Volvo Meets Ten Year Goal In One Year

Saves $10 Million on 850K Energy Investment

Energy reduction is not as difficult as we initially believe it will be. Our mental models are a bigger problem than getting it done.

As part of the part of the U.S. Department of Energy's Save Energy Now LEADER Initiative, Volvo Truck's New River Valley plant set a 10 year goal to reduce energy intensity by 25% over ten years.

Not only did they exceed the target in a just one year, but they did it in a way that pays huge financial dividends.

The investment in energy efficiency cost about $850,000 and will save approximately $2 million per year according to the Department of Energy. Assuming a very conservative 5 year lifespan of the improvements they will see a total of $10 million in savings over that period. That is an annualized ROI of 215% and a total project ROI of 1,077%. Those are numbers any CFO can be happy with.

According an blog post "The NRV plant also initiated a contest to promote employee engagement in identifying and suggesting ways for the facility to improve its energy efficiency. From late 2009 to early 2010, the implementation of employee-suggested projects saved the NRV plant more than 546,543 kilowatt hours per month, which translates to approximately $33,000 in monthly cost savings."

Significant energy risk and cost reduction are closer than you think. The sooner we take off the blinders of our embedded mental models the sooner we can start enjoying the benefits.