While an economic recovery in the United States remains tepid despite relatively positive economic news for the first few months of 2010, commodity prices have rebounded significantly. Energy prices for oil and industrial natural gas are substantially higher than their 2009 lows.1 High energy prices could undermine any sustained recovery and especially dampen any rebound for manufacturers already battered by the recession. Faced with uncertain energy prices for the foreseeable future, manufacturers and energy managers may want to consider options to reduce price volatility in their energy supply inputs. They may not be in a position to invest in a capital project that uses up scarce resources during a slow business climate.2 They may likewise need options that generate a payback under short time horizons. One such (often overlooked) energy efficiency strategy option is mechanical insulation.

To corporate energy or plant managers, mechanical insulation may not evoke the same excitement as other industrial systems with gauges and other electronic monitoring controls.3 However, mechanical insulation’s low-tech benefits are hard to ignore. First, they come in countless commercial and industrial applications.4 They can cover vessels, ducts, boilers and piping, and can crosscut numerous industries. Systems cover both hot and cold scenarios, and can ensure thermal, acoustical and personnel safety.5

If wide application of mechanical insulation systems doesn’t generate interest in itself, then you should consider the effect they can have on the annual operating budget. Often, mechanical insulation systems have a payback period of 12 months or less,6 which equates to a 100 percent annual return. Recently, the U.S. Department of Energy’s Industrial Technologies Program (ITP) has been working with the National Insulation Association (NIA) – a long-time partner of ITP – to specifically analyze Save Energy Now energy audits and extrapolate information to put mechanical insulation’s benefits into context. Together, ITP and NIA analyzed more than 700 Save Energy Now assessments conducted since 2006. Though the audits focused on mechanical insulation for just process heating and steam systems and not insulation’s wider potential application for the reviewed plants, savings were significant. Across small, medium and large plants, mechanical insulation improvements had an approximate nine- to 12-month payback period. Clearly, mechanical insulation upgrades have the potential to save large quantities of energy and even larger amounts over wider applications, especially considering the opportunities in the commercial market.

Mechanical insulation systems also are among the few manufactured products that save more energy than it takes to produce them. NIA estimates that over a 20-year lifespan, mechanical insulation systems save between 140 and 500 times the energy that it takes for manufacturers to produce them.7

Despite the belief that mechanical insulation is not an “exciting” subject, NIA executive vice president and CEO Michele Jones recently said, "It is essential to begin thinking differently about mechanical insulation and the value it can provide."8 During construction of a new facility, it could be dangerous to consider mechanical insulation under “economic thickness” calculations, given that energy prices have risen substantially over the last 10 to 20 years. Original cost assumptions may change as energy has become more expensive. Furthermore, value engineering “mechanical insulation almost always means compromising the insulation thickness, changing the materials or system (a cheaper substitute), or eliminating the insulation.” The problem with this is that with insulation reduced, “the equipment works harder, thus increasing operating costs” and decreasing the equipment’s operating life.9 You may end up paying more by not investing up front.10 Usually, insulation is thought of as an expense. Instead, managers should think of it as an investment with returns often in under a year.11

Thankfully, resources exist to help facility managers make smart mechanical insulation investments to their systems. Of course, ITP’s Save Energy Now assessments can analyze insulation improvements for industrial heating and steam processes. The National Institute of Building Sciences has a mechanical insulation design guide containing several free online calculators (http://www.wbdg.org/design/midg.php). The North American Insulation Manufacturers Association has a free software tool called 3E Plus, available for download online at http://www.pipeinsulation.org. This program can eliminate the complexity in determining the appropriate insulation thickness. It can calculate British thermal units saved, cost of reduction, the available return-on-investment opportunity, and emissions savings for gases such as nitrogen oxide and carbon dioxide.12 This tool can also analyze the “upgrade vs. replace” scenario for a potential project.13

Other resources may become more widespread as mechanical insulation gains more attention. Adding insulation beyond what is required by ASHRAE 90.1 – the American Society of Heating, Refrigerating and Air Conditioning Engineers’ Standard 90.1 (Energy Standard for Buildings Except Low-Rise Residential Buildings) and one of the most recognized building energy standards – has real benefits, and ASHRAE is reviewing higher insulation levels for its next update.14 Looking to secure Congressional funding, NIA and the International Association of Heat and Frost Insulators and Allied Workers are working together to launch a national education and awareness campaign to promote mechanical insulation as a cost-effective energy-saving option for industry. An initial scope of work for such a program is in development with ITP. Through this program, there will be Webinars (some of which ITP may host), videos and other marketing efforts to increase the awareness of mechanical insulation’s benefits.

“Mechanical insulation is one of the best-kept secrets in energy efficiency, and we need to turn it into one of the first things people think about when they want to save money. It not only saves energy but reduces greenhouse gas emissions and extends the life of equipment. The numbers speak for themselves. We just need to get the word out,” says Glenn Frye, president of NIA.

How it Affects You
Congress recently introduced a bill known as the Building Star Energy Efficiency Act of 2010 to jumpstart the retrofits of commercial and industrial buildings. This $6 billion bill would offer financial investments and other rebates for hiring laid-off construction workers and other tradesmen affected by the current construction downturn – including those working with mechanical insulation – to perform retrofits and improve energy efficiency in the economy.15 New retrofit incentives could boost manufacturing’s rebound. With strained long-term capital budgets, energy managers may consider mechanical insulation as an attractive investment to boost plant productivity. In addition, the tax incentive H.R. 4296 has been introduced to provide longer-term incentives for increasing mechanical insulation maintenance activities and going beyond the 2007 ASHRAE 90.1 levels. There has never been a more important time to think about insulation differently.

This article first appeared in the Spring 2010 issue of the U.S. Department of Energy’s Energy Matters newsletter. For more information, visit the http://www1.eere.energy.gov.

Endnotes
1 Energy Information Administration. (March 2010). U.S. Natural Gas Prices, Industrial Price. Retrieved from http://tonto.eia.doe.gov/dnav/ng/hist/n3035us3m.htm; Energy Information Administration. (April 2, 2010). World Crude Prices. Retrieved from http://tonto.eia.doe.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=WTOTUSA&f=W.

2 Ramsley, Gary. (December 2009). “Practical, ‘Hands-On’ Approaches to Energy Conservation.” Insulation Outlook. Retrieved from http://www.insulationoutlook.com/io/article.cfm?id=IO091203.

3 National Insulation Association. Technical Energy Solutions: The Power of Insulation. Association Brochure. Sent via email from Julie McLaughlin with the NIA, page 5.

4 King, Ronald. (August 2009). “Mechanical Insulation Can Save $4.8 Billion in Energy Costs and 43 Million Metric Tons of CO2 Emissions, and Create 89,000 Green Jobs Per Year. Insulation Outlook. Retrieved from http://www.insulationoutlook.com/io/article.cfm?id=IO090801

5 National Insulation Association. (December 2009). “Mechanical Insulation Life Cycle Assessment.” Press release. Retrieved from http://www.insulation.org/articles/article.cfm?ID=PR091202.

6 National Insulation Association, Brochure, page 1.

7 National Insulation Association, Brochure, page 2.

8 King, Ronald.

9 Rexroat, Alex. (February 2010). “A Contractor’s Perspective: Mechanical Insulation 101.” Insulation Outlook. Retrieved from http://www.insulationoutlook.com/io/article.cfm?id=IO100201.

10 Rexroat, Alex.

11 King, Ronald.

12 National Insulation Association, Brochure, page 6, 4; “3E Plus Program Overview.” Pipeinsulation.org. North American Insulation Manufacturers Association. Web. 14 April 2010.

13 National Insulation Association, Brochure, page 5.

14 King, Ronald.; Hunn, Bruce. (March 2010). “35 Years of Standard 90.1” ASHRAE Journal. Retrieved from http://www.ashrae.org/docLib/20100331_036047_hunn.pdf. page 46.

15 Energy Future Coalition (March 2010). “Senator Merkley (D-Ore.) Introduces Job Creation Legislation Spurring Owners to Retrofit Buildings with Energy Efficient Roofing, Lighting, Heating and Cooling Systems.” Press release. Retrieved from http://www.energyfuturecoalition.org/files/webfmuploads/EFC%20Building%20STAR%20Press%20Release%203.4.10.pdf