Attacking energy costs
Automated control solutions offer the best approach for sustained savings from energy-management programs.
There are all sorts of altruistic reasons for corporations to be conscientious about conserving energy. It helps preserve what we now know are finite resources such as water, oil, and natural gas. It also reduces pollution, and thus improves the quality of life for everyone inhabiting the earth now, as well as those who will occupy it in the future.
While these are, indeed, noble goals, the reality is that it’s difficult for corporations to justify energy conservation programs on altruism alone. To become a permanent part of corporate strategy, an energy conservation plan—like most things in the business world—must have a positive impact on the bottom line.
For manufacturers, the good news is that it should be fairly easy to show a real payback from energy management programs.
Various energy industry analysts estimate that industrial companies account for anywhere from 30% to 50% of all energy consumption in the United States. Even if the exact figure is open to debate, it’s easy to see that manufacturing plants—and the office buildings that support them—slurp up large amounts of energy, generating hefty utility bills in the process.
The sheer volume of energy that plants consume means there are simple, often cost-free steps that manufacturers can take to attack energy costs and produce substantial savings in the short term. To realize longer term—and longer-lasting—cost reductions, manufacturers can turn to one or more of the rapidly growing number of technology vendors offering solutions that automate energy-management processes.
Navigant Research, a Boulder, Colo.-based energy-market research and consulting firm, estimated that industrial companies spent $960 million on energy-management software and services in 2011. It also projects that such spending will show a 21% compound annual growth rate through 2020, when the total yearly spend will exceed $5.5 billion.
Those figures account only for the purchase, installation and management of software systems that track and analyze energy usage within industrial facilities. They don’t include the purchase of hardware devices such as smart meters and equipment sensors that help regulate energy use. Such devices must be employed as part of any comprehensive industrial energy-management program, and they currently represent a booming market in their own right.
Bob Gates has a unique perspective on what manufacturers need to do—and the solutions that are available to them—to attack high energy costs. He spent three decades working as a controls engineer and plant manager before going to work for GE Intelligent Platforms, where he now is global marketing manager for the manufacturing sector.
“Almost anything you do to address energy conservation within a plant is going to have a pretty good return on investment,” Gates declares. “In most cases, the payback will come in 14 months or less.” The real challenge, Gates argues, is being able to sustain, and improve upon, those savings after that initial payback period.
For most manufacturers, Gates says, energy management starts with relatively obvious strategies like installing more energy-efficient light bulbs, caulking doors, and beefing up insulation around the plant. These efforts typically are accompanied by awareness campaigns to get workers thinking about small things they can do to reduce energy use, such as turning off lights or shutting down computers and other equipment when they leave their work areas for extended periods. Some companies even offer employees financial incentives to curb energy use, but there are inherent limits on the effectiveness of such strategies.
“Invariably, no matter how much signage you put up, or how many incentive and reward programs you run, these efforts don’t sustain themselves over the long term,” Gates says. “The savings start to dissipate, or even disappear, when plant managers stop paying as close attention.”
The solution to this dilemma, in Gates’ view, is industrial automation and control systems with specific energy-management features. “When they are installed properly, control systems can sustain energy savings over time,” Gates says, “because they don’t leave and they don’t forget why they were put in place.”
Gates relates the story of a manufacturing start-up that GE worked with to illustrate the impact control systems can have on energy costs. The company runs a packaging operation on a conveyor system that’s roughly three quarters of a mile long. GE advised the company to place sensors along the line to make sure that machines are on only when they are needed to complete an operation, a simple step that saved the company $1 million a year in energy costs.
“We simply adopted a strategy of not relying on people to walk the line checking on equipment,” Gates relates. “In essence, we programmed the machines to look for boxes passing by. If a machine doesn’t see a box that needs something added to it, the control system does its job by putting the machine in idle mode; if no boxes show up for an extended period of time, the control system executes a complete shutdown.”
Gates says idling equipment easily accounts for 10 percent of unnecessary energy costs in the average industrial plant, so it’s an area he recommends plant managers examine closely. Energy waste can be especially expensive when it comes from large pieces of equipment such as air compressors, furnaces, and boilers.
“It sounds like a simple thing to just walk an air compressor line and check for leaks,” Gates says, “but in some large facilities we’re talking 20 to 30 miles of air pipe. You really can’t walk that line.”
Once again, he states, an automated control system can solve the problem. “If you have a scheduling system monitoring your line, you can set alarms to go off when it’s putting out more air than it should at a given time. The system also can shut down the compressors when no production is scheduled.”
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Annual 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.