Energy Efficiency for Manufacturing

Energy Efficiency Best Practices for Manufacturers

Energy Efficiency Best Practices for Manufacturers

Operating with energy efficiency in mind is always a good idea for your business and the clients you serve. There are plenty of societal, environmental, and economic benefits of energy efficiency.

When your company demonstrates a commitment to being energy efficient, you garner a positive reputation in the industry — one that can provide economical benefits as well. When your customers consider you to be a steward of the environment, you generate more business. In addition, the energy-efficient practices you put into place can provide substantial savings for your company.

Read on to learn more about energy efficiency in manufacturing. You’ll find out why energy pricing is unpredictable, how others in the manufacturing industry have successfully implemented energy-efficient practices, and how you can become more energy efficient.

Why Energy Prices Fluctuate

Energy is a commodity, and it follows the laws of supply and demand. As with all commodities, greater supplies mean cheaper costs. The flip side of that relationship is also true: The more demand there is, the more the commodity costs.

The global demands for energy continue to increase, and that’s not likely to change for any prolonged period of time. It’s in every producer’s best interest to try to be as energy efficient as is reasonably possible, especially since prices fluctuate around an increasing trend line.

However, the cost of energy doesn’t follow the same cost-demand model as most other commodities. One significant difference in pricing energy as compared to other commodities — such as gold, corn or cattle — is energy prices are subject to fluctuations based on speculation. This speculation is based on a number of potential variables, including:

  • Conflicts in the Middle East
  • Refinery closures
  • Electrical grid problems
  • Regulations

All of these and other potential issues lead speculators to drive up the cost of energy. Those costs are then passed along to you and your customers. You and your customers want to make these unpredictable variations have the least impact possible.

Being energy efficient helps achieve that goal. As a manufacturer, you have many ways to incorporate energy efficiency into your best practices, and you can serve as a great example for others.

The best ways to find efficiencies depend on your particular industry. Let’s start by examining the motor vehicle industry before expanding the possibilities to virtually any industry and any sized manufacturer.

Energy Efficiency in the Motor Vehicle Industry

Energy efficiency in the motor vehicle industry is of primary importance. The U.S. motor vehicle industry employs a whopping 861,000 workers. Approximately 70 assembly plants produce 12 to 13 million cars and trucks each year. Trends in U.S. production show increases in SUVs, minivans and trucks, and decreases in more traditional car production.

Within the broad area of vehicle production, there are many individual and collective-parts manufacturers. Each plays a role in the ultimate assembly of every motor vehicle that rolls off the production line. These manufacturers include the companies that make engines, axles and transmissions, among other components. Each of these can be energy-intensive operations and offer opportunities for energy-efficiency savings.

car manufacturer savings

In addition, the body and chassis of a car, truck, SUV or minivan are assembled from steel alloys, aluminum, fiberglass, and plastic. Manufacturers are looking for ways to keep the overall weight of these assemblies as low as possible while still meeting safety standards. Keeping the overall weight of the vehicle down leads to greater fuel efficiency and more energy savings.

How much energy is needed to make all those motor vehicles every year? In general, it amounts to 1 percent of the total vehicle production cost. Most of these costs are for electricity demands that are found in four areas:

  1. Painting systems
  2. Facility lighting and HVAC
  3. Compressed air
  4. Welding

Being energy efficient can help lower the costs of vehicle production, making products more attractive for customers and putting more earnings on your bottom line.

Here’s another example: In automobile painting systems, manufacturers are now using primers and clear coats that are attracted electrostatically to the vehicle. These “powder paints” require less energy to produce than solvent paints, ultimately making them cheaper to use without resulting in any longer production times.

The U.S. Environmental Protection Agency has suggestions for improving energy efficiency in motor vehicle manufacturing. These include:

  • Implementing energy-monitoring systems.
  • Participating in the EP ENERGY STAR program to track efficiency.
  • Changing staff behavior to be aware of energy use.
  • Working with utility personnel to implement more effective solutions.

Volvo and other car manufacturers have reported significant energy savings by implementing these measures. Volvo, for example, adjusted its ventilation and heating controls and coordinated with staff to reduce energy usage. The total cost of the plan they implemented was about $375,000, but that cost was recouped in savings inside of a single year.

Other manufacturers, such as General Motors, have reported even larger savings — more than $3.6 million annually. BMW and Rover Group have also put management policies in place to save energy. In BMW’s case, energy savings totaled about 44 percent of costs. In Rover’s case, the savings exceeded $1.9 million in just six months.

As motor vehicle manufacturing is a complex process of assembling multiple parts, the details above are just some of the many ways the energy-efficiency systems can be put in operation. Focusing on the four main areas mentioned above is expected to yield the greatest benefits going forward.

The Big Picture

Around the globe, manufacturing accounts for one-third of all energy consumption. That means manufacturing is a prime area for seeking ways to be more energy efficient. Even small gains can have big impacts when scaled over global operations.

Industry executives agree that energy efficiency is a prime concern. That’s in part due to a focus on the bottom line, as well as regulatory pressure from host countries internationally. About 77 percent of manufacturers have stated that energy efficiency is critical to their long-term profitability. About half that percentage asserts that sustainability is crucial too.

The U.S. Department of Energy (DOE) suggests there are five top areas for future research and development (R&D) for energy savings in manufacturing:

  1. Waste heat and energy recovery
  2. Improving boilers, process heaters and cooling systems
  3. Integrating smart energy systems
  4. Integrating flexible energy systems
  5. Putting in place smart sensors and automation/robotics

A 2004 report indicated DOE expectations that close to $19 billion in savings could be achieved annually by advancing solutions in these areas.

The National Association of Manufacturers (NAM) reported almost 10 years ago that substantial savings were being found by numerous companies that had invested in energy efficiency. Among these were Frito-Lay, Riverdale Mills, DuPont, and Procter & Gamble.

Some of the innovations being used were simple. For example, Riverdale Mills, which makes steel-welded wire mesh, brought natural gas-powered generators online that create electricity at half the cost of the public utility. The company also performed a restoration on a 1901 hydroelectric turbine. That cost them $130,000, but it also saved them $100,000 annually in electricity costs.

CAT statistic

Other innovations have been more intricate. Caterpillar created a new air management system to control emissions in their heavy equipment. Efforts like that aren’t easy or even always possible. But when this invention went to market, the results were very positive. One Caterpillar customer with 300 Caterpillar-powered engines reported expecting annual fuel savings of about $1.2 million. Fuel efficiency was also increased by about 20 percent.

The Challenges for Small and Medium-sized Manufacturers

There are many advantages when you’re in charge of production at a large company. You may have many areas of opportunistic improvements coupled with the knowledge of how to effect the changes you want to see. You may also have the resources to accomplish these objectives.

That’s not always the case with small and medium-sized manufacturers. Smaller manufacturers may have fewer resources, and managers may be multitasking. Without a dedicated effort directed toward energy efficiency, finding ways to make those savings is challenging.

The Small Business Association provides several steps for small and medium-sized manufacturers to focus on. They include:

  • Assessing the energy use of your production.
  • Setting goals for energy savings using measures of industrial energy efficiency.
  • Improving the efficiency of commonly used systems, such as motors and pumps, compressed air, process heating and lighting.
  • Turning off anything you don’t need turned on.
  • Getting your staff on the same page with you.

When you’re getting started, it’s important to have explicit quantitative goals. For example, you might identify the energy performance rating of your equipment using the EPA’s national 1-100 rating system. You can then set a goal of improving that rating by 10 percent or another reasonably feasible amount.

Common systems (motors, pumps, etc.) use about 80 percent of all industrial energy. It’s natural to focus on those systems first because that’s where the greatest amount of savings can be found. It’s a lot like Willie Sutton’s famous answer to why he robbed banks: because that’s where the money is.

The Manager’s Role

Potentially the most important step you can take to improve energy efficiency as a manager of a manufacturing plant is to ensure your employees actively seek ways to find savings. The Small Business Associations suggests that managers hold special staff meetings to review basic energy-saving procedures and ensure employees have current knowledge of the ENERGY STAR guidelines.

energy saving routinesImplementing basic energy-saving routines can really help, too. For example, the Small Business Association suggests replacing all light bulbs once they reach 70 percent of their expected life span. Doing this will reduce costs by more than 25 percent. Taking obvious steps, such as ensuring that outdoor lighting is turned off in the daytime, can also create greater energy efficiency.

For managers who want to rely on industry standards, the International Organization for Standardization (ISO) provides voluntary standards for improving energy performance. The ISO standard for industrial plants is ISO 50001. There’s a lot of helpful information to guide you.

The Water Research Foundation has also published a guide to assist with standard best practices. Their research showed that savings can be made at every scale in the water utility industry. The primary target areas to study for improvements include pumps and motors, because they account for 80 to 90 percent of the energy used at water utilities.

Managers should also stay up-to-date on Congressional legislation pertaining to energy efficiency. The most recent bills to come under consideration are the Senate Energy Savings and Industrial Competitiveness Act of 2015 (S. 720) — sponsored by Senators Robert Portman (Ohio) and Jeanne Shaheen (New Hampshire) — and a House of Representatives bill by the same name (H.R. 2177) — sponsored by Representative David McKinley of West Virginia.

The Consumer Electronics Association (CEA) supports these measures. “We commend and thank Senators Portman and Shaheen for reintroducing this bi-partisan common-sense legislation,” said Gary Shapiro, president and CEO of the CEA. The bill would reduce carbon emissions and increase energy conservation throughout the consumer electronics industry and generally improve energy efficiency in a wide range of manufacturing sectors.

Managers should also seek government assistance when possible. For example, the car manufacturer Nissan North America secured support for its efforts from the U.S. Department of Energy. That support included a $1.4 billion loan guarantee and a grant for 70 percent of the cost of implementing eight efficiency projects. Those projects are anticipated to save $700,000 annually. If government help is available, it’s your responsibility to find it and put it to use for you.

Energy Efficiency is a Good Idea Regardless of the Industry

As a plant manager or other principal in the manufacturing world, you have to answer to multiple stakeholders. You have shareholders, customers, colleagues, and suppliers — and each has their own aspirations. But one aspiration that’s common to all is to ensure your products are made with the best quality at the lowest prices.

Across all manufacturing industries, there are common themes to help get the most from the energy you use. You need to have a focus on efficiency, have leadership that rewards efficiency and use reliable metrics to ensure you are accurately measuring your progress.

Here are four quick thoughts for you to get started with your focus on improving energy efficiency.

  • Look for ways to turn off machines that are not in use.
  • Reduce motor speeds when you can.
  • If you can run compressors at lower pressure safely, doing so can also have a substantial impact.
  • Don’t waste heat — recirculate it.

You should also feel free to interact with colleagues in the industry. Many times you’ll find that advances are widely published rather than held as trade secrets. Advances others have achieved can serve as inspiration for your own.

Shipley Commercial Energy Can Customize Your Experience

At Shipley Commercial Energy, we’ve been in business for 85 years. We have extensive experience in helping manufacturers improve the energy efficiency of their products and processes. We can give you a variety of ideas for saving energy in your manufacturing plants, regardless of the types of products you make.

When you decide to focus on industrial energy efficiency programs, give us a call from 8 a.m. to 5 p.m. at 1-800-839-1849 or contact us online. We know how to increase energy efficiency in all sorts of manufacturing processes. Partnering with Shipley Commercial Energy gives you the very best talent as we strive to be your long-term commercial energy partner.