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Don't Waste Your Wages

Don't Waste Your Wages

By Mary Burgoon, Market Development Manager, Sustainable Production, Power Generation and Energy Management, Rockwell Automation

Don’t get stuck in the cost-draining trap of passive energy usage. Learn how to measure and manage WAGES resources strategically, including what type of data to collect and how to make energy-effi cient production decisions.

Amid an environment of rising energy costs and volatile energy markets, it’s difficult to find a company that’s unaware of energy use in its facilities. Water, air, gas, electric and steam (WAGES) resources consume an increasingly growing share of operating costs. Extracting, producing or making anything — from household products and chemicals to machinery and raw materials — demands significant energy resources.

Despite high awareness of energy consumption and its costs, many manufacturing executives continue to view energy as little more than a cost of doing business. They fail to consider the multiple activities — such as surges of equipment during sudden starts, poorly maintained equipment and inaccurate temperature readings — that can create unproductive energy usage.

However, understanding WAGES consumption and developing a strategy to manage it better can have a meaningful impact on profits. Strategically managing all WAGES resources can bring benefits that include:

  • Improving control of energy usage.
  • Lowering energy costs as a percentage of operating costs.
  • Minimizing the volatile risks of energy supply, pricing, and legislation.

An effective energy management strategy requires marrying a top-down commitment to energy management with a bottom-up approach that allows engineers to optimize operations at the product level.

Global energy consumption has risen by more than 200% since 1965, from 3,767 million metric tonnes of oil equivalent (Mtoe) to 12,002 Mtoe in 2010. From 2000 to 2010, energy consumption increased about 28%, according to a 2011 BP statistical review of World Energy. This trend is poised to continue, with industrial energy consumption growing an estimated 50% from 2008 to 2035, according to the Energy Information Administration’s 2011 International Energy Outlook.

It Starts with Tracking WAGES at the Facility Level

As usage continues to skyrocket, costs likely will follow the same growth curve. This already is starting to play out in manufacturing plants: Sixty-three percent of plants reported increases to utility and energy costs in the past year, according to a 2011 MPI Manufacturing Study. In addition, one-fifth of plants experienced energy cost increases of more than 10%.

To control costs, many organizations have started tracking WAGES usage at the facility or site level. This allows them to determine a facility’s energy demand and environmental impact over time, and to figure out how demand varies depending on the plant’s activities. Many U.S. government programs — including Energy Star, Save Energy Now and Superior Energy Performance programs — are designed to help manufacturers get started with energy management.

These programs are helpful, but they only scratch the surface when it comes to the level of information and insight manufacturers can attain. Over time, companies can implement systems that collect, time-stamp and store live data related to all WAGES resources. Industrial firms can use this detailed historical data to evaluate usage trends (peak usage by hour, day, month) and energy consumption quality, which can lead to a number of insights related to the correlation between peak consumption and usage, and the relationship between quality and productivity.

Visibility into broad energy consumption information is critical for reducing energy usage. Drawing correlations between energy consumption and operations is a good first step for estimating the amount of energy used for individual products or outputs. This simple improvement can drive dramatic changes to production.

Next, Measure Production Energy Use

Energy savings and cost-effectiveness increase as organizations put systems in place to gather and evaluate data generated by their equipment, establish WAGES usage patterns, categorize problems and explore causes. To truly optimize energy usage, manufacturers must extend efforts beyond the facility level and take a more targeted and granular approach that begins with the collection, storage and assessment of production-level energy data. Visibility at this level provides a more meaningful understanding of energy consumption and quality.

The thought of collecting information about every line in a facility can seem daunting. However, by taking a scalable, phased approach, plant leaders can first target the machines and processes with the heaviest and most variable usage. Establish these locations as data-collection points, and implement systems to store and analyze the data they generate. Over time, the facility leaders can find additional efficiencies by tapping into these systems as it adds new lines and equipment.

Monitoring at the production level of detail generates significantly more data than was being produced at the facility level. Reporting dashboards can make it easier for plant managers to pinpoint variable plant-floor energy costs and identify evaluation options for improving profitability.

Data might reveal trends that affect machine design practices as well. For example, if a motor never approaches peak usage, a plant manager might decide that smaller-sized equipment could achieve equal performance while reducing energy usage.

Calculate Product Costs

To understand production-level energy usage, manufacturers also need to know more than how a plant or piece of equipment consumes energy. They need visibility into how energy is consumed relative to each product, and this view requires more detailed data than typically is collected.

Companies commonly calculate energy per unit of product output (monthly, quarterly or annual energy consumption divided by the number of products or batches produced). However, this method really is effective only in repetitive, low-mix production environments with few product changeovers. Even then, it’s only an estimate — it’s not possible to see how energy was consumed, or how it can be minimized, without measuring energy variables such as peak-demand usages.

A more effective approach that gives industrial firms, especially those running a range of products, visibility into the true overall product costs is to capture energy usage per product where it occurs. This level of detail allows active management of energy consumption that improves corporate citizenship and profitability.

For example, California Portland Cement (CPC) has used data-archiving systems to monitor energy performance at its plants since the mid-1990s. CPC monitors power consumption and fuel usage per unit of production at each phase of production, and data is examined at a corporate level in quarterly cost review meetings.

By 2006, the company had received numerous local, state and national awards for its energy-reduction efforts, attained more than $3 million in energy-cost savings, and reduced process emissions since its broad based energy-management program was formed.

According to a maintenance industry magazine, in 2007, CPC continued its energy-reduction trend by cutting energy intensity by 2.5% from 2006 levels for a savings of nearly 363 trillion Btu. This savings reduced CO2 emissions by 34,366 metric tons, which is the equivalent of providing electricity to 4,644 American homes, according to a 2008 PCA executive report.

Best Practices

After establishing effective systems for collecting energy-consumption data, the next step is to implement automated decision-making to control production, energy usage and emissions, and then coordinate production decisions with external market factors. For more information on how to increase energy efficiency by controlling production and other energy management best practices, visit www.ab.com/onecontact/services/energy/ and download a copy of the Industrial Energy Management Market Research report from Rockwell Automation. It examines industrial energy usage; assesses the readiness of industrial companies to take action to reduce consumption of WAGES; and presents the Rockwell Automation Industrial GreenPrint™, a four-stage methodology for progressively achieving improvements through existing and new investments.