Want to save money? Watch your plant’s energy use
Want to save money? Watch
your plant’s energy use
Smart machines, sensors and
artificial intelligence tools work in concert for continuous monitoring to help
save a plant energy.
By
Scott Dowell January 27, 2025
Learning Objectives
- Learn how sensors, smart machines and other automation solutions can provide real-time insight and enable data-driven decisions to optimize production efficiencies.
- Discover how manufacturers can kickstart a sustainability program in a phased approach that minimizes risk and cost while speeding return on investment.
- Determine the information that is critical to building a sustainability program and the best ways to measure the impact from a financial perspective as well as an operational one.
Energy use insights
- Energy use can significantly impact an organization’s bottom line and maintain competitiveness.
- Sensors, smart machines and other automation solutions can improve energy efficiency.
- Energy efficiency and sustainability can often seem like “nice to haves” for plant managers and operators who are laser-focused on keeping lines running. But energy use can have a significant impact on an organization’s bottom line and be a competitive differentiator.
While manufacturers do a good job of capturing the tier-one and tier-two costs of embedded materials, components and even labor into their finished products, they often don’t capture – or know how to capture – energy cost as an ingredient. It is critical that manufacturers think of energy as an embedded cost in each unit of product produced.
The good news? Sensors, smart machines and other automation solutions can help improve energy efficiency and ensure that production lines are running sustainably and cost-effectively. These tools provide data to identify inefficiencies, allowing for adjustments to equipment and systems for optimal performance.
But where do manufacturers start, what data do they need to get these programs off the ground and how is return on investment (ROI) measured?
Three ways to kickstart good energy use practices
Sustainability
can happen in baby steps. Manufacturers that know they aren’t operating as
efficiently as they could be but aren’t looking to make a big sustainability
investment right away (i.e. buying new equipment) can kickstart a
sustainability focus with a series of smaller steps.
Step 1: Understand how power is purchased
How
manufacturers purchase power from the utility can have a major impact on
overall energy costs. Most industrial and commercial accounts are on a peak
demand program with their utility provider. The catch is that if a manufacturer
generates a surge in demand (a peak) that lasts for a certain duration of time,
usually 15 or 30 minutes, then the actual current rate at that moment can be
made retroactive for their entire monthly bill.
Understanding how you pay for power can significantly influence your bottom line. One customer in the Southeastern U.S. saw its rate jump from $0.07 per kilowatt hour (kWh) to $1.17 per kWh in one month because they didn’t have a firm grasp on how they purchased power from their utility.
It is critical for plant managers to understand how they are paying for power and review their bills to know when surges are being assessed and when changes to use patterns could avoid them.
Step 2: Implement tools to measure and track energy use
As
the saying goes, “what cannot be measured cannot be fixed.” Many manufacturers
simply think of energy use as a cost of doing business that they have little to
no control over. Consequently, they don’t capture the cost of energy or use
outdated methods, such as dividing total energy costs by the overall square
footage of each department or building/area. Thus, it may look like the
warehouse or storeroom pays that same internal cost rate as the heavy
manufacturing areas. But this is not accurate.
The first step for many manufacturers is to implement a measurement system to create a baseline and understand which parts of the operations are consuming the most energy. Investing in sensors or systems that provide detailed visibility into the energy use by production line or even further by individual machines is critical. These tools can take snapshots of energy use or continuously monitor it to give operators or plant managers a sharper image of their overall energy consumption and the associated costs.
Not only will establishing a baseline help identify program outcomes, but many manufacturers looking to apply for government stimulus funding, tax credits and rebates will need a baseline in place and real-time data recording to be awarded funding and pass future audits.
Figure 1: Automation solutions provide real time insight and enable data-driven decisions. Courtesy: Wesco
Step
3: Invest in new machines/platforms/infrastructure that are more energy
efficient
Using
older, less efficient equipment or running machines when they’re not needed,
such as when demand is low, wastes energy and adds unnecessary wear and tear.
This can negatively impact both operational costs and sustainability for
manufacturers. Organizations that are further along in their sustainability
journey or those that identify energy use as a primary cost driver may want to
consider investing in more energy-efficient equipment or advanced platforms
with artificial intelligence (AI) that can help optimize energy use.
AI and machine learning can then forecast energy needs and automate decision-making for better efficiency. Predictive maintenance also plays a crucial role in preventing energy waste.
For example, AI and sensors can monitor heating, ventilation and air conditioning equipment use to determine if it’s running unnecessarily, providing opportunities to save energy. Similarly, these tools can identify if a motor is running hot, which could indicate that a machine is either running inefficiently or in need of maintenance.
Securing ROI for energy efficiency
Sustainability
and energy efficiency can be a competitive differentiator and can make a
measurable impact on a manufacturer’s bottom line. With the right data and
systems in place, manufacturers can make more strategic, data-driven decisions
that can impact multiple areas of the operation — from quality to productivity,
enhancing overall ROI.
To see how focusing on energy use can affect your business, consider two real-world examples:
Global steel manufacturer: During the production grade changes, there was a period where an unusable intermix was produced. The manufacturer had to cut the intermix using a plasma cutter, which used a tremendous amount of energy. Then the intermix material was remelted in the furnaces in small amounts. Operators were making these cuts on instinct and typically erred on the side of caution. By using AI to predict quality degradation from one product grade to the next, the manufacturer was able to make more accurate cuts, saving both material and energy. This process generated more than $8 million in savings per year.
Furniture
manufacturer: One furniture manufacturer was unable to adequately compete
because of its poor energy use. The company competed against overseas
manufacturers who made a cheaper product. Although the manufacturer could
switch production lines to make a similar product, their total energy costs
were twice that of their competitors. This meant they couldn’t compete with the
other manufacturers and had to exit the market.
While
these examples may be outliers, they demonstrate the power – and financial
benefits – of energy reduction measures. Even small, incremental improvements
can add up over time. A commitment to sustainability can also open
opportunities for government subsidies, tax breaks or other incentives that can
help with ROI.
Making suitable choices toward energy efficiency
Optimizing
operations, enhancing sustainability and implementing advanced tools can
understandably seem overwhelming. It’s vital to bring in a trusted partner who
understands the needs and goals of an organization.
Whether that’s simply understanding how energy consumption is impacting the bottom line or implementing advanced solutions that can continuously monitor energy use, a trusted partner can help ensure that sustainability efforts not only lead to greater production success but also greater ROI.
Scott Dowell is the senior vice president and general manager of U.S. industrial and commercial, industrial and government at Wesco.
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Author
Bio: Scott Dowell is Senior Vice President and General Manager, Industrial and
CIG, at Wesco. He has more than 25 years of experience and leads the strategy,
execution and growth of Wesco’s industrial, automation, institutional and
government end-user business throughout the United States.
