Visions of energy reduction initiatives are in the air. Recently, I had a conversation with a glass container manufacturer that was targeting a 50 percent reduction in energy usage within 10 yrs. Think about that – do everything you’re doing now, plus grow, while consuming half of the energy you are using now.
By now, nearly every manufacturer has implemented some sort of energy reduction or “green” program. But most of the “low hanging fruit” has now been picked. The question is: what are you going to do now, and for the next decade?
There continues to be significant focus on reducing consumption of water, air, gas, electricity and steam. Of course, this isn’t really anything new to manufacturing companies who have always worked to innovate to reduce input costs. But, with the sharp upturn in energy costs, increasing regulatory pressure and continued uncertainty both in energy supply and market demand, the pressure is higher to eliminate wastes of all kinds, including energy.
Many regions in the world are now pricing carbon, with the objective of letting the private markets drive incentives for reduced output. Last year, Germany sold 300,000 carbon permits at approximately $22 a metric (long) ton. Many manufacturers are also facing or anticipating real-time or dynamic pricing for electricity where prices may change hourly (with advanced price signals available to the manufacturer to enable the planning process).
All of this points to the fact that manufacturers need a comprehensive and flexible energy management program in order to reduce energy costs, leverage pricing opportunities and maintain a competitive cost structure. As Troy Miller noted in an article entitled “Success in energy conservation,” many manufacturers begin by focusing on the collection and visualization of data. I agree, and would suggest that manufactures should look at an energy monitoring solution that can be scaled up across the enterprise while still allowing incremental deployments and continuous process improvement. After all, trying to predict energy pricing and policy best practices in even a few years’ time is anyone’s guess today.
So how do you start? Begin with a pilot program that captures the proof points and collects data for you to measure, which can then be rolled out to additional plants. Over the next decade, you will undoubtedly be making many continual improvements that will then need to be shared quickly across each of your sites.
As the old saying goes, if you can’t measure it, you can’t improve it. You might also say that if you can’t see it, you won’t measure it. Manufacturers need sufficiently granular and contextualized energy consumption data in order to support their comprehensive energy planning process. As Miller states, the success of your energy management progress will depend on your “…organizations’ ability to adapt to changing energy requirements…”
So, be sure when you are designing your energy management program that you have both the ability to accurately meter and contextualize energy consumption. This includes the ability to quickly iterate and share your operational improvements, to continue to evolve them to respond to our changing energy markets and the related regulatory environment as they evolve over the next decade.
Jordan can be found on Google+