By Mike Brown, Project Manager, Georgia Manufacturing Extension Partnership (GaMEP) at Georgia Tech
In both industrial and commercial operations, energy is a critical input that is used in numerous site-specific applications, such as transforming raw material, operating computing and communication equipment, and providing comfort and lighting. While successful organizations always pay particular attention to their primary factors of production, energy inputs are often overlooked because they are complicated to understand and easy to take for granted. Taking a laissez-faire approach to the management of energy is the easy way out, but it can have significant bottom-line consequences.
Effective energy management offers a range of advantages including reduced operating cost, mitigated environmental impact, and improved conversion efficiency. It can provide a measured operating cost advantage over competitors and increased sustainability of operations. Although implementation requires both commitment and investment, most companies can develop and put into practice an effective energy management plan, creating major impacts to a company’s bottom line. By following these six essential elements of energy management, you can help drive an effective energy management strategy in your organization:
Develop a clear and consistent organizational objective
Too often, managers believe that an energy management plan consists of installing energy-efficient equipment, pasting “turn off” stickers over light switches or having a companywide meeting to announce an energy savings initiative. Unfortunately, these simplistic approaches lack the structure to change the culture of an organization. To properly begin an energy management initiative, there must be a commitment from your top management, agreement that energy is a resource worthy of attention, and consensus that improving your organization’s energy performance will be a consistent objective for all employees.
By developing and communicating a clearly defined energy objective, you will focus efforts and offer a constant reminder to improve. A consistent objective for energy management helps ensure a continued focus on energy management to prevent the predictable result of many improvement programs that begin strong but weaken and eventually expire without achieving the desired result.
Use existing energy data
One aspect of energy that makes it amenable to improved management is the wealth of useful data available from utility bills and other sources that are easy to access. Peter Drucker, a renowned management guru, famously said, “You can’t manage what you can’t measure.” By simply understanding the details behind your energy bills and knowing how to ask the right questions, you can get the measurements you need to track performance, identify cost saving opportunities, or quantify savings. Here are two examples of how information from energy bills can help create an immediate impact:
- Electrical bills provide the monthly cost but also detail monthly electrical consumption, peak demand, site power factor and energy and non-energy cost adders. With a little manipulation, you can calculate electrical load factor, average electrical cost and marginal costs of demand and energy. By contacting your electric utility, you can acquire interval demand data, which will show the peak demand for each measurement period during the year. Georgia Power, for example, collects information in 30-minute demand intervals, which means you can get 17,520 yearly data points. Analyzing this information provides insight into how demand varies month-by-month, week by-week and hour-by-hour, allowing you to develop a strategy to reduce cost by cutting peak demand.
- Natural gas bills show consumption in cubic feet, commodity cost, transportation cost and demand measured in dedicated degree days of consumption (DDDC). Combining energy data with output, production or occupied space numbers allows you to create an energy performance indicator, which can be used to track improvement or benchmark against similar facilities, yielding significant cost savings opportunities.
Employ a team-based approach
Purchase, use and maintenance activities related to energy are usually spread across multiple departments or groups within your organization; so limiting energy management responsibility to a single individual or department may reduce the impact of an energy management plan. Instituting a team-based approach with multi-functional representation is the only effective method to bring the diverse elements together and create a workable environment for energy management improvement across the organization. Selection of appropriate personnel for an energy management team is essential to initiating and sustaining the effectiveness of your efforts.
Consistently operate and maintain existing equipment
There is a common perception that purchasing new energy-efficient equipment is the best option to reduce energy costs and improve energy performance. This approach, however, overlooks an essential element of energy management: the requirement to properly operate and maintain energy consuming equipment, systems and processes. If you cannot effectively operate and maintain your existing equipment, how can you be expected to do the same for new, more complex energy-efficient systems?
To substantiate the importance of proper operation and maintenance, Texas A&M University tracked the performance of newly installed energy-efficient equipment in selected state buildings over a period of several years. The researchers found that energy-efficient retrofits lost approximately 60 percent of their projected savings within five years of their installation due to poor operation and maintenance practices. This study illustrates the importance of correct operation and maintenance to maximize efficiency and decrease the cost of operation. Determining appropriate operating and maintenance practices for your current energy systems is an effective way to reduce operating cost without significant capital investment.
Formulate achievable action plans for improving energy performance
The urge to embrace grandiose improvement plans is great given the societal pressures for reduced environmental impact, greater use of renewable energy and favorability of increased sustainability. Instead of pursuing appealing, high risk options, however, a more prudent approach would be to identify and implement energy management projects that align with an organization’s energy management objectives.
By selecting projects that match defined objectives, you will help meet specified internal energy saving, cost avoidance, capital investment, and economic return requirements. Although not as visible as most renewable energy projects, regular maintenance such as air filter replacement and synthetic lubrication substitution and the optimization of system operating conditions constitute simple actions that yield significant energy savings. Though simple, they are difficult to sustain without a carefully defined action plan.
Monitor results and adjust plans accordingly
The only way to determine if your energy management plan is working is to develop and track energy performance indicators. Properly defined performance indicators adjust for changes in ambient conditions, production rate, operating hours and other relevant variables to yield an accurate representation of your site energy efficiency. If the performance indicators show improvement, your energy management plan is working and should be continued. If the indicators show no improvement or a decline in performance, the reasons must be analyzed, the cause identified and appropriate corrections implemented.
Using available energy data to determine energy performance and guide development of a management plan is essential to ensuring that organizational objectives are being met and facility resources are being optimized. Organizations often have a wealth of energy data that is often not being utilized to monitor energy performance. By following a systematic approach to applying the proper elements of energy management, you can create an effective, sustainable energy program.
This is part of a series of articles for manufacturing improvement. Download a pdf of Six Essential Steps Drive Effective Energy Management.