Three Ways Businesses Can Save on Power

Steve Gossett Jr. extracts profit by making buildings more efficient.

Does American business have money to burn? You'd think so, if you looked closely at all the energy spent needlessly in factories and offices. These lost kilowatt-hours don't help turn out more widgets and don't make workers more productive or even more comfortable in their cubicles. Here are just three ways that companies could stop wasting power and get down to business.

Unlocking heat power. It takes a lot of heat to melt quartz rock into silicon. And at its 75-year-old West Virginia Alloys plant near Charleston, Globe Specialty Metals realized its furnace operations were being hampered by reliance on an inefficient coal plant and fluctuating hydroelectricity. The power woes were ironic, since the silicon made here is the basis for new clean energy—solar photovoltaic cells.

But company officials now are convinced there's a solution in the hot gas that blasts from its 2,000-degree furnaces every day. An innovative energy services company, Recycled Energy Development of Westmont, Ill., will invest $55 million in an upgrade that will capture the furnace heat at West Virginia Alloys and convert it into electricity—about 40 megawatts, or enough to power 25,000 homes.

Using no additional fuel, this recycled exhaust will now provide one third of the plant's power needs. That means the company will no longer have to furlough workers in the summer, when the hydroelectric runs low. In fact, the new power—which Globe will buy from red at a fixed price for 25 years—will be cheap enough that the company aims to open a sixth furnace and add 30 industrial jobs. "It will be one of the most efficient [silicon] facilities in the world," says Arden Sims, president of West Virginia Alloys.

Government studies show the United States throws away 200,000 megawatts of heat that could be turned into electricity—enough to replace 400 coal plants and nearly 20 percent of the nation's current electricity capacity. Less than 30 percent of the fuel energy burned at power plants now makes it to transmission lines to be delivered to customers as electricity. The rest is vented to the atmosphere as steam and heat. Recycled Energy Chairman Thomas Casten argues the heat is a lower-grade product that can be put to good use—as long as it doesn't have to travel far. The steam electric plants in many cities run on this principle. And during 30 years of doing business deals in combined heat and power, Casten, who has partnered with his son Sean for the past decade, has installed heat-capturing facilities at 250 industrial sites, including at General Motors and Coors Brewing.

But less than 8 percent of U.S. electricity is produced from heat, among the lowest penetration of the technology in the world. In contrast, Denmark has kept its energy consumption stable for 25 years while expanding its economy because 55 percent of its power is captured heat. Regulatory barriers make combined heat and power tough in the United States; for example, it's illegal in many states for industrial facilities to run transmission lines or sell the excess power they generate from heat.

But Recycled Energy aims to make a big push for heat-to-electric with $1.5 billion in funding from a Boston private-equity firm, Denham Capital Management—with West Virginia Alloys the first project under the deal.

Revving up better motors. Cement plants gobble energy, but one change can yield astounding savings. A leading Mexican cement firm, Cruz Azul, replaced two motors at a kiln near Mexico City with new variable-speed motors and saved enough electricity to power nearly 500 U.S. homes each year. Studies show similar reserves could be tapped from factories of all types around the world.

Motors are the largest single use of electricity in the U.S. economy, accounting for 65 percent of power consumed by industry and nearly one quarter of all electricity sold. Yet, these machines are wildly inefficient in the way they run pumps, fans, and other processes. Motors typically run at one speed—high—when most jobs require less force. "You don't just nail down the accelerator of your car and then use the brake to regulate the speed," says Peter Terwiesch, chief technology officer of the Zurich-based power firm ABB. "But in effect, that's what the process industries are doing."

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