What’s next for industrial energy efficiency?
There has been a great deal of thought about how industrial companies can keep delivering improved energy efficiency. And many companies have made great progress. But the question remains, if improving energy efficiency reduces operational costs, why don’t companies do more?
The ‘usual’ reasons cited are lack of capex and resources, poor payback, the need to focus on other priorities such as production and quality, and a resistance to change and complexity.
However, rapid change is underway. For example, more organisations are engaging in a holistic approach to their energy and carbon strategy. By evaluating energy efficiency programmes, on-site renewable potential, storage and electricity market opportunities (e.g., demand side response, ancillary services), organisations can minimise cost, carbon emissions and exposure to volatile energy markets in parallel with improving sustainability performance and capturing additional revenue sources.
Key UK Government policies are now anchored by the industrial strategy and include ESOS (Phase 2 deadline is December 2019), CCAs, CCL and CRC. A consultation on streamlining Energy and Carbon Reporting took place in 2017 with the government’s response expected shortly.
According to the UK government:
- There is insufficient awareness, notably at senior management level, of energy costs and cost saving opportunities that exist across whole businesses.
- There is significant potential for UK businesses to save money, estimated at over £2 billion per year, through improved energy efficiency in buildings and processes (less than 7 year paybacks – Building Energy Efficiency Survey and BEIS analysis).
The consultation explained that the government is considering how to drive further company action, for example, by mandating that companies above a certain size threshold report not just on potential energy efficiency saving opportunities – as is currently the case for ESOS – but also actions taken. In addition, the government is considering extending the reporting of energy and intensity metrics and increasing the frequency to annual reporting (aligning with company annual reports and Greenhouse Gas reporting).
So, there is likely to be more pressure for companies to develop and report on progress made with their energy efficiency plans.
What are the opportunities?
A range of solutions are available which interact with energy/utility, engineering, production and maintenance teams.
Working at the interface of manufacturing production, energy supply and utilities and energy consumption, companies can use the following measures to deliver significant energy savings:
- An Energy Management System, if correctly implemented and actively used, will enable companies to tap into their full energy savings potential. For example, visualising energy management performance through a focused approach that monitors and measures progress against targets, will enable continuous improvement.
- Energy audits offer a streamlined and cost-effective way to reach compliance with legislation and identify savings in energy consumption – 7% on average.
- Data variability analysis (or data analytics) – leading companies are increasingly harnessing the power of ‘big data’ to understand longer term trends in energy consumption metrics, which can identify harder-to-reach’ energy savings.
- Energy culture – working with production, engineering and maintenance teams to assess and deliver energy savings through changes to behaviours – savings can range from 5-15%.
In summary, energy use and carbon emissions from industrial processes will receive increasing attention from regulators, investors, supply chains and consumers. Companies need to continue to deliver incremental energy efficiency improvements as part of longer term strategic energy plans that will deliver low carbon energy supply, purchase and use.
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Leverage our in-depth knowledge of process energy consumption and opportunities to improve efficiencies through a culture of operational excellence. For more information, please contact Paul Noble, Principal Consultant, DNV GL.
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