Energy is a significant overhead for manufacturing businesses. However, getting to grips with the constantly changing energy landscape can feel like a big undertaking when, quite rightly, a manufacturer’s focus must remain on core business activity.
However, as energy technology, policy and services change rapidly, it’s now an area manufacturers must master to minimise the impact to their bottom line. Ashley Phillips examines the issues.
Energy management technology is by no means new and most businesses will have used some kind of monitoring and targeting software to measure and track consumption.
However, this is not a static environment, and as computing technology develops, so too does the capability of energy management tools.
Manufacturers can now expect to find solutions that provide detailed scenario modelling, tailored to their sites and equipment.
For example, the times at which electricity is consumed makes a big difference to the price paid – peak periods are more expensive.
If businesses can change usage patterns or switch to onsite generation, such as CHP (combined heat and power), then they stand to reduce their costs during peak periods or when the electricity wholesale market is particularly expensive.
The right software can take feeds on wholesale prices as well as detailed cost breakdowns.
By overlaying market information with site data, such as consumption levels and operational restrictions, it’s possible to quickly produce optimised run schedules that really help to drive down costs.
One example is Kodak Alaris, which used our Site Optimisation software to optimise the running of its manufacturing site, reducing electricity costs by 11% as a result.
Get the right support
If manufacturers compete with overseas counterparts, the cost of energy in the UK can have a direct impact on their ability to produce at a competitive price.
In recognition of this, four years ago the government introduced a compensation package for certain ‘electricity intensive industries’ (EIIs), which helps alleviate the burden of some of the newer levies.
The compensation package is due to become an exemption package imminently, helping support cash flow for eligible businesses.
We anticipate a consultation on widening the list of qualifying industries, which may mean that a larger number of businesses can benefit in future.
Energy as a Service
Many manufacturers lack the time and expertise needed to make the most of their energy budgets.
From developing the right procurement strategy to applying for the right demand side response (DSR) scheme or installing carbon-reducing embedded generation, the number of potential options to weave into a good energy strategy is considerable.
Suppliers are starting to provide that extra support, collaborating with businesses to help them reduce consumption, carbon and, ultimately, costs.
Ørsted’s Energy as a Service is designed to do just that. Our specialists work with businesses to determine the optimum energy strategy to suit their business assets and needs.
They go on to execute that strategy on the customer’s behalf, whether it’s providing the up-front investment to install on-site generation or simply running equipment in a more cost-effective way.
For busy manufacturers, keeping up with changes and opportunities in the energy sector – never mind taking advantage of them – can feel like a daunting task.
By working with industry experts to develop an appropriate multi-faceted strategy, manufacturers can expect to reduce energy costs and improve their competitive advantage.
Ashley Phillips, sales & marketing director, Ørsted Sales UK