deployment Program, which will make nearly $6 billion in competitive funding available for industrial facilities to deploy clean technologies to reduce GHG emissions.
In addition, the IRA not only provides funding for facilities to lower emissions, but also for facilities to produce the technologies necessary for the clean energy transition. This will translate into $10 billion for manufacturers to build new manufacturing facilities or to retrofit existing facilities that produce clean energy technologies.
With all the incoming incentives and an attractive return on investment, manufacturers are now feeling much more confident about making major systems changes within their facilities.
“Now the conversation has flipped, where it starts out with, ‘We have these goals we need to hit, can you help us get there?’ as opposed to, ‘We’d like to save some energy costs, and by the way, we have some goals,’” Bach said. “That gives us a little more flexibility on what we recommend.”
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