How performance management systems improve energy efficiency

The new environmental regulations impose numerous constraints on companies and have significant implications for their financial health. The energy-saving and greenhouse gas emission (GGE) reduction programs proposed by various authorities present major challenges for many organizations. The Kyoto protocol targets a 6% reduction in GGE below 1990 levels by 2012.

08/15/2008


The new environmental regulations impose numerous constraints on companies and have significant implications for their financial health. The energy-saving and greenhouse gas emission (GGE) reduction programs proposed by various authorities present major challenges for many organizations. The Kyoto protocol targets a 6% reduction in GGE below 1990 levels by 2012. In addition, the Canadian government plans to implement a program aiming to reduce GGE by 80% below 1990 levels by 2050.

And that is only the beginning. Energy costs have increased steadily over the past 30 years. According to the U.S. Government's Energy Information Administration (EIA), the bills for oil, natural gas, coal and electricity have increased significantly in recent years.

The electricity bill accounts for 20% to 40% of the total operating costs of aluminium smelters, and an average of 30% in the field of water management. Another example: energy is the number one operating cost in data centers. In fact, almost 2% of the electricity produced in the U.S. is used to power server rooms, some of which consume more electricity than a city with 100,000 inhabitants.

These are excellent reasons to add an “energy cost” line-item to the financial report of companies. But, above all, it is important to implement measures ensuring efficient energy management. This will have a beneficial impact %%MDASSML%% not only on the environment but also on company finances. And these advantages will be recurrent, year after year.

Success at Kodak

Kodak offers an excellent example of the contribution that performance management infrastructures can make to energy efficiency. The company launched a project to reduce energy costs at Kodak Park, its vast manufacturing site in Rochester, NY. The park had two power plants, 150 buildings, more than 1,200 distribution meters and more than 11,000 employees. Energy production was monitored by a disparate group of building automation and control systems.

Kodak's energy initiative aimed to improve demand-side management so as to reduce production costs and optimize generation assets. For its overall production processes, Kodak already used OSIsoft's PI performance management infrastructure, so this tool was also used for the new project. It served to collect, unify, archive and methodically process data as well as disseminate information via a portal.

Key problems were identified: the simultaneous start-up of equipment generating brief periods of high energy demand, inadequate training of operators, lack of cohesion between departments and lack of management of lighting and heating. The initiative established a real-time correlation between energy production and consumption, making it possible to better distribute consumption among units, buildings and sectors.

In the end, one of the two power plants was closed, and, overall, the company saved millions of dollars. The project's return on investment was 24 months.

Of course, the performance management system was not solely responsible for the project's success. But the dissemination of information made it possible to place relevant data at the disposal of all employees. The company's leaders believe this promoted a culture of sound management and energy savings. The increased awareness of every single employee through having a real-time view of the energy cost of operations resulted in changes being made.

Other key factors in the success of any energy management project include the full support and cooperation of senior management; the appointment of a person directly responsible for energy management; the maintenance of good relationships with technology suppliers and a good understanding of the field; value being placed on energy management alongside production and quality; a corporate culture promoting continuous improvement; and the establishment of simple, achievable goals. Overall, visionary companies maintain that an energy management project requires a long-term vision with returns on investment of from two to five years %%MDASSML%% not just a few months, as with most traditional projects.

When its project was launched, Kodak had reached a point where energy management had become crucial. More and more these days, it is a vital factor with a direct impact on the financial health %%MDASSML%% and even survival %%MDASSML%% of companies. This is why it is imperative to plan energy management and collect and analyze vast quantities of data needed to ensure its success. From this perspective, an efficient performance management system is an essential tool.


Author Information

Martin Jette is general manager of OSIsoft Canada.




No comments
The Top Plant program honors outstanding manufacturing facilities in North America. View the 2015 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...
2016 Engineering Leaders Under 40; Future vision: Where is manufacturing headed?; Electrical distribution, redefined
Strategic outsourcing delivers efficiency; Sleeve bearing clearance; Causes of water hammer; Improve air quality; Maintenance safety; GAMS preview
World-class maintenance: The three keys to success - Deploy people, process and technology; 2016 Lubrication Guide; Why hydraulic systems get hot
Flexible offshore fire protection; Big Data's impact on operations; Bridging the skills gap; Identifying security risks
The digital oilfield: Utilizing Big Data can yield big savings; Virtualization a real solution; Tracking SIS performance
Getting to the bottom of subsea repairs: Older pipelines need more attention, and operators need a repair strategy; OTC preview; Offshore production difficult - and crucial
Applying network redundancy; Overcoming loop tuning challenges; PID control and networks
Driving motor efficiency; Preventing arc flash in mission critical facilities; Integrating alternative power and existing electrical systems
Package boilers; Natural gas infrared heating; Thermal treasure; Standby generation; Natural gas supports green efforts

Annual Salary Survey

Before the calendar turned, 2016 already had the makings of a pivotal year for manufacturing, and for the world.

There were the big events for the year, including the United States as Partner Country at Hannover Messe in April and the 2016 International Manufacturing Technology Show in Chicago in September. There's also the matter of the U.S. presidential elections in November, which promise to shape policy in manufacturing for years to come.

But the year started with global economic turmoil, as a slowdown in Chinese manufacturing triggered a worldwide stock hiccup that sent values plummeting. The continued plunge in world oil prices has resulted in a slowdown in exploration and, by extension, the manufacture of exploration equipment.

Read more: 2015 Salary Survey

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.
This article collection contains several articles on the vital role that compressed air plays in manufacturing plants.
This article collection contains several articles on the Industrial Internet of Things (IIoT) and how it is transforming manufacturing.
This article collection contains several articles on strategic maintenance and understanding all the parts of your plant.
click me