Global energy consumption is projected to increase 50% by 2035. "How will we do this?" asked Mary Burgoon, market development manager, Rockwell Automation, and moderator of today's Power and Energy Management Forum at Automation Fair in Anaheim, California. We need to make more with less, to optimize our manufacturing facilities' energy performance all over the world, with optimized machines and secure supplies of energy, she said.
"Global energy and manufacturing industries are incredibly dynamic and poised for tremendous transformation over the coming years," said Matthew Littlefield, president and principal analyst, LNS Research. Change will be driven by shifting cost structures for energy, labor and capital as well as broad adoption of "disruptive technology and innovation paradigms."
To help industrial companies navigate this changing world, LNS Research has completed a year-long benchmark research study of more than 250 industrial companies that highlights the potential for industrial energy management. Forum attendees saw benchmark data of energy intensity by unit of production, energy efficiency gains and how following best practices can drive improvements in energy efficiency.
"The perception of sustainability has evolved from environmentalism and carbon to a more holistic view of energy efficiency, waste management and corporate social responsibility," Littlefield said. "The most sustainable companies are also the most successful companies. The triple bottom line—people, planet, profit—focuses beyond profit, but it also focuses on profit."
Reductions in greenhouse gases and energy are driving financial performance, and the reductions are in total costs as well as energy costs. Ford has adopted a goal of reducing energy intensity—the energy to produce a vehicle—25% by 2016. Unilever has avoided materials, energy, water and waste disposal costs totaling more than €300 million so far.
In energy-intensive industries such as chemicals and petrochemicals, metals and cement, the cost of energy comprises as much as 50% or more of the cost of production. Even low-energy-intensity industries like automotive and food and beverage spend as much as 10% of their procurement costs on energy, and all industries could save 10-40% of their energy costs by improving efficiencies.
The challenges for energy management include obtaining useful energy metrics, data collection systems, culture, visibility, executive support and lack of collaboration to drive goals throughout the business.
Energy managers know the keys to success are leadership, a formal program, a cultural of awareness, metrics (including energy intensity, with the ability to drill down to the machine level), enlisting procurement and operations, and technology. Littlefield said, "We do pretty well with the first two, leadership and a formal program, but tend to fall down on the rest."
Detailed guidance can be found in Energy Star and ISO 50001 programs. "You really need continuous monitoring to develop and execute long-term strategies, to not just hop from one low-hanging fruit (lighting, motors, compressed air) to another," Littlefield said.
Companies need enterprise-level programs and reporting to measure energy use and savings and to prioritize investments in efficiency across the enterprise. But they also need granular measurements, by material, machine and product, to influence procurement and operations to work together more effectively and move energy from a fixed facility cost to a production input. Only then can you give operations the understanding they need to effect change.
"You have to transform the business process to drive energy all the way down to the bill of materials," Littlefield said. He left the audience with a set of actionable recommendations:
- Focus on leadership and a formal energy management program as a foundation for success
- Transform business processes to connect operations with procurement for energy management
- Support business processes with investments in energy management software
- Ensure both energy and production data is collected with sufficient granularity to provide the analytical capabilities for measuring energy intensity of specific products and assets
- Focus on KPI visibility and the connection between energy consumption and production performance to drive a quick ROI.