Insight Report Energy Efficiency


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Insight Report Energy Efficiency

  2. 2. EditorialENERGY EFFICIENCY AND ENERGY MANAGE-MENT IN INDUSTRIAL COMPANIESMany industrial companies are increasingly focusing on energy efficiency as away to be sustainable.This Insight Report addresses this issue and explores a subject which is stillnew ground for many companies.When it comes to energy efficiency, much de-pends on a company’s ability to identify new From disposal to utilisa-approaches. Saving energy is not that difficult if tionplenty of energy is being wasted. This explainsthe scepticism among some experts about com- Just like the waste disposal industry, manypanies purchasing "green" energy. Most indus- companies will also have to reinvent themselvestry representatives consider this to be the with a view to energy efficiency. Although thewrong approach. They claim that it is much physical items to be disposed of have notmore important to stop wasting energy in order changed, they are now referred to as ‘secondaryto boost ones own energy efficiency. raw materials’ in a recycling industry. The dra- matic change in this industry is a good example of how the use of resources is developing in Germany and the EU. The main objective is to generate maximum value from the use of a particular resource, be it a secondary raw mate- rial or energy. Just as with physical waste re- processing, the key question now is how energy can be retained or re-used. This question does not just extend to manufac- turing plants, but also to utility companies, where the first signs of significant energy saving are being seen. Most power stations in Germany and elsewhere operate cooling towers or cooling basins. What people perceive as rising steam is nothing but an enormous cloud of heat energy that is simply blown out into the atmosphere. Those who understand and accept this fact may come up with the idea of converting their own factory into a cooling tower in order to access this vast quantity of energy. Paper mills, for instance, are already adopting this method to feed their energy-intensive processes. Although this is a good energy supply concept, it is just the beginning of the possible value cycle. Another example from the waste disposal sectorIt is not particularly difficult for many companies might serve to explain this approach in moreto increase their energy efficiency. This begins detail. Let us look at the paper industry, whichwhen companies realise that their plants dis- today is intrinsically linked to waste disposal andcharge energy, for example as heat, into the recycling. Since the introduction of recycledenvironment. This is an issue that has been paper, the value chain of this resource has wit-somewhat neglected up to now. We often treat nessed dramatic progress. Whilst the only dis-energy in much the same way as we did domes- tinction made in the early days was betweentic and industrial waste just a few years ago, paper and recycled paper, companies todayconsidering it as nothing but a byproduct to be distinguish between around 15 types of recycleddisposed of. For business as well as environ- paper. Each of these varieties represents a spe-mental reasons change is necessary and will cific grade of this raw material. The originalhappen. resource - wood fibre – now has a spiral-shaped 2 T.A. Cook Consultants Insight Report 02 – 12/2010 | Energy efficiency and energy management in industrial companies
  3. 3. product life cycle. In this cycle, the had major repercussions on com-spiral turns 15 times before the panies efforts to boost efficien-original wood fibre can no long- cy. Now that energy prices areer be used. The end of the picking up again, the energyspiral is marked by ‘thermalutilisation’ – burning - when efficiency issue is once againenergy is recovered from entering centre stage for busi-the residual fibre. Com- ness leaders.pared to this, the use of apower plant’s residual energy One can generally identify sev-in the example mentioned eral elements that can be used toabove represents just two cy- boost corporate energy efficien-cles in a value spiral – the ener- cy. Besides almost trivial things,gy being used once at the powerstation and ‘recycled’ once when the paper mill such as managing the lightinguses its residual steam as an energy source. or heating of business premises, ener-However, here are potentially a much larger gy efficiency extends to the production processnumber of re-uses conceivable. as well as the use of residual energy (energy recovery). Companies active in this field haveEconomic efficiency and already adopted a very proactive view of thesesustainability elements. Companies will now also find it worthwhile to consider the engineering of theirSome companies have taken to heart not only own plants, their production processes and eventhe economic benefits of energy efficiency, but their own products’ construction in light of thealso the role of sustainability. Environmental energy efficiency issue.responsibility and business reputation have animportant role to play in this area. This is why Many energy efficiency measures do not evencompanies are at times exploring projects where require a budget to be implemented and pay offthe return on investment takes five years or from the very first day. The only questions to bemore to materialise. However, energy cost re- answered are: "To what extent are companiesductions remain the driving factor. Not surpris- willing to give priority to energy efficiency?",ingly, there has been a strong correlation be- and "What approaches will they adopt?"tween energy efficiency and the global econom-ic crisis in recent years. Slumping energy pricesCONTENTSEnergy efficiency and energy management in industrial companies ............................................. 2Seven steps to improving energy management at companies ...................................................... 4Energy efficiency regulation tightens ......................................................................................... 516001 – and what comes next? ................................................................................................ 6Internal and external influences in coming years - act vs react .................................................... 7Energy efficiency analysis in practice ......................................................................................... 9 3 T.A. Cook Consultants Insight Report 02 – 12/2010 | Energy efficiency and energy management in industrial companies
  4. 4. Parameters of energy efficiencySeven steps to improving energy management atcompaniesThe discussion about the optimum energy use and the projects that have beenimplemented so far are so different that they show several approaches areavailable when it comes to boosting energy efficiency. The following discussionprovides an overview of the individual steps to energy efficiency and optimisa-tion.Energy efficiency often starts with a companys of measures. The steps towards energyexecutive management. Work on energy efficiency are as follows:efficiency, however, often starts at middlemanagement. Companies usually appoint an I. Identify waste: Where is power used un-energy efficiency officer who often lacks necessarily?detailed knowledge of the subject. The typical II. Avoid a throw-away mentality: How can residual energy be put to good use? III. Load management: How can the compa- ny or its production processes realistically be organised to reduce peaks in energy demand? IV. Production efficiency: How can plants and production lines be operated in the most energy efficient manner? V. Machinery efficiency: Which machinery is the most energy efficient available? VI. Process efficiency: Which production method minimises energy consumption in mak- ing the product? VII. Product efficiency: How can I design my product in an energy-efficient manner? Each of these steps can be considered and ap- plied individually. However, in practice most companies initially consider energy recovery andapproach is to take a simple look at energy preventing energy waste before other steps areefficiency measures available to a company. On taken.the basis of the measures already implementedby active companies, seven steps can beidentified which serve as the basis for a range 4 T.A. Cook Consultants Insight Report 02 – 12/2010 | Energy efficiency and energy management in industrial companies
  5. 5. Legal frameworkEnergy efficiency regulation tightensBesides rising energy prices, legal requirements and regulatory mechanismscan also drive energy efficiency measures. There are several plans to regulateenergy use on a German and EU level.„Political, social and environmental influences the conditions for payment of the incentive inforce you to address the issue of energy man- the US was the purchase of a low-consumptionagement." Dr. Jörg Meyer (Head of the Energy car model. This also offered an enormous& Climate Protection Unit, Siemens AG) competitive advantage for companies which had embarked on efficient models at an early stage. This statement suggests that, in addition to This shows that energy management can besocial influences and environmental aspects, considered as a competitive advantage.political conditions will also become increasinglydemanding. Apart from DIN EN 16001 and ISO "Energy management saves time so that50001 standards (the subject matter of a companies are able to act rather than merelyseparate article in this Insight Report), the first react," notes Dr. Jörg Meyer.far-reaching interventions have already beenmade in one of industry’s sovereign areas: It seldom makes sense to lag behind official Dr. Jörg Meyer, Head of the Energy & Climate Protection Unit, Siemens AGproduct design. A widely known example is the rules. The current reluctance to implement thegradual implementation of the ban on energy- EUs energy goals suggests that regulations willinefficient light bulbs. With this regulatory become even more restrictive. Therefore anintervention the issue of product efficiency, long active energy strategy can only beneglected by many companies, is increasingly advantageous.significant.Pressure on other industries is also growing.The automotive industry has already committeditself to greater transparency in its energyconsumption. Pressure from the consumer endhas also increased significantly in recent years.This step seems to be long overdue consideringthat an energy consumption limit has been inuse for several years in the electronics industry.In the automotive industry’s case it was in factthe US which pioneered regulation, where the"cash for clunkers programme" proved to be atrailblazing concept. Unlike in Germany, one of 5 T.A. Cook Consultants Insight Report 02 – 12/2010 | Energy efficiency and energy management in industrial companies
  6. 6. Legal framework16001 – and what comes next?No - this is not an outlook to the year 16001. Instead, it refers to the imple-mentation of the DIN EN 16001 standard for energy-intensive companies. Itshould not be long before this standard is implemented because it is currentlytriggering many questions for businesses. One particularly important questionconcerns the features of an energy management system that is certified ac-cording to DIN EN 16001."16001 merely sets the system certified. It can bebasic parameters. It is left achieved either through ato the companies them- functioning environmentalselves to decide how to management system that isimplement these parame- certified according to ISOters. A car maker will ap- 14001 or through an eco-proach this issue differently management and auditfrom, say, a fan manufac- scheme (EMAS). The thirdturer." Sylvia Wahren option is the provision of proof(Fraunhofer Institute for in another suitable form. ThisManufacturing Engineering is contingent upon appropriateand Automation, TEEM) data capture as well as evalua- tion of the savings potentialThis statement summarises according to ecological andthe underlying idea of this economic criteria. Since 1 Julystandard. 2009 marked the 2009, the DIN EN 16001beginning for energy- standard has been offeringintensive companies. Since companies the ability to certifythen, they have been able their own environmental man-to benefit from a compen- agement systems. The stand-sation rule via the Renewa- ard sets out the framework forble Energies Act. The legis- such a system. Furthermore,lator has made this benefit DIN EN 16001 is also a goodcontingent upon the intro- basis for companies when itduction of an EnMS (energy Sylvia Wahren, Fraunhofer Institute for Manu- comes to obtaining futuremanagement system). facturing Engineering and Automation, TEEM certification according to theCompanies consider this international requirements ofaspect to be the most diffi- ISO 50001.cult issue because such asystem must be certified. Although regulators haveReaders interested in more granted relatively ample lee-detailed information in this respect are well way, there is still a high degree of uncertaintyadvised to take a first look at the guide for among companies who do not yet know whatcompanies and organisations published by the features an energy management system mustGerman Federal Environmental Agency (DIN EN have in order to qualify for additional DIN EN16001: "Energiemanagementsysteme in der 16001 certification as an environmental man-Praxis"; source: agement system. In addition, there are only aMany questions are answered there. few systems available that can be implemented "out of the box" and already include certifica-The Renewable Energies Act offers three differ- tion.ent ways of having an energy management 6 T.A. Cook Consultants Insight Report 02 – 12/2010 | Energy efficiency and energy management in industrial companies
  7. 7. Influence parameterInternal and external influences in coming years- act vs reactCorporate energy efficiency and energy management are subject to a host ofinfluences. Besides energy costs as the most important influence, further ex-ternal and internal forces influence the development of this issue.Experts agree on one point: There will be strong impact on the development of corporate energydemand for energy efficiency measures in the efficiency. Other influences include an increas-years to come. ing scarcity of raw materials, new production methods, more efficient processes and the costMany companies already regard energy of as a competitive advantage. Thisnot only applies to competition between the All companies are equally exposed to theseindividual players on the market; energy factors, no matter whether or not a company has an energy management system. The question is not so much whether a company will address the energy issue but when this will happen. A company’s strategy might be active or reactive to circumstance; either strategy can be right or wrong. Simply put, an active strategy is, for instance, chiefly suitable for energy- intensive companies and not for companies where energy is a relatively minor cost item. The latter can afford to merely respond to regulatory intervention and hence to limit their action to what is absolutely necessary in this respect. The pressure to- wards efficiency puts an additional burden on small energy consumers whilst energy-intensiveefficiency also has a companies can use it as a new way to play anrole to play when it comes to competition active role in the market. The pioneers will inev-between geographic areas. Energy efficiency itably force the field to follow suit.can also prevent sites from losing theircompetitiveness to competitors in low-wagecountries. The competition factor consequentlyinfluences a companys energy managementstrategy not just through internal,entrepreneurial interests, but also throughexternal influences.It goes without saying that the legal conditionsmentioned earlier also constitute an importantexternal factor. Just like energy prices and com-petition, the legal framework also has a positive 7 T.A. Cook Consultants Insight Report 02 – 12/2010 | Energy efficiency and energy management in industrial companies
  8. 8. On DemandTechnical papers available on demandMore detailed technical papers on corporate energy efficiency and energy managementare now available on demand. Selected technical papers presented by leading companies at our technical conference on "In- dustrial Energy Efficiency and Energy Management", 27 to 28 October 2010, were rec- orded live. Did your schedule prevent you from attending our event, or do you want to revisit selected talks? With our "On-demand special", we give you the opportunity. Make use of this opportunity, and you will also receive the digital conference material (on CD) in addition to your personal access to the recorded talks. Under the following link you can examine the record- ing quality and view short clips from some papers. 8 T.A. Cook Consultants Insight Report 02 – 12/2010 | Energy efficiency and energy management in industrial companies
  9. 9. Energy efficiency analysisEnergy efficiency analysis in practiceBefore implementing an energy management system, a company should firstperform an efficiency analysis. WKW Automotive and Amcor Flexibles Singenare good examples of successful implementation projects. WKW Automotive (aluminium processing) and Furthermore, an efficiency analysis can alsoAmcor Flexibles Singen (manufacturer of help to identify incorrect energy bills.primary packaging) are demonstrating how anefficiency analysis can be successfully carriedout. In WKWs case, a successfulimplementation enabled a return on investmentfor the entire project ineight months. Carefulperformance of ananalysis can be thefoundation for a quickreturn on investment.Different approaches canbe taken for an analysis.Many companies, forinstance, rely on theirown, company-specificsolutions. Othercompanies, such asAmcor Flexibles Singen,rely on standardmethods, such as Six Ulrich Leutgeb, WKW AutomotiveSigma in order to analysetheir energy demand. Asound database is vital ineither case. Companiesfirst need to identify theirenergy consumption from different sources and How can an analysis causeintegrate these into an energy datamanagement system. Every significant energy changes in load distribu-load should be fitted with a dedicated metering tion?unit; measurements at fifteen minute intervalstend to work well for tracking load curves. Many WKW learnt from its efficiency analysis that thecompanies need to invest in an IT infrastructure energy consumption of a plant or line iscomposed of meters and data capture points. dependent not just upon the load (i.e., the plantThis may well mean a five-digit investment. But or line), but also upon the product that issuch an investment can pay off even if no currently being manufactured. WKW Automotiveenergy is saved at all. quotes two practical examples:In the case of WKW, for instance, an analysisenabled a better distribution of the companys Curing ovensenergy load curve so that peak load demandcould be reduced. If a company manages to "Certain products need more energy than othersreduce its peak load by one MW through in the oven. Once we understood this,changing its load distribution pattern, this production of energy-intensive products can begenerates savings of around €7,000 per month shifted to the night shift when energy is cheaperwithout a reduction in energy consumption. This and the load curve low. However, the humanpeak load reduction also generates a certain factor is important here. It would be no use if allmeasure of sustainability. The price of energy in the ovens entered the heating-up phaseGermany could be significantly reduced if simultaneously. Needless to say, they have tocompanies managed to handle their peak loads start in succession” Ulrich Leutgeb (WKWbetter, as utilities’ activities to balance peak Automotive)loads are a particularly significant cost factor. 9 T.A. Cook Consultants Insight Report 02 – 12/2010 | Energy efficiency and energy management in industrial companies
  10. 10. Extrusion presses delivering to customers is what matters. The onus does not have to be left entirely"Certain alloys require more power inthe press. These alloys werepreviously often produced during theday. Without an energy managementsystem, this consumption would nothave been visible” Ulrich Leutgeb(WKW Automotive)These two examples show to whatextent an efficiency analysis canaffect operational structures and thepossibilities which this opens up forcompanies. With such an analysis,WKW Automotive managed tooptimise its own production withoutchanging the product or deliverytimes. At Amcor Flexibles Singen, ananalysis formed the basis for Peter Ritter, Amcor Flexibles Singenredesigning and optimising thefactorys entire lighting system. to production. As soon as consumption isThe benefits at a glance transparent, they will develop their own ideas and identify their savings potential."Apart from the above-mentioned benefits of an Ulrich Leutgeb (WKW Automotive)analysis, further advantages include:  "You do not always need direct KPIs for Six Sigma. You may also use somewhat less The introduction of the energy exact KPIs as long as there is enough management system leads to a clearly potential because you can achieve a lot in reduced load curve. The peak load can be this way.” Peter Ritter (Amcor Flexibles reduced by more than 10%. Singen) The measures described enable a significant  “Quick wins are possible even without Six reduction in the price per kWh. Sigma.” Peter Ritter (Amcor Flexibles The results generated can also be used Singen) when it comes to investing in new assets. Demonstrable and transparent reductions in For further practical examples, please refer to overall energy consumption can be the Xing discussion forum on "Efficient Energy achieved in certain areas. Management at Companies and Administrations".Expert advicePractitioners offer several tips and suggestionsfor implementing a corporate energy analysis.Some of these are shown below: “You need several people who really support and promote the whole thing!” Ulrich Leutgeb (WKW Automotive) "Its no use telling production what they have to achieve. The only function of management accounting is to create and communicate transparency. Production itself must decide what makes sense and what doesnt. At the end of the day, 10 T.A. Cook Consultants Insight Report 02 – 12/2010 | Energy efficiency and energy management in industrial companies
  11. 11. T.A. Cook Research & StudiesBeside the Insight Report T.A. Cook Research & Studies offers studies in the area of AssetPerformance Management.Current studies: Technical Services for Turnarounds in Petrochemical Plants in Germany, Austria & Switzerland (540 pages, 4400€) How companies use RFID in maintenance (190 Pages, 1500€) Offshore Wind Farm Operations & Maintenance (177 Pages, 2900€) Technical services for Turnarounds in petrochemical plants Western Europe (5900€) TAR Scheduling | Scheduling Practices for Turnarounds (1700€)Exclusive studies and surveys as the basis for your decisionsClients with specific questions related to topical issues or competitors may be best served by a single-client study.With these studies, T.A. Cook Research & Studies offers you the opportunity to specify content and scope tailoredto meet your companys particular needs. Our team will be glad to put together a non-binding quotation for youbased on a pre-defined scope. T.A. Cook Research & Studies Leipziger Platz 2 | 10117 Berlin | Phone +49 (0)30 88 43 07-0 | Fax +49 (0)30 88 43 07-30 E-Mail: The Research & Studies division conducts detailed market and company analyses in the area of Asset Performance Management. The focus of the team is to systematically investigate and clarify current mar- ket concerns and requirements as well as anticipated developments and their consequences for market players. As well as studies on topical issues, we compile trend reports and continually expand our data- base of specialised knowledge, which can be applied to each study as needed. 11 T.A. Cook Consultants Insight Report 02 – 12/2010 | Energy efficiency and energy management in industrial companies
  12. 12. Author: Mateus Siwek Mateus Siwek, Studies Project Manager at T.A. Contact Cook & Partner Consultants GmbH, is responsible E-Mail: for the preparation of market studies and anal- Phone: +49 (0)30 88 43 07-0 yses in the field of asset performance manage- ment. Before that, he worked in the utility unit of a market research company and has co-authored several studies.Insight Report is a service of T.A. CookIf you have questions or suggestions about this or future Insight Reports we look forward to your call or mail:T.A. Cook Consultants | Leipziger Platz 2 | 10117 Berlin | Tel.: (030) 88 43 07-0 | Mail: service@tacook.comT.A. Cook is a management consulting firm focusing on Asset Performance Management with offices in Berlin, Birmingham, Houston,London, Raleigh und Rio de Janeiro. The core competence of the consulting business is the sustainable implementation of asset, opera-tions and service-oriented excellence. As a change management specialist, the firm delivers measurable value enhancement and bot-tom-line productivity gains. In order to achieve these results T.A. Cook offers a wide range of professional services which ensure thatall business processes – from strategy definition through management to organisational design – are effective, efficient and sustaina-ble. Complementing the consulting business, the T.A. Cook Academy has become a leading organiser of international conferences andseminars relating to Asset Performance Management. Annual events include the MainDays summit as well as conferences centred ontopics such as Shutdowns & Turnarounds and Capex Management. T.A. Cook’s clients are typically businesses, their suppliers andcontractors working with significant industrial assets across multiple sectors. The company has particular expertise in the petrochemi-cals, plastics, pharmaceutical, transport, mining and food sectors as well as excellent knowledge of regulated environments occupied bygas, water and electricity utilities. You will find further information at: