Energy management: The start of something big
According to the National Resources Defense Council, process industry energy costs have risen from below 7% of total cost in the 1950s-90s, to between 15% and 20% today.
The means are being put in place to better understand energy consumption, on the path to optimizing its use in industry.
According to the National Resources Defense Council, process industry energy costs have risen from below 7% of total cost in the 1950s-90s, to between 15% and 20% today. Not only that, but close to one-third of energy consumed in the U.S. is done by industrial and manufacturing companies. Yet many enterprises, large and small, are still taking first steps for industrial energy management
One reason is the number of unknowns.
- If a company still considers energy as a fixed cost and budgets by means of allocations, it’s a good bet no one looks at consumption details by department, process or equipment type.
- It’s assumed energy prices only go up, but right here in the U.S., shale-field development has decoupled natural-gas prices from that of oil, keeping natural gas prices low. The cyclical nature of energy prices makes it difficult to estimate investment return for energy-related projects.
- What future U.S. energy policy will be is unclear.
- It’s uncertain how soon a Smart Grid that allows true demand-response energy generation will be available.
A survey by E Source, Boulder, Colo., found “priorities for energy managers are increasingly focused on measuring and benchmarking energy use at facilities, obtaining funding to carry out improvements, engaging employees to participate in energy efficiencies at multiple levels, and keeping management informed about energyefficiency results,” Dr. Kevin Vranes, director of E Source energy management services, said.
In other words, they’re just getting started.
Notwithstanding, products and services for facilities energy management abound. More than a dozen software companies were founded based on the prospect of carbon cap-and-trade legislation. Some have already disappeared through merger-and-acquisition activity once that legislation failed to move forward in the U.S. Congress.
The major global automation vendors feel they’re best positioned to serve industry. Energy management’s growing importance is evidenced in the solutions they’ve introduced the last several years. It’s also remarkable the extent to which they are identifying themselves as being primarily engaged in energy management.
According to Pike Research, under these conditions the U.S. market for industrial energy management software and services will rise from $960 million in 2011 to $5.6 billion by 2020, a compound annual growth rate of nearly 22%.
If this level of investment is attained, several things will have been achieved. Manufacturers will have a more granular view of the energy profiles inherent in their processes and equipment. Two, energy costs increasingly will be an item on bills of materials or recipes, which means compensation plans can be used to incentivize for energy management.
However, while there are plenty of things for companies to do now — from use of variable frequency drives to identifying ways to idle unused equipment to be brought back on line quickly — other major opportunities await progress on the Smart Grid.
What’s offered here is an opportunity to watch and participate as our engineers and scientists tackle one of the most compelling issues of our time: ensuring that energy resources are there to adequately and responsibly clothe, feed, shelter, and employ as many of the seven billion people on this planet as possible.
- Kevin Parker is content specialist with CFE Media. Reach him at firstname.lastname@example.org.
This is part of the Control Engineering December 2011 Industrial Energy Management supplement.