Building an efficiency foundation
Carrying out an audit is key to understanding where and how your industrial enterprise will benefit most from energy efficiency interventions.
The audit will let you see where your business is spending more than it needs on energy and where inefficiencies exist.
Audits should be repeated on a regular basis, say every three years, and should be complemented by a program of right-sizing and connecting industrial assets.
All good transformation projects rely on sound preparatory work. In energy efficiency, the key to success is making sure you know where you are to begin with—and that you are heading in the right direction.
For this reason, the foundation of any efficiency program should be a comprehensive audit that looks at how energy is being used—and where it is being wasted.
Action 1: Understanding your starting point with an energy efficiency audit
The carbon impact
An energy efficiency audit will not deliver reductions in itself but can typically be used to identify savings of up to 20%, depending on the level of detail involved.
Why do it?
Most industrial enterprises waste large amounts of energy, yet they do not know it. Oversized machines, assets on standby and poorly maintained hardware all contribute to ghost loads that use up power without any useful output. The only way to locate these loads is to carry out an audit. Usually undertaken by an established energy service company, an audit will give you a baseline against which to measure progress on efficiency, as well as potentially contributing to broader aims such as the achievement of ISO 50001 certification. Audits should be repeated at regular intervals and if accompanied by a sensor deployment program can lead to continuous monitoring of energy use across the enterprise, allowing savings to be achieved in real time. What type of audit should you choose? The American Society of Heating, Refrigerating and Air-Conditioning Engineers provides standards for three types of audits:
Building the business plan
- Budget around 1% of your total annual energy bills, which will depend on your sector and local power and fuel prices, to pay for the audit.
- Allow roughly one to three days for the audit itself, depending on the size and complexity of the process.
- Energy audits do not produce a direct return on investment but bear in mind the average cost savings for a single energy-intensive system identified within the U.S. Save Energy Now program was $1.4 million.
Next steps
- Nominate a senior-level champion for energy efficiency. The audit is just the first stage in what is likely to be a highly profitable transformation program.
- Contact energy service companies for quotes and information.
- Check for funding and incentive schemes from bodies such as the European Union and the U.S. Industrial Efficiency & Decarbonization Office.
Action 2: Rightsizing industrial assets and processes
The carbon impact Most industrial assets tend to be oversized for a range of reasons, such as building in safety margins or allowing processes to cope with peaks in demand. The extent to which this oversizing is useful varies greatly from one industrial enterprise to another, however.
While there are no hard-and-fast rules about the level of energy and emissions reductions that can be achieved through right-sizing equipment, the improvements can be significant. In one published example, a company was able to remove an entire packaging line, saving $1 million a year.
Why do it?
Industrial audits often reveal equipment set-ups are larger than needed for the function being performed. This could be because the equipment specification was over-specified in the first place, or more likely because operating conditions have evolved over time.
Oversizing of components can result in excessive energy use and inefficient loadings. You can improve loadings by adjusting settings or reconfiguring production systems. In other situations, it may be better to replace existing assets with more appropriately specified equipment.
Rightsizing can and should be part of the continuing life-cycle management process within a facility. The increasing use of digital sensors in process systems creates considerable opportunities for a flow of data that can be used to identify inefficient equipment loadings.
Building the business plan
- Use the output of your energy efficiency audit to identify right-sizing opportunities.
- Bear in mind that oversizing can be beneficial for IE1 and IE2-rated squirrel-cage induction motors that are in use most of the time. For most IE3 and IE4 motors, oversizing has no cost benefit and right-sizing could yield returns.
- Prioritize right-sizing of assets according to the level of wasted energy involved and the ease of correction, so cost savings from load adjustments and reconfigurations help pay for machines that need replacing completely.
Next steps
- Check that your energy efficiency audit gathers enough information to identify rightsizing opportunities.
- Engage with technical experts to ensure right-sizing does not compromise safety and performance margins.
- See if rightsizing can be combined with measures such as the installation of variable speed drives for greater effectiveness.
- Analyze rightsizing opportunities from device up to plant level.
Action 3: Bringing connectivity to physical assets
The carbon impact
Despite the significant benefits that can be achieved by integrating industrial assets into an Internet of Things (IoT) network, ABB survey data indicates that only around 35% of enterprises have so far undertaken industrial digitization programs at scale.
Such programs could help reduce industrial energy use by between 10% and 30%, based on estimations from organizations such as McKinsey & Company and the American Council for an Energy-Efficient Economy.
The Energy Efficiency Movement estimates that bringing connectivity to currently unconnected industrial assets could save 10% of their electricity and 5% of their natural gas consumption under a low-efficiency scenario, and 22% and 11%, respectively, in a higher growth outlook.
Why do it?
According to Energy Efficiency Movement estimates, simply extending the IoT to cover more industrial assets could cut global emissions by more than 17% between 2023 and 2030—the largest emissions impact of any of the 10 measures analyzed in this guide. But perhaps the greatest driver for industrial asset digitization is financial. As well as helping assets to run more efficiently, reducing electricity and gas consumption, the IoT can reduce maintenance costs and downtime, improving the productivity and return on investment for a range of industrial processes and facilities. A 2021 report by McKinsey identified that by 2030 the greater use of IoT technology by the industrial sector could generate between $1.43 trillion and $3.32 trillion per annum globally. The Energy Efficiency Movement estimates global industrial energy efficiency gains could represent up to around $259 billion of this.
Building the business plan
- As noted above, asset digitization can deliver rapid returns on investment not just from reduced energy use but also across a range of other areas.
- Digitization can and should be integrated into any industrial asset upgrade program.
- Your IoT business case should focus on solving commercial problems, with a clear definition of potential value and an acknowledgement of how processes and behavior might be affected.
Next steps
- Ascertain the extent to which your industrial assets are already connected, and the options for connecting the rest.
- Find out if your IoT rollout might be eligible for innovation funding or similar sources of support.
- See if there are synergies to be gained from combining an IoT project with asset upgrade programs.