How energy audits upgrades can boost profits at industrial facilities

American facilities have found a potential new source of profit margin by becoming more efficient and cutting their monthly energy bills. Here are some recommendations to make this happen

By Frank Healy, Fluke Power Quality Marketing Manager, Fluke Corporation

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The owners of an average small- to mid-sized industrial facility could save 10%  on their power bill and $42,000 annually by auditing energy use and implementing recommendations to upgrade equipment and change operations, according to data from a U.S. Department of Energy program.

University professors and students in 24 locations across the United States are involved in the Industrial Assessments Centers (IACs). Data from those centers, the results of more than 16,000 on-site industrial assessments, suggest such significant savings, or even greater, are possible depending on the type of manufacturing facility.

For years, industrial and commercial facilities viewed their electrical utility bill as the cost of doing business. Then, those energy costs began to spike as fossil fuel costs rose to unprecedented heights – more than $100 per barrel in the case of oil.  Concurrently, energy efficiency technology innovations that deliver energy savings with no sacrifice in performance (and sometimes improves in product quality, production rate, safety, etc.) accelerated in development.

Also read: Energy Consumption Visibility Is First Step to Savings

Even though oil prices have settled,the surge of interest in energy retrofits remains unabated as governments and environmentally conscious companies look to curb greenhouse gases blamed for climate change and utilities seek to extend the capacity of existing power-generation plants. And of course the specter of higher fuel costs looms in the future.

New source of profit

Indeed, American facilities have found a potential new source of profit margin by becoming more efficient by cutting their monthly energy bills.
The U.S. government's Department of Energy has set up programs to help industrial companies curb energy costs and thus greenhouse gases. One of those, completes in-depth assessments on plant operation in order to identify energy efficiency improvements, minimize waste and pollution and improve productivity.The IACs compile the data for their assessment for use by industry in a database accessible online.

Users can glean valuable information from the database by approximating potential electrical and natural gas energy savings by taking a look at the average results obtained at similar industrial plants. The database also lets user identify frequently recommended efficiency measures for each industrial plant.

Another energy savings estimate tool is the Plant Energy Profiler, into which a user inputs annual energy use and cost data as well as a breakout of energy use by operating process or system in a given plant. A default breakout of energy use by production process is offered in the absence of the specific data. (Learn more here.)

Beyond the federal government programs, local utilities have launched customer service campaigns aimed at assisting facility manager to make better use of the power they are consuming.

Why do this? Utilities have capacity concerns and it's easier to curb waste than it is to build power plants. Even getting a new power plant approved through the tangled regulatory framework can take years. And the random oil spill or nuclear plant disaster show just how limited the options are for generating new power.

Thus, electrical utilities have a keen interest in avoiding having to add to their existing generation capacity. And facility managers have incentives to reduce power waste and become more efficient.  If a company's profit margin is 5%, saving $30,000 in energy costs equates to sales of $600,000, and many energy-savings measures may have simple payback of several years or less.

"Energy studies are essential for identifying opportunities for energy saving measures with proven returns on investments," said Rob Penney, senior energy engineer at Washington State University's Energy Program. "If you can't measure it, you can't manage it. Take advantage of the excellent audit tools and on-line information resources available to ensure cost-effective success."

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