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American businesses of all sizes have known for decades that smart energy management can reduce costs, simultaneously improving profits and reducing environmental impacts. These companies offer valuable lessons; if more businesses managed their energy the way these benchmark performance leaders do, competitiveness would improve and America would be much closer to solving its energy and environmental challenges.
IBM: Setting the Standard in Energy Savings
Widely known for technological innovation in its products, IBM is quietly setting the standard in innovative, efficient energy management in its factories, offices and operations. Through a rigorous, corporate-wide commitment, the company has saved millions of dollars worth of energy - savings that not only increase profits and productivity, but also improve environmental performance.
In 2000 alone, IBM's energy conservation efforts saved 285 million kilowatt hours of electricity and reduced fuel use by the equivalent of 1.4 million gallons of oil, which amounts to 4.85 percent of their annual energy needs. Conservation, along with measures to cut costs by reducing electricity use during peak periods saved IBM more than $39.7 million in just one year.
From 1991 through 2000, IBM cut total energy use by 25 percent due to energy conservation actions alone, saving 8.9 billion kilowatt hours of electricity - enough power nearly 1.5 million homes for a year - and pocketing $ 527 million. As for the environmental dividend, IBM avoided almost 5.6 million tons of the carbon dioxide emissions associated with global warming. That is the equivalent of 1.4 million cars driving 10,000 miles.
And they're not stopping there: IBM plans to achieve energy conservation savings equivalent to 4 percent of its energy use each year through at least 2004.
Energy Performance = Environmental Savings
IBM's outstanding energy performance is the basis for the company's ground-breaking pledge last year to achieve average annual CO2 emissions reductions equivalent to 4 percent of the emissions associated with the company's annual fuel and electricity use per year through 2004. These reductions are to be achieved through further energy conservation actions. The promise is part of the Climate Savers Partnership program with the World Wildlife Fund and the Center for Energy & Climate Solutions.
Energy saving measures to date range from lighting and high-efficiency motors to the use of free cooling and the reduction of reheat energy. Cost avoidance actions included peak-demand shaving and the purchase of higher-voltage electricity. Operational efficiencies were achieved by consolidating operations and space.
Further improvements will include:
How They Do It: Efficiency as a Core Business Value
IBM's record is the result of a company-wide yearly commitment to energy conservation, part of an aggressive energy strategy that dates back more than 25 years with the issuance in 1974 of a formal policy calling for the conservation of energy and materials in both the design and manufacture of IBM products.
IBM's commitment to energy efficiency takes practical form in a global management system covering technology, products and overall business operations. The system includes a centralized corporate energy management program and tracking system that monitors energy use and conservation performance at all major locations.
Today every major IBM facility has a designated energy manager. Each has an annual energy master plan approved by management, with results measured quarterly. Energy performance is tested in internal audits, and a core part of the company's environmental management strategy. Outcomes are reinforced through recognition and award programs, both internal and external.
IBM also created a decision-making tool that enables its designers to consider feasible alternatives for increasing the energy efficiencies and reducing the environmental impacts of its products. Cost-effective efficiency measures are included in the engineering design for all construction projects with combined capital and expense costs over $500,000 or more than 5 percent of the location's annual energy costs - whichever is greater.
Case In Point: Boulder Data Processing Center
IBM's Boulder, Colorado data processing facility houses servers for the company's Global Services and Software Manufacturing Systems divisions. By replacing its existing computer CPUs and direct access storage disk (DASD) devices with new, higher performance, more energy efficient models, IBM cut energy use and increased productivity, saving more than $600,000 in 1998.
Direct Efficiency . . .
. . . equals big savings...
. . . plus improved performance:
In addition, the new equipment runs much cooler, which means the company spends less on air conditioning and facility maintenance. And they require less floor space.
Energy Outsourcing: Two Heads are Better than One
IBM has one of the world's best energy management programs. But the company isn't going it alone. IBM also has performance-based outsourcing contracts with energy service companies. The contractors offer capital investment and technical expertise in return for a share of the savings from efficiency projects. This eliminates up-front costs that might otherwise impede such projects. It also means cost-effective energy savings efforts need not compete internally for investment capital against IBM's core business projects.
Outsourced projects include lighting retrofits in more than 4 million square feet of office and manufacturing space. The improvements cut lighting energy in half and reduced maintenance costs - all while providing better light for company employees. IBM and its partners removed 80,000, installed 12,000 new fixtures and replaced 40,000 fluorescent ballasts.
IBM's outsourcing projects have delivered big annual savings. Total savings at just one location are worth $1.3 million per year. They include:
Lighting upgrades
Variable-Frequency Drives in factory air inlets
Upgrade 15 Building Air Conditioning Units (one building)
Upgrade pneumatic controls to direct digital controls (one building)
A/C Cooling Tower Upgrade for Freecooling
Turning Energy Savings into Environmental Savings
IBM's commitment to energy savings is driven in part by its commitment to the environment. The company's strong performance on conservation is the basis for a ground-breaking commitment to achieve average annual CO2 emissions reductions equivalent to 4 percent of the emissions associated with its fuel and electricity use through energy conservation actions from 1998 through 2004.
In 2000 alone, IBM's energy efficiency measures avoided 163,101 tons of CO2 emissions worldwide out of a total of 3,443,000 tons of CO2 and other combustion-related gases. This works out to be 4.74 percent.
The pledge came in March, 2000, when IBM became an inaugural partner in Climate Savers, a voluntary program of the World Wildlife Fund and the Center for Energy & Climate Solutions. Climate Savers works with companies around the world to set and achieve corporate-wide energy efficiency goals and increase the use of clean-energy technology. Member companies make specific commitments to reduce carbon dioxide emissions and participate in an independent verification process.
"IBM has a longstanding energy conservation goal and a history of embracing voluntary programs," says Wayne Balta, IBM's Director of Corporate Environmental Affairs. "With Climate Savers, IBM will further institutionalize its global energy conservation commitment. "By conserving energy, the company also enables the reduction of CO2 emissions - results that are good for IBM's business and that help address concerns over climate change."
IBM's energy commitment includes the strong support of and participation in numerous voluntary initiatives and partnerships with government and environmental organizations. In addition to Climate Savers, the partnership programs include voluntary greenhouse gases report (1995), Climate Wise (1996) and Energy Star (1999).
Climate Wise is a joint program of EPA and the Department of Energy that promotes energy efficiency and challenges businesses to find creative ways for reducing greenhouse gas emissions from US facilities. EPA's Energy Star program is a voluntary market-based partnership to reduce air pollution through increased energy efficiency in products, homes and commercial buildings. Since the fall of 2000, both Climate-Wise and Energy Star programs were integrated under the Energy Star program.
IBM helped develop the Energy Star Program, and has been an Energy Star computer partner since its 1992 inception. In March, 2001, the company received the Energy Star "Excellence in Corporate Commitment" award recognizing its overall commitment and contributions to voluntary energy conservation and efficiency across operations and product design. IBM is the first and only company to receive the overall corporate commitment award.
IBM has twice been named the Energy Star Computer Partner of the Year. It offers more than 350 models of Energy Star qualified computers, monitors, and printers, and displays the Energy Star label prominently in marketing efforts.
Additional Awards and Recognition:
IBM received the 1998 Star of Energy Efficiency Award from the Alliance to Save Energy and 1999 Climate Wise partner of the year award. The company was also one of the first to receive EPA's Climate Protection Award, for which energy conservation was a major consideration.
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