In the past, most management viewed energy as a purely operational issue. But the globalization and volatility of pricing, combined with significant environmental and supply security concerns, is making energy a strategic management issue, said Peter Garforth, principal of Garforth International LLC (http://garforthint.com), an energy management consultancy based in Toledo, Ohio.
Communicating that context to top management, however, is still a major challenge facing many corporate energy managers, Garforth told an audience of nearly 50 industrial facility managers and personnel, consulting and specifying engineers and electrical contractors during a keynote address at a recent Chicago area energy management seminar.
Garforth said that today’s global energy realities include unpredictable energy prices, dependence on imports, climate change legislation, underinvestment in North American energy infrastructure, the emergence of China and India as major new energy customers, and “trigger events” such as hurricanes, droughts and other weather events that many believe are being caused by climate change. The bottom line for North America is that today’s energy environment “is fundamentally different from where we’ve been for the past couple of hundred years,” he said.
This will create numerous challenges for industrial energy managers, Garforth said. One challenge, for example, relates to the likelihood that the United States soon will see the passage of climate change legislation. The United States is the only industrialized country where carbon dioxide at the moment is not a regulated pollutant, according to Garforth.
Wall of skepticism
Energy managers today frequently face “a wall of skepticism” from corporate executives who “don’t believe in global warming,” Garforth said. But once legislation is passed, he said, “whether you believe it or not doesn’t matter. If the law says you’re going to be penalized for creating greenhouse gas emissions, you’ve got to make business decisions based on that framework. You can’t make business decisions based on your personal views.” So managing greenhouse gas emissions risk will be a challenge as legislation comes into play, he noted.
Garforth made his remarks at Schneider Electric’s 2009 Energy Management Seminar, held May 20 at Juno Lighting Group’s headquarters in Des Plaines, Ill. The full-day seminar sponsored by Schneider Electric (www.schneider-electric.com), Palatine, Ill., a provider of electrical and automation products, included sessions on why an active approach to increased energy efficiency in commercial buildings and industrial facilities is most effective.
According to Schneider, an active energy approach covers all forms of energy used by an industrial facility, and is comprised of a four-step process:
1. Auditing and measuring energy usage
2. Implementing passive energy efficiency measures, such as efficient, low-electricity consumption devices
3. Implementing active energy efficiency measures, such as lighting control and variable frequency drives
4. Monitoring and improving energy usage.
Taking an active approach does not mean an extended return on investment, however, according to Schneider management. “The U.S. Department of Energy found that 65 percent of electricity is used in industrial facilities, and most of that is in electrical pumps and fans,” said Mike Mattingly, Schneider Electric senior drives specialist, whose presentation was titled “Go Green with Variable Frequency Drives.” Variable speed drives typically pay for themselves “in less than two years,” Mattingly told the audience. “With rebates that are available, it’s very possible that payback could be less than a year after a drive was installed,” he added. “Pumps and fans operating on variable speed drives can translate to cost savings, electricity conservation, increased comfort level within the building, reduced equipment maintenance and downtime, and additional savings through rebates.”
Other presentations at the event covered power factor correction and harmonic filtering; energy efficient lighting and lighting control; power metering/monitoring; and utility Commonwealth Edison’s “Smart Ideas for Your Business” Program, which is focused on commercial and industrial building energy efficiency