Enabling Business Energy Efficiency

Energy costs have steadily risen over the last decade and are expected to carry on doing so as consumption grows worldwide.

Especially for businesses, the cost of energy is an increasingly significant issue. Indeed, a new analysis by Siemens Financial Services has found that companies have picked up the pace of their investment activities in energy-efficient technology in an effort to cut energy usage and cost. A survey conducted in 2010 by the Organization for Economic Co-operation and Development (OECD) on business energy consumption in its member countries (e.g. France, Spain, India, USA, Russia, Poland, UK, Germany) confirms this trend: 96% of participating (large) businesses indicated that they had started implementing energy-saving measures. Moreover, when asked about their motivations to reduce energy consumption, respondents cited “reduce energy costs” as their most important driver.

Energy-saving potential in the industrial realm

To actually save energy and costs, businesses need an awareness of which key areas of their infrastructure are most susceptible to and have the greatest payback on energy-efficiency initiatives. The SFS-study has identified several areas where major energy-reduction can be achieved.

Saving energy with renewables

Businesses can save energy when relying on renewable energy. One efficient way is to install biomass production of space or process heating. In fact, biomass heating is becoming increasingly popular amongst manufacturing, processing and agricultural organizations. Organic materials, including virgin wood, energy crops and uncontaminated industrial residues are put through a combustion process to heat water or air. The system will consist of a biomass boiler plant, a heat transfer network and a method of receiving, storing and feeding fuel to the boiler. Biomass boilers work best when they run continuously. Broadly speaking, the longer the annual run hours, the more cost effective the system will be. Typical payback periods are three to nine years. Nevertheless, fuel costs are effectively zero if the business produces a combustible by-product.

Major savings can also be realized when businesses start relying on onsite solar and wind power. In fact, the business case for installing renewable energy technologies, such as solar panels or small scale wind turbines, is getting steadily stronger. Research by the Carbon Trust, a non-profit company set up by the UK government, suggests that annual return of over 10% can be gained from the installation of such onsite renewable energy systems. The increasing demand for smaller solar and wind power generation units is now beginning to industrialize their scale of production. As a result, we are starting to see a reduction in price per unit and improvement in manufacturing consistency.

Energy-efficient buildings and equipment

Building control plays an important role in industrial energy-efficiency. In fact, of all energy consumed, around 40% is used by buildings, whether offices, retail premises, warehouse operations or industrial factories. By deploying effective building controls, consumption can typically be reduced by up to 30%. Substantial savings also often result from an expert review of existing building controls.

What’s more, introducing better technology in heating, ventilation or air condition can be a very effective way to save energy, as HVAC is one of the chief consumers of power in the industrial context.

Power management solutions support energy-efficiency 

Using intelligent power management solutions can be another way towards industrial energy-efficiency: by using such systems businesses can take advantage of lower tariff structures and incentive payments. As well as delivering substantial savings, power management solutions also tend to reduce maintenance and enhance the lifetime of equipment. Intelligent load management and utilizing of on-site generation can be used to provide a dynamic, real-time response to energy demand.

Another aspect is supply voltage optimization: Reaching an optimum supply voltage level can save between 5% and 15% in electricity consumption! In fact, most modern equipment is designed to operate at the standard European voltages of 400V/230V. However, facilities in some countries suffer from persistent over-voltages resulting in reduced efficiency, equipment failure and increased maintenance.

Finally, businesses should be aware that up to 80% of potential energy savings in an industrial plant can come from improved automation. If implemented correctly, automation can increase productivity, reduce downtime and minimize maintenance requirements – whilst simultaneously cutting energy consumption and reducing carbon emissions.

Innovative financing methods in need

Having identified the most important areas of energy-saving potential is a first step towards greener and more energy-efficient businesses. However, the turn towards energy-efficiency still is a challenge, as it involves vast investment sums.

Businesses must therefore seek alternatives to standard bank credit: Innovative financing methods which offset the energy-efficient investment costs against energy savings across the financing term are new ways to finance such investments. Equipment financing arrangements or ‘performance contracting’ are two related methods which effectively provide a zero-net-cost investment technique.

After all, with an awareness of key areas for energy-reduction and innovative financing methods coming to the fore, business energy-efficiency now finally seems to be feasible.

Post by Roland W. Chalons-Browne



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