Assessment of the Market for Compressed Air Efficiency Services

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INTRODUCTIONOVERVIEW OF THE PROJECT AND REPORTThis market assessment was designed and carried out in consultation withthe Ad Hoc Evaluation Committee of the Compressed Air Challenge ® . TheCommittee reviewed the research plan, the assessment interviewingapproaches, draft questionnaires, and drafts of the various sections ofthis report.ObjectivesThe project was designed to answer a number of key questions concerningthe demand and supply sides of the market for compressed airefficiency services.Among the key research questions to be addressed on the demandside of the market were the following:• To what extent are customers in key end-use sectors aware of compressedair usage, costs, and savings opportunities?• What practices do these customers follow to monitor, maintain, andenhance the efficiency of compressed air systems?• What, if any, services do these customers purchase to maintain orenhance the efficiency of compressed air systems?• What barriers do customers experience in purchasing such services?• How and by whom are decisions concerning the purchase and modificationof compressed air systems made? What are the key criteriain such decisions?The key research questions on the supply side of the market were asfollows:• What efficiency services do compressed air distributors, installers,and consultants currently offer?• What is the current volume of sales for these services (number ofcustomers, number of projects, dollar volumes)? How has volumechanged over the past few years? What are vendors’ expectationsregarding growth?• To which kinds of customers (as defined by industry segment, sizeof system, complexity of system) are these services most often sold?• What kinds of skills, equipment, and other resources are needed todeliver efficiency services?• What role do these services play in the overall business strategy ofmanufacturers, distributors, and consultants?• What barriers do these businesses face in developing and sellingcompressed air system efficiency services?If the recommendedimprovement measuresin Table 1-3 wereimplemented, energysavings would total15,670 GWh per yearor $747 million atcurrent industrialelectric rates.Research ActivitiesThe report is based on a combination of primary and secondaryresearch, including:• An assessment of 91 compressed air equipment distributors;• An assessment of 222 industrial end users who have compressedair systems;U.S. DEPARTMENT OF ENERGY11
Compressed Air Market Assessment• Interviews with 5 veteran compressed air efficiency consultants,designed to capture their perceptions of the current state andrecent changes in both the demand and supply side of the marketfor compressed air system efficiency services;• Reanalysis of data on compressed air use and maintenance practicescollected in 1997 as part of the field inventory for the Motor MarketAssessment;• Review of regional studies of the market for compressed air systemefficiency services. The two principal studies used in this regard were 4 :■ The Compressed Air Systems Market Assessment and BaselineStudy for New England (2000) by Aspen Systems Corporation forthe New England Study Group. This was a comprehensive study ofthe market for compressed air efficiency services in New England.Research included interviews with 56 individuals, including utilitycompany representatives, service providers, equipment vendors,consultants, and end users. This original research was supportedby review of existing literature and local energy use studiescommissioned by the utilities that formed the study group.■ Compressed Air Market Transformation: Quantitative BaselineResearch (1999) prepared by Customer Opinion Research forPG&E. The research for this study consisted primarily of a telephonesurvey of 270 of PG&E’s industrial customers with compressedair systems of at least 50 horsepower. The primary purpose ofthe study was to establish a baseline for compressed air systemoperation and maintenance practices and to quantify the marketpotential for compressed air system efficiency services.STRUCTURE OF THIS REPORTThe remainder of this report is divided into the following sections:• Section 2: The Demand Side of the Market. This section presentsfindings from the sources discussed above concerning the demandside of the market. In particular, we focus on descriptors of compressedair system design and use, customers’ current practices inregard to compressed air system management and maintenance,customers’ current use of compressed air system efficiency services,as well as barriers and motivations to greater use of such services.• Section 3: The Supply Side of the Market. This section presentsfindings from the sources discussed above concerning the supplyside of the market. We concentrate primarily on distributors’ currentofferings, their perceptions of trends on the demand side of themarket, and barriers and motivations they perceive to developingtheir efficiency offerings further.12U.S. DEPARTMENT OF ENERGY4 Aspen Systems Corporation, The Compressed Air Systems Market Assessment for New England, Compressed Air Baseline StudyGroup, April 2000; and Customer Opinion Research, Compressed Air Market Transformation: Quantitative Baseline Research, preparedfor Pacific Gas & Electric, 1999.
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Assessment of the Market for Compressed Air Efficiency Services

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