by Jay Zoellner and Bruce McLeish, Ameresco Inc.
As pressures mount to further reduce costs and carbon emissions, most industries seek to increase energy efficiency through sustainability programs. Achieving these goals, however, presents challenges. For many large commercial and manufacturing companies, substantial results from an energy and carbon reduction program remain elusive. For others, the savings achieved are often short-lived. It is important to understand the obstacles that prevent companies from achieving their sustainability objectives and to learn and implement best practices at successful companies.
At the corporate management level, increasing energy efficiency, reducing greenhouse gas emissions, complying with regulations and measuring and reporting to approved standards are priorities. At the plant and facility level where maintaining production schedules and quality are paramount, the additional time and resources that might be required to meet the sustainability objectives can present a dilemma.
An automated enterprisewide energy management system can help a company better quantify and report efficiencies, savings and carbon emissions to meet industry standards and its own productivity goals. Before a company starts to implement an energy intelligence system, important questions need to be answered, including: What are the first steps? What information should be collected? How should it be used?
Four steps can provide guidance and advice on how to deploy a large-scale energy management system.
Step 1: Establish a Baseline
The starting point is to establish a baseline to fully understand the company’s current usage. It should provide:
- A breakdown of current as-is energy expenditures on gas, electricity and water (companywide, by plant and at the subsystem level);
- A current as-is carbon emissions measurement by energy type and by production process; and
- A per unit-of-production energy cost analysis.
To measure the baseline correctly, companies must ensure their primary subsystem level equipment at their plants is metered so the energy intelligence system can collect the data.
Once this information is collected, the company will know its energy use and carbon emissions prior to starting initiatives to reduce them. This is important for measuring progress. The company will be in a position to understand the energy profile of its operations, specifically, which equipment, subsystems, processes and plants consume the most energy and produce the largest carbon emissions. With this information, the company is ready to develop its sustainability program. It can identify which equipment, processes and plants should be priority, based on their proportion of the total energy profile.
Step 2: Appropriate Best-in-class Goals
Once a company has quantified its baseline usage and identified the most energy-intensive areas to focus on, the next step is to determine the target goals for the sustainability initiatives. For example, at what level should the refrigeration system or boilers be operating? What is the reasonable target for energy usage-per-point of product manufactured?
To determine the appropriate targets, companies can begin by gathering performance standards from the equipment manufacturers, and in some cases from the U. S. Department of Energy (DOE). Published standards, however, are only a starting point; they typically do not answer how pieces of equipment can or should perform in each operating situation. It’s important to set realistic targets on data gathered from a company’s own top-performing equipment, factoring in the processes, use, interfacing subsystems and temperature and humidity conditions.
The energy intelligence system can deliver much of the critical information. By profiling real-time data from each plant’s equipment and processes, intelligence gained through automated data collection helps identify disparities among higher- and lower-performing systems across the enterprise. With this information, the company can determine the reasons for the differences and whether the performance metric of the equipment at the most efficient plant within the enterprise is a realistic and attainable target for other plants within the system.
Step 3: Focus First on Low- or No-cost Opportunities
To gain traction and maximize internal support around the sustainability initiatives, start with projects that enable quick improvements. These typically involve only process or behavioral changes that can provide measureable and immediate payback with little or no investment and without affecting production.
The energy intelligence system is needed for identifying simple, low- or no-cost opportunities that can provide quick solutions with immediate payback. Robust systems enable companies to view a full range of potential projects at plants across multiple manufacturing facilities. And they can identify best practice initiatives that can be implemented at multiple plants simultaneously, achieving faster and greater results than if only viewing and making decisions for each plant individually. In addition, a solution that leverages the experience of energy experts helps prioritize the potential projects so valuable manpower and budgetary resources are focused on the ones that will deliver the greatest and fastest return.
As an example of these low- or no-cost projects, many food and beverage manufacturers can realize significant reductions in energy use from adjusting and recalibrating refrigeration systems, boilers and compressed-air systems. Refrigeration typically uses the most energy and can represent up to 60 percent of the total load in many companies (with the exception of beverage companies where refrigeration is used primarily in the carbonation process vs. in cooling or storage). For example, food and beverage companies can expect to achieve a 6 to 8 percent energy savings by adjusting or recalibrating heavily used equipment.
One successful example, a large regional food manufacturer, identified a simple opportunity for significant savings and greater efficiency through an air compressor retrofit. By installing variable frequency drives (VFDs) on two large air compressors, fixing compressed air leaks and eliminating the constant cycling of the compressors, the retrofit achieved an energy savings of nearly 920,000 kWh per year and delivered a payback in less than one year.
Step 4: Target Capital Equipment With a Compelling ROI
After pursing the more significant low- and no-cost opportunities, the next step involves identifying the biggest energy-offending capital equipment and upgrading, repairing or replacing it. Here manufacturers typically can achieve a 6 to 10 percent savings on energy usage. This step, however, involves capital expenditures, and many companies confront funding challenges. Companies need a way to predetermine the return on investment (ROI) and length of payback to repair or replace capital equipment with much certainty.
Having the right people is critical, specifically those with industrial energy experience required to accurately quantify the ROI of repairing or replacing capital equipment. With an advanced energy intelligence system that combines software technology with human expertise, companies can calculate these expected returns in advance and track their savings against preset goals.
When evaluating capital equipment projects, take an enterprisewide approach to receive the greatest ROI. Companies should look at equipment replacement or repair opportunities at multiple plants, rather than focusing on an individual system at one plant. Taking a broader approach can provide better pricing through scaled procurement. The program will see greater success through increased energy savings, which will enable companies to quickly gain cultural buy-in and achieve sustainability objectives more rapidly.
Partnering is critical to successfully implement equipment repairs or replacements at multiple facilities. For an enterprisewide implementation, it is best to work with a broad-scale energy solutions provider that has a record of managing and implementing multiplant projects at manufacturing facilities. Any partner should:
- Understand how equipment to be replaced interfaces with and affects other equipment and processes;
- Be vendor-neutral, recommending the best solution for a specific need, not the brand it represents or that offers the highest commissions;
- Be able to quantify the expected savings and ROI for the project, along with producing a detailed implementation plan and schedule; and
- Stand behind its estimates before the company commits to the investment.
With this type of provider, companies gain the benefit of working with a single entity for the sustainability project, as opposed to a host of contractors who work independently. With more centralized management and responsibility, projects can be handled more efficiently with greater success.
The critical foundation for long-term success of a corporate sustainability plan involves an enterprisewide commitment that recognizes energy as a core resource and its efficient use as a primary goal. Knowledge of how and where energy is used and the emissions generated, down to the subsystem level, is essential.
A successful energy management system involves identifying low- or no-cost opportunities and then moves to financially compelling capital expenditures, uses common metrics to address the bottom line, captures real-time energy use and carbon emissions information and incorporates the expertise of experienced energy analysts. These guidelines enable companies to achieve their sustainability goals, ensure energy savings do not erode and allow for a competitive advantage.
Jay Zoellner and Bruce McLeish are responsible for enterprise energy management services at Ameresco Inc. Enterprise energy management comprises demand- and supply-side services that enable commercial and industrial customers to meet sustainability goals.