What is energy management and why do companies need an energy management system?

Posted in on Mar 29 2023,by Charles Sanderson Charles Sanderson
What is energy management and why do companies need an energy management system?

Charles Sanderson

Charles Sanderson

Director of Process Optimisation

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What is energy management and why do companies need it?

Most manufacturing processes use energy to process raw materials into finished goods, and this energy can be a large operating expense. Good energy management can lower this expense, improve performance through process optimisation, improve carbon management, and quantify carbon impact from process changes and supplier selection.

At its most basic level, energy management is the practice of reviewing and understanding how much energy your process is using and linking it to the quantity of production that you are achieving.  With that understanding, you can start digging more deeply.

  • Are there trade-offs that could be made to lower your energy bills or your carbon footprint, or to increase the reliability of your process? For example, switching from coal to natural gas in your boiler or installing solar panels to reduce your load on the grid.
  • Are there particular conditions or products that increase your energy bill? For example, switching production every 6 hours to minimise inventory vs. every 24 hours and using a warehouse, or making deep frozen rather than chilled product.
  • Are some lines/pieces of equipment using more energy than expected, and could they be modified/replaced/updated? Are there different operating practices that could be put in place to save energy? For example, using hot product to preheat fresh material?

Why do companies need an energy management system?

Simply put, an energy management system can help companies save money, optimise processes and reduce their carbon footprint.

In most manufacturing processes, raw materials, labour and capital are usually the main components of operating costs. This being the case, many operating facilities focus first on producing in-spec products at as high a capacity as possible with initiatives around equipment uptime and maintenance; waste minimisation; and productivity. Energy use and the utility infrastructure that supports the plant operation are often of secondary concern. Boilers are often only noticed if they fail to deliver the required steam; chillers are ignored unless product temperature specifications are not met. Learn how to check if you have an efficient boiler before it costs you.

With a drive towards greater personnel efficiency, many sites have de-emphasised the need for on-site specialists who understand and monitor the utility infrastructure closely, relying instead on periodic tune-up visits from vendors or even outsourcing the whole operation to third parties. These third parties may have motivations other than energy minimisation. They may focus exclusively on availability, for example operating the boiler so that it always has enough steam to meet a surge in demand by running it hard even when that’s not necessary.

While the spend on energy might not be the largest operating expense, it is often a significant spend and an area where there may be significant opportunity. It is not uncommon that 15-25% of the energy bill can be eliminated if a good energy management system is put in place. This can result in hundreds of thousands in annual savings with payback under 2 years.  Furthermore, there is an increasing need to focus on carbon footprint – in many locations this is being monetised in the form of tax incentives or customer branding.  A good energy management system, such as CoolPlanetOS, can assist with decarbonisation and help quantify carbon impacts resulting from process changes and from supplier selection.