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Energy Action
How an Energy Management Program Can Keep Energy Costs from Getting the Best of Your Business

Energy costs are rising at historic rates.  Planet earth is growing in population, industrialization and appetite.  One of life's most essential compounds has become a danger to the climate.  And globalization is threatening to destabilize the United States' manufacturing base.   So far there’s been a lot of talk about what to do about energy, but for manufacturers the time for talk is over.  It’s time to act.

The New Energy Imperative

Taking an optimistic attitude toward this disagreeable set of circumstances, a counterintuitive notion comes to light: That every increase in energy costs results in an equivalent increase in ROI for investments in conservation.  For example, one dollar invested in a conservation measure that produced a five percent annual energy savings a few years ago when a hypothetical unit of energy cost ten dollars would have yielded fifty cents.    Today, investing that same dollar at twenty dollars per energy unit will yield a buck. Same dollar.  Same rate. Double yield.  Not very obvious, but obviously very true.

Carnegie Mellon University energy economist Lester Lave expressed the notion in concrete terms: "When natural gas was two dollars a thousand cubic feet and coal was thirty dollars a ton and oil was thirty dollars a barrel, it wasn't worth the time to fix steam leaks or insulate steam lines.  Today, at ten, ninety-nine and one hundred twenty-five dollars, respectively, there should be no lines that are not tight and insulated.  This not an appeal to environmental virtue, it is an imperative for economic survival."

Where the Money Is

Getting down to basics, energy can be used to make a lot of things, but for manufacturers it boils down to four: heat, work, light or waste.  While the laws of physics dictate that we can never get one hundred percent of the theoretical energy out of a quantity of fuel, the fact that we typically get less than thirty percent leaves a lot of room for improvement.  Potential improvements in our industrial energy utilization range from supply-side measures such as incorporating advanced technologies into large, high-efficiency coal and nuclear electric power plants, to demand side measures as simple as turning off lights and motors when they are not in use.

As a practical matter, the demand side is the only side manufacturers have any control over.  Reality dictates that once an electron or a molecule of natural gas spins past the electric or gas meter, ownership passes from energy producer to product manufacturer, no matter whether it performs or not.  As such, all subsequent losses in efficiency belong to the manufacturer.  Happily, the converse is also true.  Every loss not incurred goes to the manufacturer’s bottom line.  Here is where the money is. 

For instance, replacing incandescent bulbs with compact fluorescent bulbs (CFL) can result in energy savings of up to 60%.  Replacing standard motors with high efficiency motors can increase efficiency by between 2% and 5% depending on motor size.  Replacing standard v-belts with High Torque Drive (HTD) V-belts can yield up to 8% improved in efficiency.  Reducing the speed of centrifugal machines by installing variable speed drives (VSD) can result in energy savings in excess of 80%.  In a 100-psi steam system, a 1/8" hole will lose 600 million BTUs of energy over the course of a year.  Sealing the leak can save over $8,000.

From Low Productivity to High Performance

It's nothing to be proud of, but useful to know that according to a 2007 report by the McKinsey Global Institute, the United States has the lowest energy productivity of any developed economy.  Chances are, your company makes a contribution to that statistic, which means a few energy saving, profit enhancing opportunities are probably lurking around the corner.  Finding them means taking stock, looking closely and thinking hard.  If the term energy audit is poking a finger into your thoughts, you’re headed in the right direction.  If you did one ten or more years ago remember, technology has increased the available options, and increases in energy prices tend to boost ROI and shorten payback terms.  So not only do you get your conservation money back faster, but you start turning conservation profits sooner.  If you’ve never done an energy audit, the time is now.

Managing Light, Heat, Power and Motion

In the interests of getting started: You can think about the energy-consuming systems in a manufacturing operation in two ways: By source and use.  Energy sources include: electricity, natural gas, LNG, coal, oil, wood, solar, wind, geothermal, CHP, and other sources.

Energy systems in a manufacturing plant can also be broken down by use: Building and grounds systems, such as building envelope, gates, doors and windows, space conditioning and insulation; Lighting systems, including fixtures, bulbs and ballasts; Thermal systems including, furnaces, boilers, dryers and kilns; Power systems, such as motors, belts and drives; Machine systems, including fans, pumps, compressed air, steam, refrigeration, hydraulic, injection molding and extrusion; and Handling systems, such as trucks, assemblers, conveyors, converters, sorters and disposal units.  Finally, an energy management system integrates and controls all of the above in order to coax the most and best performance out of every electron and molecule that makes the meter spin.

Implementing an energy management system begins with an energy audit, which can be a highly complex exercise in engineering and analysis, but begins with a basic review of a plant’s energy consumption history, systems, processes and options.

Audit guides available from Rutgers University and the Bonneville Power Administration suggest a multi-step process to conducting an industrial energy audit:

1) Appoint an energy conservation team

2) List all energy suppliers and costs per unit of energy

3) List all energy costs for at least one year

4) List all energy consuming equipment and systems

5) Conduct a front-to-back plant tour assessing all machines, motors and systems for energy performance, including: matching energy source, motor/machine size, productivity, cycling, scheduling, runtime and operational efficiency with associated processes.

6) Assess overall energy performance based on data collected

If the do-it-yourself route is not for you, the U.S. Department of Energy is prepared to help by means of with one of its 26 Industrial Assessment Centers (IAC), which provide, free energy audits for small and medium sized manufacturing firms.  The service is also available to large manufacturers for a fee.  Lehigh University serves eastern Pennsylvania while West Virginia University serves western Pennsylvania.  Lehigh’s IAC director Professor S. Neti says his center conducts about twelve industrial energy audits annually.  The audits provide detailed energy use data along with anticipated savings and payback periods for all recommendations.  Typically, the Center makes about twelve recommendations per audit, of which manufacturers implement roughly half within one year.   “Not all recommendations are equal, “ Professor Neti said.  “One might be six hundred dollars and another one might be eighty thousand dollars.  It’s up to the manufacturer to implement the recommendations.”

With energy prices at historic highs, the decision to implement makes more sense than ever because economic benefits of energy conservation have never been more attractive. The time to act is now.

Manufacturers in eastern Pennsylvania can contact Lehigh University’s Industrial Assessment Center:  (610) 758-4107   Email:

Western Pennsylvania manufacturers can contact the West Virginia University IAC at:
(304) 293-4607 E-mail:

A free download of Rutgers University’s Self-Assessment Workbook is available.

©Copyright 2008 Thomas P. Imerito/ dba Science Communications

This article first appeared as an Energy Insider cover story.

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©2009 Science Communications