Energy accounts for 26% of the cost of aluminium production at Alcoa, a company that is also, unsurprisingly one of North America’s highest consumers of electricity. With energy costs on the rise it was 1993 when the company set its first goals for reduced energy intensity. Alcoa aimed to reduce energy intensity by 10% in primary production operations and 20% in other business, by 2020, with subsequent goals of an additional 15% and 30% respectively by 2030. They are on track to achieve their goals, and have thus far identified $100 million in savings.
Alcoa state strong corporate leadership as the key reason that their energy efficiency efforts have been successful, their case study was reported by the Department of Energy to recognise the work that they had done.
Alcoa established their Energy Efficiency Network to drive their programmes. The Network’s role is to identify energy saving opportunities within different plants and to make recommendations on changes and improvements. The plant’s facilities and energy management team decide how to implement the recommendations in the context of their hands-on knowledge of the plant.
Alcoa have made it clear that their corporate view is the energy is a continuous priority for many throughout the company. To this end, since 2010, leadership performance pay has been directly linked to energy performance, sending a clear and consistent message through the organisation.
There is a clear line of responsibility ending with the President of Energy who reports into the CEO & Chairman.
The Energy Efficiency Network and the President of Energy have excellent communication with the company’s public relations department meaning that successes are celebrated publicly, debate is generated throughout the company and overall awareness about energy management is consistently being raised.
Alcoa recognised that reporting was critical to understanding their energy management needs and to making the best decisions. This led to investment in monitoring & verification equipment to deliver better metrics on energy usage and major assets.
Energy management projects are competing for financing from the overall Alcoa capital plan. Energy business plans had to be presented to the corporate team for assessment. To be successful, projects were normally required to have a payback window of two years or less.
Alcoa have found that strong leadership and corporate buy-in is especially critical when the low-hanging fruit for energy improvements is gone, and the energy projects require more capital and more commitment from the workforce. At this stage the company’s leadership is invaluable to maintain momentum and support project development.