Rising Energy Prices Pressure Plants to Reduce Use

March 1, 2006
Plant managers are looking for ways to curb energy consumption without jeopardizing productivity or product quality.

Rising energy prices are driving up costs at virtually every manufacturing plant on the globe. Managers would like to ignore the problem, saying, “Who cares about energy costs? Our job is availability, throughput and quality.” Energy costs, however, have become too high to ignore. Managers are forced to look for energy savings in a number of areas—through optimizing process control, reducing use in facilities, adopting sophisticated energy purchasing strategies and switching energy sources.

Even though energy efficiency has become a higher priority, managers remain skeptical of the value of this new focus. They don’t want to sacrifice throughput and quality to take savings that may deliver questionable bottom-line results. Before they take their eyes off availability and throughput, they want to make certain the costs involved in cutting consumption have a clear return on investment (ROI).

Weighty priorities

So even as plant managers look for energy savings, they keep their focus on the critical priorities of production. “Energy efficiency is gaining as a priority, but for our clients, it does not outweigh the concern for product quality and productivity,” says Rick Coan, vice president, Controls Division, Controlled Environmental Structures Inc., a Mansfield, Mass.-based provider of clean rooms, environmental rooms and associated products and services. “Making sure there is no loss of productivity is more important [to plant managers] than energy consumption.”

Rising energy costs—and increased government oversight in places such as Europe—is getting the attention of executives who are pressuring plant mangers to reduce energy consumption. “At some point, the cost of energy will be too hard to ignore, and plant managers will need to fundamentally address the optimization of energy,” says Al Hamdan, senior engineer at Rockwell Automation Power & Energy Management Solutions, in Milwaukee. “I have seen few companies that can avoid taking energy costs seriously.”

The dual pressures to reduce energy consumption while not disturbing productivity have forced plant managers into a difficult position. “Corporate and accounting people see their margins getting squeezed, so they go to the plant manager and say, ‘You have to reduce your use,’ ” says Hamdan. “The plant manager is between a rock and a hard place. He needs to keep producing, but he also faces an edict from upper management to reduce energy costs.”

The battle cry to “reduce your use” is often quieted by those who question whether it is financially worthwhile to invest in energy reduction tactics. They question the ROI. “The high cost of energy is hurting plants, but you don’t want to incur additional costs in the process of trying to save on energy,” says Rich Rogin, director of engineering services for Integrated Energy Services, at Honeywell Buildings Solutions, in Minneapolis. “Often, the potential energy savings are a small percentage, so it’s difficult to make a financial story that looks good to management.” At most plants, it comes down to finding energy savings without interfering with productivity and product quality.

Controlling energy

There are two basic areas where plant managers can reduce energy consumption: in the manufacturing process, and in their facilities or buildings. In the manufacturing process, the amount that energy usage can be cut depends on the industry and the sophistication of the control system being used. Advanced control systems are already running at a high level of optimization, so the potential for optimizing to reduce energy consumption is narrow.

But that narrow savings can be significant if the industry consumes considerable energy in its process. “Pulp and paper, and food and beverage are high energy consuming industries, so they’re looking at energy costs,” says Kathy Hutson, manager for pulp and paper at Honeywell Process Solutions, in Phoenix. “Traditionally, you save energy by looking at boilers and incinerators, but we’re trying to optimize the process area so there isn’t as much need for the boiler and incinerator.”

In the process area, Honeywell is using existing programmable controllers to collect data related to energy consumption. “We’re pulling up information from advanced controls and making it available to management,” says Hutson. The goal is to show managers the proportion of energy consumed under different production scenarios. Managers can see whether energy consumption goes up proportionally when production is increased.

In plants with advanced controls in place, the savings from optimization is small compared to plants where controls are being added for the first time. If your productivity is high, you’re probably running an energy efficient process. “With those using control systems, we’ve seen energy savings of 2 percent to 5 percent,” says Hutson. “If there is no control system at all, companies can save up to 30 percent of energy use by adding a control system.”

The ability to optimize the manufacturing process to save energy depends on how much data you can obtain from the process. “The closer you can get your data collection to the source of the information, the more information you will get,” explains Michael Tennefoss, vice president at Echelon Corp., a control networks provider based in San Jose, Calif. When you have sufficient information, you may be able to reduce energy use without affecting production. “Once you have the data, you can look at the process and say, ‘Instead of running this at 100 degrees most of the time, you can lower the temperature until the next batch comes through,’ ” says Tennefoss. “Hypothetically, you can do this with any control technology.”

The other area of potential savings is in buildings and facilities. The energy consumed there comes from a wide variety of uses. “Building management systems control lighting, labs, cafeterias, temperature and ventilation,” says Rogin, of Honeywell Building Solutions. “The first step in controlling consumption is metering use and bringing more attention to where the energy is being consumed.” Once the data is collected, building energy use can be optimized, just as in the manufacturing process. You can control only what you measure, so manufacturers are beginning to gather more data on the energy they consume in facilities.

Switching sources

When a company is not running its plant constantly, there are savings that can be taken by matching production with the time when energy costs are lowest. If the plant produces its own energy, managers have the opportunity to schedule production during low-cost periods, while selling excess energy to the local power grid during high-use periods. “There are some types of day-pricing that let manufacturers reschedule certain operations from peak to off-peak hours,” says Harry Forbes, senior analyst at ARC Advisory Group Inc., in Dedham, Mass. “Plant managers are trying to get more detail on energy use. Some are even building plants in states with lower energy costs.”

As with process control, the trick in controlling facility use is having the necessary data and then acting upon it. “There are some manufacturing facilities where managers crunch the numbers to change their product mix at different times of the day,” says Colin Masson, research director for manufacturing operations at AMR Research Inc., in Boston. “They can use calculations to determine whether its makes sense to sell energy or produce product.”

ROI is one of the major concerns as managers look at potential energy savings. Will the effort involved in reducing energy use actually pay for itself? “Most companies are not focused on energy conservation. It’s not that they’re not interested, it’s that there are costs to becoming energy efficient,” says Jose Gutierrez, technology manager for embedded systems at Eaton Corp., a power management company in Cleveland. “If the ROI is more than 18 months, they are not interested.” Gutierrez notes that collecting the data to improve energy efficiency is usually too expensive if the sensors are not already in place.

There is one emerging pressure, however, that may change how managers view their energy consumption: government oversight. Rising costs are a concern, but environmental pressures on energy consumption may be the impetus that actually forces manufacturers to optimize their energy use. “Interest in energy efficiency is growing, not only due to rising energy costs, but also because of increased legislation—especially in Europe where energy conservation is mandated,” says Andy Wheeler, chief technology officer at Boston-based sensor network developer Ember Corp.

Managers are reducing energy consumption where they can do it without interrupting production. They are also learning to switch energy sources every time it saves a nickel. But most of all, plant managers want to make sure the effort to turn down the heat doesn’t cost more than the savings that come from reduced consumption.

For more information, search keywords “energy efficiency” at www.automationworld.com.

See sidebar to this article: Monitoring Energy Use Across Multiple Buildings