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Energy management practices: A new approach to save energy

22/04/2015

Apart from improving energy efficiency through investment in more efficient equipment and processes, there is also significant potential to achieve energy savings by improving energy management practices.

Apart from improving energy efficiency through investment in more efficient equipment and processes, there is also significant potential to achieve energy savings by improving energy management practices. Some of these improvements may be straightforward.

“The guy comes at six o’clock in the morning, switches everything on, and then switches everything off at six o’clock in the evening,” says Dr Bowden of Scottish Leather Group. “But the equipment may not have done a thing all day,” he says. “And it really is as simple as that. You can have the most energy efficient plant on the planet, but if you don’t need to run it, don’t.”

Although there has been no growth in the proportion of companies investing in plant and equipment to improve efficiency, there appears to be growth in the proportion focusing on improving their energy management practices.

 

For a start, more and more companies are making managers responsible for energy efficiency. Executives are more likely now than two years ago to say that responsibility rests with individual lineof-business managers or business-unit heads (25 percent, versus 19 percent in 2011) and with an energy efficiency or environmental health and safety manager (24 percent, versus 20 percent previously).

For a case in point, look no further than CLP India: “The CEO has set up a team to look at sustainability and energy efficiency,” comments Mr Dexter. “So there is now a central organization at the corporate level to look at these things.”

The fact that companies are delegating formal responsibility for energy efficiency is significant because line-of-business managers or business-unit heads may be more likely than CEOs to squeeze the most out of equipment and processes for manufacturing.

S G Choudhary, chief technology and sustainability officer at Tata Chemicals in India, explains that the firm has a target to improve energy efficiency by between 1 percent and 2 percent every year,

and that responsibility for achieving that target rests with line management. “We take a view that the best people to improve efficiency are the line managers,” Mr Choudhary says, “as they are the ones who are dealing with the equipment and processes on a daily basis.”

Formal delegation of responsibility for energy efficiency is also important because a stronger focus at the operating level allows firms to identify more potential savings. Research by the American Council for an Energy-Efficient Economy (ACEEE), a think-tank in Washington, indicates that “identified opportunities for industrial energy efficiency remained largely the same order of magnitude over the period from 1980 to 2000 in spite of significant realized energy savings in the sector.” Consider SCA: “We thought we would take the ‘low-hanging fruit’ and then run out of opportunities,” recalls Mr Becherer. “But the deeper you look into it, the more potential you find.”

A focus on energy management systems

Many companies included in this research are adhering to energy planning and management guidelines set out by the Energy Star program, a US-government backed energy efficiency program, or by the ISO 50001 energy management standard. At US manufacturing conglomerate 3M, the group’s global manager of corporate energy, Steve Schultz, says: “We’re working to exceed our publicly stated goal to improve energy efficiency by 25 percent over a 10 year period that ends in 2015. A large part of achieving that is behavior-based activities, which center on the guidelines for energy management that the Energy Star program and the ISO 50001 guidelines give us.”

Indeed, more industrial enterprises now have a company-wide energy management system in place to track and optimize energy use than was the case two years ago, according to survey results.

Fully two-thirds (67 percent) of respondents say they have such a company-wide system in place—up strongly from 50 percent in 2011. Mr Schuchard of BSR remarks that tools are becoming available to help companies take control of energy efficiency: “We are seeing better technology for energy efficiency management—software and apps—so it’s becoming easier to manage,” he says.

Reporting progress

Despite firms’ progress in their approach to energy management, just 36 percent say they have conducted an energy audit across the entire group within the past three years—not much of an improvement on the 34 percent reported in 2011. One reason may be that audits can be costly, especially in remote areas where local resources may be lacking, as is the case in some parts of China. “Firms there are often growing, and the opportunity cost of paying attention to a comprehensive audit is too high,” says Mr Schuchard.

Furthermore, not all executives find company-wide audits useful. “Energy audits tend to produce high-level information that is hard to convert into practical projects and actions,” says Ricardo Mendes, energy director at Brazilian mining company Vale. “Instead, we conduct engineering analyses of systems with the greatest potential for energy efficiency. These analyses produce more indepth results, with more potential for conversion into effectively implemented projects.”

In that vein, growing numbers of firms are regularly reporting their progress on improving energy efficiency at either plant level, business unit level, or group level. Sixty-two percent of executives say their firms report progress regularly—a significant rise over the 48 percent level reported two years ago. At 3M, Mr Schultz sends the CEO a quarterly report showing progress towards energy goals at group, business unit and plant level. Many companies, Scottish Leather Group among them, are also publishing their energy performance results in shareholder reports and other external publications.

Anh Tuan

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