Plan Your Energy Management Maturity Journey

By Bill Wright, Manufacturing System Consultant, InSource Solutions

Regardless of the industry your plant competes in, your plant leadership and operating departments have one thing in common: they’re being asked to cut expenses from an already tight operating budget. Most are also being charged with energy efficiency and sustainability mandates. That is a very challenging job since they already have the responsibility to manage process improvement, process systems, safety systems, quality systems, maintenance and production departments…the list goes on.

For industry executives where energy is a high % of their operating budget, energy costs have always been top of mind. And when energy costs are rising they can be a critical concern for all. But with energy consumption projected to rise by 30% by 2020, all plant leadership is now being called to have an energy management strategy.

Therefore, beginning or advancing an energy initiative for industrial process facilities represent a massive opportunity and should be a no-brainer. According to the US Manufacturing Energy Consumption Survey (MECS) 84% of energy consumed is on the process floor and electric motors now account for around half of all electricity consumed in industry which makes up 20% – 30% of the total operating costs for the average plant depending on the industry and the size of the plant.

Furthermore, a recent study comparing the ROI investment of $100k found that an energy saving project provided the fastest return of 1 – 1.5 years when compared to other popular cost saving projects.
Additionally, true process energy optimization initiatives often go hand -in-hand with reduced maintenance cost, less downtime events, improved quality, and increased throughput.

This being true, why would over 80% of the organizations polled spend less than 5% of their internal investments on energy management initiatives? Why would 20% of CFOs claim they were not sure about the energy management solutions practiced in their organization?

I believe the answer is clear. The path to energy maturity often begins with very little understanding / knowledge of what an efficient energy savings and sustainment program looks like. You can’t fix what you can’t see. Energy costs are sometimes viewed as uncontrollable – a business cost that cannot be questioned or changed. However, if operation and management personnel become familiar with how their facility uses energy, they can always find ways to manage and reduce their energy consumption.

Many plants just fix the basics to save energy, installing a LED lighting system, repairing or replacing motors, and replacing air compressors with more efficient ones. This action is known as an “passive efficiency” approach. These are projects completed one time that do provide savings but are not sustainable.

To start a sustainable energy management journey, the organization must have an effective “Active” energy program that includes technology that enables visibility and awareness to how, when, and where a plant consumes electricity, gas, water, steam, and air. Active energy efficiency seeks to use energy more intelligently, to achieve the same results with less.

The first step demands the energy management vision and strategy align with the organizations system for management (SfM). It is not enough to have just a team practicing energy management. Energy management must be a business objective / pillar that impacts culture and maximizes performance sustainability.

Second, the company’s leadership team must establish direct and visible ownership and demonstrate commitment to improvement.

Third, the company’s leadership team must establish clear organizational goals and the strategies to accomplish those goals. At this point it would be wise for leadership to consider partnering with a solutions provider that has a long history and expertise providing the right processes, effectively engaging the people, and leveraging the right technology to ensure the path to energy maturity is a successful one.
A good energy management program matures over time. The model below represents four primary phases of the energy maturity journey.

Each level is important; however, the energy improvement level is where substantial benefits can be realized. In this phase, energy and process data are correlated to provide distinct visibility in which the energy is measured in the context of production output, such as the energy intensity KPI. Now, this KPI can be tracked, trended, and analyzed to drive actions.

The key to this level is that it requires a strong technical and logical link with a process automation system that effectively combines process and metrics and delivers it visibly to the users as a dashboard.

Company’s reaching this level of maturity are enabled to save energy cost, accurately identify true product cost, make intelligent proactive production decisions, provide efficient planning, market green initiative programs, and improve their competitive position.