Making the case for energy management technology

Don’t let misperceptions get in the way of substantial payoffs. Get over the three primary barriers to full-scale use of energy management technologies.


A clear view: Demand management dashboards provide a new way of looking at energy consumption. Users can analyze demand by debit periods based on utility rate schedules and drill down into each period for details. In this tab, users track demand over timeIt’s no secret that energy accounts for a large percentage of most manufacturers’ operating costs. In the U.S. alone, manufacturers spend $20 billion on energy every year, according to the U.S. Department of Energy.

With those kinds of dollars being burned on a regular basis, you would think manufacturers would be scrambling to find ways to curb energy costs. And, in fact, many are.

A recent Navigant Research study indicates manufacturers’ desire to reduce their energy bills is fueling a boom in the market for technology that addresses that problem. Based on its research, Navigant expects the global market for industrial energy management solutions to almost double by the end of this decade, going from $11.3 billion in 2013 to $22.4 billion in 2020.

As impressive as those numbers are, some industry analysts contend they should be even larger, given the positive impact that industrial energy management technology has proven to have on corporate bottom lines. Just consider the track record of demand-management technology—software that helps manufacturers take a holistic approach to energy management and avoid the pricing penalties associated with using large amounts of energy when there’s heavy demand on the power grid.

Industrial companies that adopt these solutions consistently reduce peak demand charges anywhere from 10% to 30%. That translates to a reduction in utility bills of 5% to 10% or more, depending on the size of the facility and its specific demand charges. 

Operational improvements

Energy use by process: These two pie charts show the loads and processes that contributed to the demand level—and therefore the peak demand charges—shown in the dashboard graph. The pie chart at right shows which loads were curtailed to avoid an even highEmploying demand management technology also gives plant managers quick, easy access to information that can help them uncover—and rectify—production inefficiencies related to both poor equipment performance and independently run processes. By evaluating equipment and coordinating processes it’s possible to reduce energy costs without overhauling operations.

Given these obvious benefits, why aren’t all manufacturers rushing to adopt industrial energy management technology? After years of working and talking with hundreds of managers and executives in industrial businesses, I have noticed three primary barriers to full-scale adoption of energy management technology:

  • Fear of disruption
  • Doubts about the business case
  • System integration concerns.

These barriers can hinder adoption of demand management technology; some technologies are discussed here; suppliers of other types of energy management solutions likely encounter similar obstacles.

1. Fear of disruption

Let’s start with fear of disruption. Optimal demand control—preventing demand spikes, eliminating inefficiencies, and shifting power demand to the lowest-rate periods—is one of the key strategies enabled by demand management automation. But there’s probably no bigger barrier to adoption than the fear that this process will reduce production output or compromise product quality.

In reality, a sophisticated demand management system can optimize loads more safely and effectively than manual intervention. (See the Mission Produce case study for an example of successful enterprise-wide demand management.)

The ideal demand management solution will employ user-defined rules to prevent any actions that compromise critical processes. That allows for controlling and prioritizing loads in ways that are tailored to the production needs of specific plants. Users can then develop strategies that result in an overall reduction in energy costs—even across an entire enterprise—without sacrificing productivity. 

2. Doubts about the business case

Mission Produce, an avocado grower, expects to use hard energy use data to drive funding for future energy saving projects. Courtesy: Powerit SolutionsDemand management automation delivers its returns by controlling energy use so precisely that users may not even notice it. That’s an advantage—but it creates skepticism upfront that the returns will be realized. In addition, businesses that have already completed energy efficiency upgrades find it hard to believe that there are more savings to be wrung (painlessly) from their processes.

It’s important to do a detailed analysis of your facility’s energy use. Your automation vendor may be able to analyze data from your facility to simulate demand control actions and results and determine potential demand management savings.

As Jake Nixon, director of operations for Mission Produce, points out, attaching dollar to figures to demand management scenarios is persuasive. “You know the old saying—what gets measured gets done,” Nixon says. “If I can say, ‘If we ran this load at 4 p.m. rather than 8 a.m., it would save us $5,000,’ that’s the power to justify change.” 

3. System integration concerns

It’s common for operations professionals to assume that demand management technology won’t fit smoothly into their existing controls environment, leaving them large amounts of stranded costs in previous automation investments. That’s simply not true.

Compatibility with existing infrastructure is always a key factor in choosing new technology, and demand management vendors have taken that into consideration. It’s possible to find demand management solutions that integrate with virtually any existing controls environment. In fact, a smart demand management system will extend the usefulness of legacy systems and maximize equipment lifetime through more efficient operations and lower overall maintenance costs.

The reasons manufacturers typically cite for not adopting energy management technology are largely perceptual. If you need to break down these barriers in your company, get hard data for your facilities. It could open a clear path to energy cost savings and more efficient operations.

- Patty Solberg is director of product marketing at Powerit Solutions, a Seattle-based international technology company that focuses on advanced energy demand management; edited by Sidney Hill, Jr., contributing content specialist, CFE Media. Send IEM comments to controleng(at)

ONLINE extra

See other Industrial Energy Management articles for February linked at the bottom.

Also see related case study: Producing energy savings on demand linked at the bottom of this posting. 

Key concepts

  • Misperceptions about energy management can get in the way of large savings.
  • Adoption hesitations include fear of disruption, doubts about the business case, and system integration concerns.
  • Getting hard data for your facilities can clear a path to energy cost savings and more efficient operations. 

Consider this

  • How can energy management measurements prioritize your demand management savings?

No comments
The Top Plant program honors outstanding manufacturing facilities in North America. View the 2013 Top Plant.
The Product of the Year program recognizes products newly released in the manufacturing industries.
The Engineering Leaders Under 40 program identifies and gives recognition to young engineers who...
The true cost of lubrication: Three keys to consider when evaluating oils; Plant Engineering Lubrication Guide; 11 ways to protect bearing assets; Is lubrication part of your KPIs?
Contract maintenance: 5 ways to keep things humming while keeping an eye on costs; Pneumatic systems; Energy monitoring; The sixth 'S' is safety
Transport your data: Supply chain information critical to operational excellence; High-voltage faults; Portable cooling; Safety automation isn't automatic
Case Study Database

Case Study Database

Get more exposure for your case study by uploading it to the Plant Engineering case study database, where end-users can identify relevant solutions and explore what the experts are doing to effectively implement a variety of technology and productivity related projects.

These case studies provide examples of how knowledgeable solution providers have used technology, processes and people to create effective and successful implementations in real-world situations. Case studies can be completed by filling out a simple online form where you can outline the project title, abstract, and full story in 1500 words or less; upload photos, videos and a logo.

Click here to visit the Case Study Database and upload your case study.

Maintaining low data center PUE; Using eco mode in UPS systems; Commissioning electrical and power systems; Exploring dc power distribution alternatives
Synchronizing industrial Ethernet networks; Selecting protocol conversion gateways; Integrating HMIs with PLCs and PACs
Why manufacturers need to see energy in a different light: Current approaches to energy management yield quick savings, but leave plant managers searching for ways of improving on those early gains.

Annual Salary Survey

Participate in the 2013 Salary Survey

In a year when manufacturing continued to lead the economic rebound, it makes sense that plant manager bonuses rebounded. Plant Engineering’s annual Salary Survey shows both wages and bonuses rose in 2012 after a retreat the year before.

Average salary across all job titles for plant floor management rose 3.5% to $95,446, and bonus compensation jumped to $15,162, a 4.2% increase from the 2010 level and double the 2011 total, which showed a sharp drop in bonus.

2012 Salary Survey Analysis

2012 Salary Survey Results

Maintenance and reliability tips and best practices from the maintenance and reliability coaches at Allied Reliability Group.
The One Voice for Manufacturing blog reports on federal public policy issues impacting the manufacturing sector. One Voice is a joint effort by the National Tooling and Machining...
The Society for Maintenance and Reliability Professionals an organization devoted...
Join this ongoing discussion of machine guarding topics, including solutions assessments, regulatory compliance, gap analysis...
IMS Research, recently acquired by IHS Inc., is a leading independent supplier of market research and consultancy to the global electronics industry.
Maintenance is not optional in manufacturing. It’s a profit center, driving productivity and uptime while reducing overall repair costs.
The Lachance on CMMS blog is about current maintenance topics. Blogger Paul Lachance is president and chief technology officer for Smartware Group.