Dow s Energy Management System Joe Almaguer Sept. 2015 1
Largest diversified chemical company Founded in Midland, Michigan in 1897 Manufacture more than 6,000 products at 200 sites in 36 countries across the globe Annual sales of $58 billion 53,000 employees worldwide One of the world s largest industrial energy consumers.about 500 Trillion BTUs/Year Committed to Sustainability About Dow 2
2014 Sales by Operating Segment & Geographic Area (dollars in millions) 2014 Sales of $58,167 million North America Sales: $21,422 Europe, Middle East, Africa and India Sales: $19,671 Latin America Sales: $7,939 Asia Pacific Sales: $9,135 3 3
Committed to Energy Sustainability.Why? Sustainability of the Business Save money.$ 29 Billion Competitive advantage..lower cost to produce Environmentally Responsible Lower carbon liability lowers emissions Product attractiveness lower footprint Creates Local Prosperity, Jobs.. Sustainable businesses create local jobs and wealth 4
Committed to Energy Productivity 5
Key to Success The primary reason we have enjoyed this level of sustained success is attributed to having an established, institutionalized and comprehensive Energy Management System (EnMS). DOW CONFIDENTIAL - Do not share without permission 6
Energy Management System What is an Energy Management System? ISO 50001 definition: energy management system, EnMS A set of interrelated or interacting elements to establish an energy policy and energy objectives, and processes and procedures to achieve those objectives 7
Key Elements of Dow s Energy Management System 8
Driving Energy Efficiency at Dow Corporate Commitment Energy Efficiency & Conservation Our Corporate Commitment: Our Sustainability Commitment and Policies establishes energy performance as a corporate objective. Defines Company Values to Stakeholders Establishes Expectations for Leaders 9
Corporate Commitment & Accountability Public Commitment: In 1995 Dow Committed: To Reduce Energy Intensity By 20% by the year 2005 From Base Year 1994 The Dow Public Report www.dowpublicreport.com 10
Corporate Commitment & Accountability Corporate Commitment to 2015 Goals We will further reduce our global energy intensity by 25% from 2005-2015 We will reduce our GHG emissions intensity by 2.5 % per year thru 2015 By 2025, we aspire to reduce absolute emissions within the company No one in the world is more intensely aware of the need, ultimately, to reinvent our dependency on oil and natural gas than we are We will lead the way on energy transformation because we have to. And we have taken important steps already. -- Andrew Liveris Chairman, CEO & President The Dow Chemical Company Liveris Launches 2015 Sustainability Goals 11
Driving Energy Performance at Dow Energy Efficiency & Conservation Senior Leadership Support Top Leadership Responsibility: Appoints an overall EE&C Global Leader to establish and implement the overall EnMS across Dow. Business - Appoints EE&C Leader to drive EE&C within the business Site Leader Appoints EE&C Leader to lead the site in advancing energy performance Sets Overall Long Range Goals Establishes Priority Provides Resourcing and Funding Establishes Performance Accountabilities Visibly Models Action 12
Driving Energy Efficiency at Dow Organizational Structure: Global EE&C Leader Implementation Leader(s) Implementation Teams Energy Teams Networks Roles & Responsibilities Energy Efficiency & Conservation Organizational Structure Implementation: Develops Management Systems Establishes Implementation Model Leads Teams and Networks: Globally/Sites/Businesses Develops Specific Plans to Achieve Goals Identify Energy Saving Opportunities Implement EE&C Projects Monitor and Report Progress Promotes EE&C Culture Locally Leverages Success 13
Driving Energy Efficiency at Dow Organizational Structure: Business EE&C Teams Site EE&C Teams Charter Leadership Membership Plans Roles EE&C Global Leader Site 1 EE Leader Site 2 EE Leader Site 3 EE Leader Site 4 Business A EE Leader Plant A 1 Plant A 2 Plant A 3 Plant A 4 Business B EE Leader Plant B 1 Plant B 2 Plant B 3 Plant B 4 Business C EE Leader Plant C 1 Plant C 2 Plant C 3 Plant C 4 Business D EE Leader Plant D 1 Plant D 2 Plant D 3 Plant D 4 Business E EE Leader Plant E 1 Plant E 2 Plant E 3 Plant E 4 EE Leader Site 5 Plant A 5 Plant B 5 Plant C 5 Plant D 5 Plant E 5 EE Leader 14
Driving Energy Efficiency at Dow Business EE&C Team Structure Sponsor Bus EE&C Team Leader Plant/Unit Focal Point Plant/Unit Focal Point Plant/Unit Focal Point Plant/Unit Focal Point 15
Driving Energy Efficiency at Dow Business EE&C Leader Role: Working with Business Leadership in the development of business energy performance goals and targets that support Dow s 2015 EI targets. Developing and implementing any additional energy performance indicators, (EnPIs), that may be useful in measuring, tracking, assessing and improving the energy performance of manufacturing assets. Leading energy advocacy within the business promoting an energy efficiency and conservation culture communicating energy performance goals, objectives and targets providing EE&C system training engagement of personal in improvement of energy performance Identifying plant level energy improvement leaders who are accountable at a local level for advancing the businesses energy performance improvement goals and objectives Developing and maintaining plant-by-plant EI improvement plans Tracking and reporting progress against targets and goal, plant by plant and at the business level Conducting periodic reviews with business leadership on effectiveness of the EE&C program, progress/results and future plans Maintaining the accuracy of the data that goes into GAUR-Energy Reports used for tracking EI Coordinating and or leading plant energy assessments as a means of identifying energy saving opportunities Participating in Energy Optimization VIP sessions for new projects within the business Leveraging EI improvement projects/learning/opportunities within the business and exporting to others as appropriate Active participation and support of the Energy Efficiency and Conservation Network 16
Driving Energy Efficiency at Dow Site EE&C Team Structure Sponsor Site Leader Site EE&C Team Leader Plant/Unit Focal Point Maintenance Focal Point Communications Focal Point Engineering Focal Point 17
Driving Energy Efficiency at Dow Site EE&C Leader Role Includes: Assembling and leading a cross functional team to establish, implement, maintain and improve the Site s Energy Management System (EnMS) and drive energy performance improvement Leading energy advocacy within the site promoting energy efficiency and conservation culture communicating energy performance goals, objectives and targets within the site providing EE&C system training engagement of personal in improvement of energy performance Work with Site Leadership in the development of Site Energy Policy and Performance Goals Developing and maintaining an energy improvement plan Tracking and reporting and communicating energy performance improvement, plant by plant and at the site level, through periodic Site Leadership Review Sessions (i.e. SLT meetings) Helping to maintain the accuracy of the data that goes into GAUR-Energy Reports used for tracking energy performance by periodically reviewing the data Conducting periodic assessments/reviews of the Site EE&C program to ensure full implementation and continual improvement Coordinating and or leading site/plant energy assessments as appropriate as a means of identifying energy saving opportunities; i.e. Site wide Assessments, targeted assessments, etc. Participating in Energy Optimization VIP sessions for qualifying new projects within the Site Leveraging EI improvement projects/learning/opportunities within the site and exporting to others as appropriate Active participation and support of the Energy Efficiency and Conservation Network 18
4,100 4,050 4,000 3,950 3,900 3,850 3,800 3,750 3,700 3,650 3,600 Driving Energy Efficiency at Dow Energy Efficiency & Conservation Energy Intensity (BTU/LB) Measurement & Reporting 1 2 3 4 1 2 3 4 1 2 3 2004 2005 2006 Total 4,052 3,894 3,927 3,950 3,949 3,937 3,914 3,773 3,821 3,868 3,833 Energy Measurement & Reporting Systems: Robust Energy Accounting System Metering Program Sub-metering Energy Conversion to Common Btu s; Btu s/lb Baselines and Energy Performance Indicators (EnPIs) Established Accounting and Business Rules Energy Reports Capabilities: Drill down: Business / Site / Plant / Facility Converts Data to Useful Information Available to all Leaders and Employees Basis for Monitoring and Reporting Progress Energy Training Internal Report Public Sustainability Report 19
Dow s Energy Use and Consumption Dow is among the largest Industrial Energy Consumers Annual Energy Consumption Globally 500 Trillion Btu s US Operations Consumption is 300 Trillion Btu s/yr Data Analysis is used in performing Energy Reviews Aratu 2% All Other Sites 12% Seadrift 2% Tarragona 3% Freeport 25% Bahia Blanca 4% Dow Central Germany 6% Fort Saskatchewan 6% Plaquemine 13% St Charles Operations 7% Terneuzen 12% Stade 8% 20
Committed to Energy Productivity 21
Driving Energy Efficiency at Dow Energy Review and Improvement Plans Energy Assessments of Existing Assets (plants, systems, facilities, etc.) Improvement Work Process To Identify Defects: Energy Waste Inefficiency Sub-Optimized Systems Operations & Maintenance Issues Finding Optimum Solutions Integrate Projects into Capital Program Prioritize & Compete for Funding Corrects the Defect Establish a Control Plan to Sustain the Gains Improvement Methodology Results in Incremental Energy Efficiency Improvement Energy Efficiency & Conservation 22
Energy Efficient Design of Systems Designing in Energy Efficiency Energy Optimization VIP: Energy Optimization is a structured, team based and expert supported effort directed towards developing the optimal balance between the cost of energy and capital expenditures in projects to achieve the minimum long-term cost of ownership. The return of investment is improved by investigating three layers: optimize fit of process into existing site power and utility system define the most economic level of heat recovery within the process utilize energy optimized process building blocks (unit operations) Energy Optimization is used to maximize the impact of our capital spending and increase our global competitiveness. 23
Improving on the Best Opportunity to Build a More Efficient Plant Than Current Benchmark 2,500 2,000 1,500 Plant Intensity Benchmark W/O Optimization 1,000 500 2,500 Plant Intensity Benchmark 0 ALTONA, AUS ARATU, BRA FREEPORT, TX PLAQUEM INE, LA STADE, DEU 2,000 Energy Intensity Orig Avg 2 EI 1,500 1,000 2,500 Plant Intensity Benchmark With Optimization 500 2,000 0 ALTONA, AUS ARATU, BRA FREEPORT, TX PLAQUEM INE, LA STADE, DEU 1,500 Energy Intensity Average Intensity 1,000 Overall Energy Intensity is Improved 500 0 ALTONA, AUS ARATU, BRA FREEPORT, TX PLAQUEM INE, LA STADE, DEU Energy Intensity Orig Avg 2 EI Final EI 24
Employee Communication Systems: System(s) That Facilitate Sharing or Communication on: Dow Sustainability Commitments Performance Reporting Challenges & Success Stories Big Energy Savings, Recognition at TCO Communication Systems Texas Operations LHC-7 Wins ACC Responsible Care Award Benchmark Information Employee Engagement Messages from Leadership Team Submit an Idea Energy Efficiency & Conservation Website Energy Efficiency & Conservation 25
Driving Energy Efficiency at Dow Goals and Compensation: To Help Drive Accountability Throughout the Organization Set Challenging Annual Goals Corporate Goals Business Goals Site Goals Plant Goals Team Goals Individual Goals Link to Compensation : Compensation Linked to Goal Attainment & Performance Goals & Compensation Energy Efficiency & Conservation 26
Driving Energy Efficiency at Dow Recognition External Examples: Power 9 Operating Employees Save Energy Small Steps Lead to Big Energy Savings, Recognition at TCO Texas Operations LHC-7 Wins ACC Responsible Care Award Dow Named Energy Star Partner of the Year 2008 Dow data Centers Reduce Energy by 50% Several Dow Plants have been recognized by the Dept of Energy for achieving significant energy savings following System Assessment under the Save Energy Now Program. Internal Recognition System: Dow Recognition System: - Enables Recognizing employees for the EE&C Efforts Energy Efficiency Newsletter Goals & Compensation Energy Efficiency & Conservation 27
Efficiency and The Triple Bottom Line Good for Business: Saves Money, Enhances Global Competitiveness, Preserves Jobs, Creates Prosperity for Shareholders Good for the Environment: Fewer GHG Emissions, Part of the Solution to Global Climate Change Good for Society: Reduces Demand, Lowers Energy Bills, Promotes Energy Security 28
Thank You Joe Almaguer The Dow Chemical Co. Telephone: +1 832 466 2486 Email address: aalmaguer2@dow.com Almaguer.NRG@gmail.com 29