Experts say that companies who fail to reduce their energy consumption face a competitive disadvantage. Yet a recent survey found that 50 percent of American companies have never made a serious effort to factor energy waste into their cost of doing business—and then do something about it.
If inertia and complacency, as the Delta Institute report suggests, are the root causes for this failure, what is the tipping point that moves one company from the bystander column to being an active player in reducing energy use?
The experiences at many companies suggest there are three primary reasons for taking action: reducing costs, corporate sustainability mandates and individual initiative. And as these examples reveal, manufacturers of any size can make a big impact on the bottom line by taking steps to control their energy costs.
For Howard Skolnik, president of Skolnik Industries, a maker of steel drums on the south side of Chicago, the tipping point was a SBIF (Small Business Incremental Fund) grant program launched by the City of Chicago to help small businesses reduce their energy costs. The grants reimburse companies for half of up to $300,000 in energy reduction project costs. The grants are now available only every three years due to city budget constraints. (See http://www.dsireusa.org/ for information on energy incentives by state.)
When Skolnik bought the company in 1985, there were 20 companies making steel drums in the U.S. Today, there are only six. Under his guidance, Skolnik Industries has focused on making carbon and stainless steel drums whose quality meets the strictest government and industry requirements. The drums are used to store everything from food, such as wine and maple syrup, to hazardous materials, including nuclear waste.
When the recession hit in 2008, Skolnik Industries and its 100-plus employees faced the same problem confronting many companies—finding ways to quickly reduce costs, including energy. According to Skolnik, the fact that the Chicago program provided grants rather than low cost loans made all the difference to the company’s ability to make the capital investments needed to conserve energy.
Skolnik’s awareness of the cost of energy to the economics of his business came even earlier, when in 1987 a fire at his factory forced the company to find a new building. Given that drums could only be stacked three high, he found a building with lower-than-typical industrial ceilings and immediately discovered how reducing the amount of unusable space he needed to heat and cool could impact his operating costs. Energy savings in the first year were $25,000.
An architect, designer and urban planner by profession, Skolnik had long been applying design concepts to improve his company’s manufacturing processes. Moving from solvent to water-based paints meant better degreasing and allowed lower oven temperatures for drying, eliminating fumes and saving $15,000 annually in energy costs. A new oven and air circulating system saved another $4,000 every year, while an ultrasonic leak detection system for compressed air lines added $10,000 in annual savings.
The first city grant allowed the company to enclose and seal the truck receiving and shipping docks, which saved $5,000 annually while improving work flow and working conditions. The $150,000 cost was partially defrayed by the 50 percent grant. Another $36,000 investment, again with 50 percent reimbursement, for energy-efficient lighting meant another $12,000 in annual savings. All told, expenditures of $364,000, for which the City of Chicago reimbursed the company $150,000, are saving Skolnik Industries $115,000 a year on energy bills.
Projects already in the planning stage, waiting for 2014 when the company will again be eligible for a city grant, include:
• Recovering waste heat from the air compressors in the boiler stack: $5,000 project cost and $10,000 projected annual energy savings.
• Replacing the current boiler with a high-efficiency boiler. With a capital cost of $143,000 before reimbursement, this will add $8,000 a year to energy savings.
• Replacing an open-flame dragon burner with air knives to dry steel. This will cost $2,000 but return $15,000 in energy savings each year.
“Regular improvements are necessary to keep the energy of a company going,” says Skolnik. Beyond saving money by improving processes and reducing energy costs, he adds, doing things right reduces what he calls “plant nervousness”—employees worrying that something in the production process could go wrong. “When employees recognize the company cares about them, it goes both ways. The changes we’ve made elevate their ability to be productive,” Skolnik says.
To help maintain its position as the world’s largest office furniture supplier and mark its 100th anniversary in 2012, managers at Steelcase set aggressive goals for improving the company’s bottom line through improved efficiency and sustainability efforts.
Steelcase met its goals to reduce energy consumption by 15 percent and its carbon footprint by 25 percent by the deadline, according to corporate communications manager Bruce Reynolds. “To be successful, we have to constantly improve our production practices. The recent recession emphasized the importance of consistently driving manufacturing efficiencies—driving cost out of production meant savings to our bottom line,” Reynolds says.
Among the efficiency projects Steelcase implemented was a new control system to more cost-effectively operate the four boilers (two coal-based and two gas-fired) at the energy center at its Grand Rapids headquarters. The boilers produce and distribute steam throughout the manufacturing process areas. “The energy center is truly the lifeblood of our Grand Rapids facility,” explains Eric Newsome, senior automation engineer. “If it goes down, so does production, and with the volume of orders we’re meeting each day, downtime simply isn’t an option.”
A 25-year-old DCS system, whose service costs were expensive and for which chief boiler operator Bill Boss had difficulty finding spare parts, needed to be replaced. Steelcase also wanted to comply with ISO-14001, an international standard designed to help companies identify, control and improve the environmental impact of their activities and products by implementing a systematic approach to setting and achieving environmental objectives.
“Compliance is recognized as a sign of commitment to the environment, and it’s a key part of our strategy for balancing people, planet and profit,” says Reynolds.
Before making improvements, Steelcase relied on manual data collection practices to monitor water, air, gas, electric and steam (WAGES) consumption throughout its facilities. “We had one guy responsible for visiting the meters installed in each building every month,” explains Newsome. “He wrote down the readings, entered the data into a spreadsheet and then reconciled the utility bills. The process worked fine—until he went on vacation.”
Kay Bolinger, senior facilities engineer, says the company needed a way to automatically gather real-time data so it could identify opportunities for improvement: “As our manufacturing infrastructure became leaner and our IT infrastructure expanded, we realized it was time for us to consider a comprehensive WAGES metering strategy.”
Steelcase chose a control system upgrade, energy monitoring software and power meters from Rockwell Automation to replace the DCS and gather WAGES data automatically. Because the new system was covered by an existing technical support contract, eliminating the DCS reduced the company’s annual service costs by $25,000.
Wireless power meters also make it possible to gather consumption information on individual production lines. Ultimately the Steelcase team hopes to capture exactly how much energy it takes to produce a specific product, so the company can include energy costs on its bill of materials.
With the new energy management system, Steelcase can document and quickly address energy events such as voltage sags, surges or outages, reducing downtime and protecting critical production assets. The software also provides the team with visibility into energy consumption, a critical component for ISO-14001 compliance.
“We can see when something is running hot and consuming more energy than it should, which is an indicator something needs fixing on the equipment,” explains Newsome. For example, the team no longer needs to “guesstimate” the losses from air leaks. By being able to see the data, the team can use it to help justify the cost of a new system and other investments in newer, more energy-efficient technology.
Data Device Corp.
Mike Hake is a man on a mission when it comes to saving energy. Hake is senior facilities system support technician at Data Device Corp. (DDC), a company that provides communication and networking technologies to the military, aerospace and avionics industries. DDC is located in Bohemia, NY, and has about 500 employees.
Hake is convinced that saving energy is mostly about common sense, like turning off equipment and lights when they’re not in use, matching heating and cooling to occupation levels and outside temperatures, and adjusting hot water and air compressor operations to production requirements. To prove his case, he purchased his first open-source power meter from Opto 22 and taught himself to program it.
“Someone used to have to turn things off by walking around,” explains Hake. “Now, with power meters and the programs I’ve written to automate systems, we’ve shaved 28 percent off our energy use—and we’re still finding new ways to reduce costs. We’re already saving $20,000 a month, and it’s automatic. It requires integrating and scheduling, but there’s no voodoo involved.” Hake intends to apply the same methods to reducing energy costs for production equipment.
The meters have also found a few current level problems, like a chiller where debris had built up. He shares the information with the maintenance team, enabling them to see the data on their computer screens and take action. “We also put in alarms so text messages are sent to managers and technicians when temperature, humidity, pH, oil levels or other variables don’t match production requirements.
“We knew the air compressor was inefficient, for example, but the metering data showed us it was a real energy hog. It was supposed to run and then slow down, but it turned out it was running flat out all the time,” says Hake. “We purchased a new one with a variable speed drive, which reduced energy use by almost half. And because we had the data to prove the savings, the utility gave us a rebate that equaled 40 percent of the purchase price.”
Adds Hake, “We’re just at the start of this. Data is key to moving forward, but reducing energy consumption also requires changes in behavior and attitudes. Why waste money? Our goal is to control everything so we know we’re doing all we can to reduce energy use.” That objective became even more important when the local utility recently raised its contract rates from 8 cents to 13 cents per kilowatt-hour.
Hake believes it’s important to manage energy reduction projects internally rather than rely on an outside service company. “That way you can make sure your people understand the system so they can maintain it. Just keep it simple and common sense. Focus on the small steps and measure before and after. The savings are really motivating,” he says.
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