How to Save on Energy Costs in Manufacturing

Industrial manufacturers are among the biggest domestic users of energy — consuming more than 24,000 Tera BTU annually according to the most recent US government surveys. When you add up the numbers, it’s equivalent to powering over 450 million homes a year with electricity. But with careful analysis and proper investment, you can reduce your industrial energy consumption and improve your bottom line. Here is how to get started.

According to the International Energy Outlook 2016 report from the EIA (US Energy Information Administration), the global industrial sector consumes over half (54%) of the world’s total delivered  energy.  Here in the US, the top industrial energy consumers are the chemical, petroleum refining, and forest products industries, as shown in the following EIA Survey using 2014 data:

Total Energy Use by US Domestic Industrial Manufacturers (2014 EIA Survey)

To be honest, it’s pretty hard to wrap your head around how big these numbers are. To put them into perspective, we made the following calculation: the total annual US manufacturing energy use (24,084 Tera BTU) is enough to power nearly 460 million homes with electricity. That’s quite a lot, especially considering there are currently only 128 million households  in the US.

Given the scale of these numbers, finding savings of even a few percentage points can make a big difference to the bottom line. Let’s get started!

How to Save Money on Energy Use in an Industrial Setting

Here are four practical steps you can take to reduce your energy use at your industrial plant.

Step 1. Identify the Energy Champions on Your Team

Do you already have an existing process or quality improvement program (such as Six Sigma) in place at your manufacturing facility? If so, you are one step ahead of the game.

Why?

Improving quality and productivity is an ongoing process – so too is managing your energy use. In other words, this is not a ‘one and done’ operation – you need to treat energy management as a serious ongoing project – just like any other continuous improvement process.

That’s why modeling your energy saving initiative after some well regarded (proven) continuous improvement programs, such as lean manufacturing, agile programming, Six Sigma, and the like will help you achieve long-term success. (If you need a primer or a refresher on these programs, take a look at our guide to lean manufacturing here.)

While it’s true that everyone at your manufacturing facility is collectively responsible for saving energy, step one will be to identify a team of “energy champions” within your organization who are empowered to investigate existing costs and find ways to achieve new levels of energy efficiency.

Step 2. Scope out a Project Plan for a Thorough Energy Audit and Identify Relevant Benchmarks

Conducting a thorough energy audit is a challenging task – it requires the sleuthing skills of Sherlock Holmes and the inventiveness (and electrical skills) of Thomas Edison.

Your initial energy audit needs to identify your current gross energy usage, which can be used to compare to available industry benchmarks in your particular sector. (Later we’ll be looking at parsing out energy use by specific production processes and by time of day.)

Fortunately, the EPA, the Department of Energy, and the Energy Information Agency provide free energy consumption benchmarks for many different industrial sectors to help you get started.

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HAVE A MANUFACTURING WORKSTATION PROJECT STARTING SOON?

Ready to improve productivity? Formaspace manufactures workbenches for lean manufacturing environments. When efficiency and durability matters, trust our team to create task-specific furniture systems. Here, we build 5s solutions. our industrial designers provide a consultation complete with 2D/3D drawings. Talk to one of our design consultants to get started on your furniture project today or design your workstation in 3D online.

DESIGN WORKSTATIONS IN 3D

Light Industry Example: Pharmaceutical Manufacturing

Let’s start with a light industry example: pharmaceutical manufacturing.

The EPA reports that, on average, domestic pharmaceutical manufacturers expend 70% of their energy costs on electricity (totaling $806 million nationally in 2013) and 30% on fuels (totaling $349 million in 2013).

Most of your energy use will either fall into process-related (e.g. energy used for powering equipment and production lines) or non-process related categories (e.g. the energy used to power lighting, heating and cooling, the office, etc.).

Of course, your actual energy use is highly dependent on the size of the plant, as shown in this EPA chart showing the energy use for small, medium, and large pharmaceutical manufacturers:

As we’ll see in the next step, there is also a big variation in energy use between the two main types of pharmaceuticals plants – those that process bulk pharma chemicals (more energy-intensive) or operating a fill-finish facility (less energy-intensive.)

Heavy Manufacturing Examples: Iron and Steel, Chemical Manufacturing

No industrial energy audit is easy – but it can be even more challenging in the heavy manufacturing sector.

Why? There are many reasons, but for starters, many heavy manufacturing plants require evaluating three different energy “buckets” that are closely tied together:

A. Onsite Energy Generation

• Onsite power plants supplement the external electric power grid. Examples include Conventional Boilers / Steam Plants, Combined Heat and Power (known as CHP or Co-Generation), Renewables, and more.

B. Process Energy

• Energy systems used to turn raw materials into usable products. (Examples include blast furnaces and smelters for iron and steel production as well as intensive heating and cooling processes used in chemical manufacturing.)

C. Non-Process Energy

• Energy systems used for maintaining the building HVAC environment, lighting, office support, etc.

To get an overview of how this works in practice, take a look at the energy flow diagrams below.

The first diagram is for a chemical manufacturing plant, followed by one for an iron and steel plant.

Step 3: Quantify Energy Use by Equipment Type, as well as by Production Process and Time of Day.

In the previous step, we introduced the idea of scoping an energy audit and comparing your energy use to available industry benchmarks.

But there is much more work to be done to really understand your unique industrial energy usage and to uncover potential beneficial energy savings. We need to go deeper – in three areas:

A. Measure your Energy Use by Individual Equipment or System

The more granular the information, the better decisions you can make. That’s why it’s important to meter energy use for specific equipment as it’s used in the real-world conditions of your plant. (The factory specs are helpful to a degree, but they may be unrealistic, or you may discover a machine is way out of spec.)

TIP: to get a thorough understanding of your actual electric energy use, you will want to invest in direct measurement of the equipment on your lines (rather than relying on the original OEM specifications). This means budgeting funds to acquire and install energy metering gear throughout the plant.

B. Measure your Energy Use by Production Process, for Each Production Line

Does your facility produce different batches of products or materials? Do you have more than one production line? Industrial processes are highly dynamic when it comes to energy use. By measuring total energy consumption by output and by production line, you might discover product B is cheaper to make energy-wise than product C, and that using production line D uses less energy than production line E.

C. Measure the Timing of Processes

Energy costs from the power grid can vary significantly throughout the day; electric rates are generally cheaper at night and rise during the day, particularly during periods of peak demand or if power plants go offline for maintenance. For relying on variable cost renewable energy, you know that solar prices can rise on cloudy days (due to reduced production), and wind energy can become pricier when the winds die down.

That’s why it’s important to evaluate which processes can be shifted to different times of the day, such as when energy rates are cheaper. You also need to evaluate if you could benefit from an energy plan contract that would disconnect you from the grid during peak demand – but remember: not all processes can be safely terminated at a moment’s notice.

Light Industry Example: Pharmaceutical Manufacturing

Let’s return to our pharmaceutical manufacturing example.

As is common in industrial facilities, the amount of energy used depends on the processes at work. In the case of pharma, fill and finish operations generally use far less energy than bulk chemical manufacturing processes.

You’ll want to measure the energy use for each of your processes, as well as quantify the energy required to run each piece of equipment. The following chart identifies which are likely to be the heaviest energy users for bulk chemical and fill-finish operations:

This provides a jumping-off point for making the energy use measurements for both your processes and the individual systems and equipment at your plant. (Remember, to find more data on energy usage in other industries, see these EPA reports online.)

Heavy Industry Examples: Chemical and Iron and Steel Manufacturing

The task of quantifying energy use in heavy industry facilities is typically orders of magnitude more difficult.

There are three reasons for this.

The first one is the added complexity of evaluating onsite energy generation, which is often directly interconnected with heavy-duty process energy systems.

That brings us to reason number two: it’s more difficult to isolate processes for measurement when so many systems are tied together. To illustrate the point, take a look at the Sankey energy flow diagrams from the Department of Energy that show energy usage in typical industrial plants. (You can access both static and interactive versions of these diagrams.)

And, finally, the third reason it’s more difficult to evaluate energy use at heavy industry plants: most of these facilities (including chemical plants, steel-making operations, petroleum refining operations) are designed to run continuously, or at least stay in operation for long extended periods of time.

Consequently, performing a stop and restart operation to measure energy usage within specific areas of the plant or isolate a process for measurement may be either difficult or impossible –  instead, you may have to make assessments based on fuel usage or other indirect measurements and estimates.

Step 4. Identify Candidates for Improvement and Calculate the Return on Investment (ROI)

The next step is to identify potential areas of improvement and calculate the return on investment you could enjoy by upgrading or replacing existing equipment or processes.

The table below lists most of the systems found in typical pharmaceutical manufacturing plants. Each of these can be evaluated to determine whether an upgrade makes economic sense.

In some cases, we have been able to provide links to EPA and Department of Energy software tools that help you evaluate energy use and make intelligent decisions about investing in new systems to increase energy efficiency.

• Biologics Fermentation / Incubators
• Centrifuges
• Chemical Synthesis Processes
• Cleanrooms
• Compressed Air Systems
  • Tip: See DOE AIRMaster+ and AIRMaster+ LogTool and the Compressed Air Challenge
• Data Centers
  • Tip: See Lawrence Berkeley National Laboratory’s Data Center Profiler (DC Pro)
• Fans
  • Tip: See the DOE Fan System Assessment Tool (FSAT)
• Fume Hoods
• Fill and Packaging Processes
• Heating, Ventilation, and Air Conditioning (HVAC) Systems
  • See the Chilled Water System Analysis Tool (CWSAT)
• Heat and Steam Distribution
  • Tip: See the DOE Steam System Tool Suite and Steam Assessment Tool and Guide
• Cogeneration
  • Tip: See the EPA Combined Heat and Power (CHP) Tools
• Lighting
• Mixers
• Motors and Motor Systems
• Refrigeration
• Piping Insulation
  • Tip: See NAIMA’s 3E Plus® software program
• Process Heating
  • Tip: See the DOE Process Heating Assessment and Survey Tool (PHAST)
• Separation Processes
• Pumps
  • Tip: See the DOE Pump System Assessment Tool (PSAT)
• Water Plant and Water Usage Systems
  • Tip: See the DOE Water Plant Profiler Tool

Does this list overlap with the equipment and systems at your facility? (It’s always a good idea to check the EPA website for more available energy guides which may cover your specific industry.)

Now let’s turn to heavy industry processes again.

The reality is that making system changes in heavy manufacturing processes is usually much harder.

Why?

Energy-intensive processes at heavy industry plants are usually closely tied to specific equipment or to a specific fuel stock (for example, up to 70% of US iron and steel plants are coal-fired) – so closely tied, in fact, that making a major change to save energy often necessitates building a new production line or even a brand new plant.

This is in contrast to most light manufacturing facilities, which have the luxury of being able to isolate and upgrade their equipment one piece at a time (example: replacing a bulk mixer with a newer model that uses less electricity).

That doesn’t mean you should give up – there are always energy savings to be had at any industrial facility, but it’s important to be realistic about the big picture at the outset of your energy audit.

Formaspace is Your Industrial Factory Partner

When it comes time to make your facility more efficient, safer, and more ergonomic for the workers at your industrial plant, manufacturing facility, or shipping and distribution center, you can count on Formaspace.

We specialize in creating custom industrial furniture solutions for some of the biggest companies in the world, including Boeing, Dell Computer, and Roche, as well as most US military and government and military agencies, and over 300 universities and colleges, including nearly all the Ivy League institutions.

If you can imagine it, we can build it – at our factory headquarters in Austin, Texas.

Take the next step, contact your Formaspace Design Consultant, and find out how we can work together.