Reducing energy consumption is a double win – both for the bottom line and the sustainability agenda. Dan Hulme, a manufacturing consultant, offers industrial businesses strategies for taking control of their energy bill.
A move to smarter and more flexible energy procurement offers significant savings for many manufacturers, but this alone only addresses the unit rate of energy.
The cost of energy is a function of the unit rate multiplied by the total consumption, and it is consumption that drives the environmental sustainability agenda and is the significant element of the cost equation over which you have the greatest control.
The first step towards addressing consumption, and in particular wasted energy, is to establish a better top-down understanding of how your organisation consumes energy.
A range of sub-meters, tracking tools and software modelling will allow you to build up a comprehensive picture of consumption across facilities, production lines and even down to individual products.
This also helps to improve your activity-based costing, an important business imperative.
Commitment, planning, action and reporting of the results should be at the heart of energy-intensive sectors like manufacturing. However, the same approach can be applied to smaller users.
Many businesses choose to comply with the Environmental Management System, ISO 14001. This includes many of the elements of the above approach, but also extends the scope to cover other aspects of sustainability.
Better acquisition, analysis and management of energy data allows opportunities for reduction in consumption, but also ensures evidence for the impact of any measures that have been implemented.
This article first appeared in the November issue of The Manufacturer magazine. Click here to subscribe
Once an overview of areas of consumption has been secured, the data it presents can be used to help inform, select, refine and monitor a range of energy-efficiency measures in conjunction with a site visit.
Changes in staff behaviour and processes, as well as equipment improvements may all offer substantial savings.
Without this fundamental understanding and measurement of the energy you are already consuming, selecting the measures to provide the biggest impact on your business can be reduced to little more than guesswork and the performance cannot be tracked.
Properly implemented, these solutions deliver physical savings to reduce energy intensity, improve sustainability and mitigate the impact of price rises as well as ensuring maximum return on investment from energy technologies.
Manufacturers have serious concerns over continued pressure from:
- The rising price of raw materials and energy
- Increased competition and ongoing uncertainty surrounding Brexit
- Maintaining or improving productivity and competitiveness
- Client pressure to improve and demonstrate environmental sustainability
To meet and overcome these headwinds, business strategies must include understanding sophisticated energy charging methodologies – there are a multitude of taxes and levies applied, particularly for electricity, and many of these are variable, depending on the time and season.
However, many manufacturers do not have the luxury of a dedicated energy manager, so it is important that businesses engage with their energy advisors to develop appropriate short, medium and long-term strategies for managing the total cost of energy and their environmental sustainability.
Furthermore, energy use is a key source of emissions to air for manufacturers, so reducing waste will also help businesses to meet sustainability targets and, in some cases, to meet obligations from schemes such as Climate Change Agreements.
To find out more about how Inenco can support your business imperatives to reduce energy intensity, and improve sustainability, contact us on: 08451 46 36 26