Understanding the cost benefits of efficiency

Does it really cost too much to be sustainable with industrial/electrical systems?


MYTH: It costs too much to be sustainable. If I invest in producing sustainable/green machines, they will become too expensive to sell.

The constraints of cost reduction, usage of resources, and energy reduction are becoming key demands for manufacturing customers. Additionally, as consumers apply pressure to produce more sustainable products, they are also demanding greater transparency in how the products they buy are produced.

Just because a product is made from sustainable materials does not mean other aspects of its lifecycle are considered sustainable (i.e., material sourcing, production, packaging, and transportation). For manufacturers to market a truly sustainable product, they need machines that operate efficiently and have green lifecycles.

Furthermore, end users have now put a greater focus on developing strategies to reduce their own operational and production costs, and are looking for ways to reduce energy costs at the machine level. Experience shows that simply taking an active approach to energy efficiency can provide additional energy savings without incurring additional costs.

Mechatronic machine designs alone provide up to 60% energy savings, in turn making for more productive machines. In addition to their consumption and sustainability benefits, they also create less waste, enjoy more flexible production, and are more compact machines for end users, including fewer components, optimized power, and a smaller control panel.

A good example of an OEM that has worked to incorporate energy efficiency into its machines is M-Tek. Some of the company’s strategies include:

  • Custom-sizing components and capabilities to meet specific customer needs, allowing significant reductions in both cost and energy footprints
  • Concentrating on building machines with better throughput and OEE (optimal equipment efficiency), in turn enabling machines to achieve a level of energy savings on their own—without increasing costs
  • Counseling customers to look at the total cost of ownership (TCO), allowing them to understand their energy costs year over year, exemplifying that value-added performance makes efficient machines less expensive over time.

MYTH: The purchase price represents the main cost of the machine. There are little to no lifecycle costs to worry about.

Surprisingly, the purchase price of a machine accounts for just 2% to 3% of its cost over the lifetime of the machine. The remainder of the overall cost comes from its energy consumption. Fortunately, smart solutions exist today to make the most of the available energy and minimize this cost. OEMs have a huge opportunity in helping to improve lifecycle costs, as machine engineering is the most critical source of improvement in this area.

An engineer’s goal should be to find the most efficient, economic, and competitive solutions—and motor selection is the result of these choices. Making intelligent choices about efficient motors represents almost 30% energy savings over the entire lifecycle of the machine. Precisely matching a motor to its application can achieve additional savings of 3% to 4%.

OEMs can differentiate themselves at this point in the supply chain by making their machines critically valuable to end users by allowing them to meet sustainability demand. As a cornerstone of sustainability, energy efficiency becomes a key way to significantly market this value to customers.

MYTH: HVAC/R is just a small component of a building’s energy usage. It is the area in which I can focus the least, turning my attention to implementing energy efficiency in other areas.

HVAC/R machines are the heart of energy performance in commercial buildings and facilities. The commercial building sector represents almost 42% of global electricity consumption, with HVAC/R systems represent up to 40% of a buildings energy use. The HVAC/R market is unique in that it requires machines that exceed market demands at the lowest costs possible. OEMs want the shortest start-up times, while customers require the lowest possible electrical consumption, the simplest maintenance, and a good initial functionality/price ratio.

Solutions such as single software solutions reduce complexity, program design, and implementation times. These solutions can offer up to a 50% drop in design and installation time. "Re-commissioning" or even “continuous commissioning" has also become an ongoing requirement for a building's HVAC/R mechanical systems in order to maintain peak energy efficiency throughout the life of the HVAC/R equipment.

The need for energy reduction throughout the entire lifecycle of a building has become an important goal for both end users and OEMs. Due to recent attention around the emissions and energy use of commercial building, there is rising concern over their environmental impact.

For the HVAC OEMs, this goal demands higher efficiency ratings for their equipment and lower initial cost. This means the HVAC/R equipment controller must operate the machine at peak efficiency for both full load and part load, while communicating through the building automation system (BAS) using a variety of protocols. For the end user, it means finding cost-effective and innovative ways to reduce energy consumption.

At the same time, technology has reached the point where the contracting industry is facing increasing demand for technicians well-trained in the latest energy savings technology, which can be provided by OEMs. It's become necessary to "dig deep" into the operation of the HVAC/R equipment itself in order to deliver the best possible energy efficiency, while providing enhanced software features to the HVAC/R technicians and building owners with as much "plug-and-play" application and functionality as possible.

Greg Nelson is vice president OEM and Industry Business for Schneider Electric.

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