#5. How to reduce energy cost when CAPEX is limited

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#5. How to reduce energy cost when CAPEX is limited

What first comes to mind when somebody says ‘energy cost reduction’? Bust Global Adjustment, install LED lighting, VFD, high efficiency compressor/boiler/motor/fan/etc.

These are all CAPEX-intense measures. How can a manufacturing plant save on energy with limited CAPEX?

A lot can be achieved for both energy cost reduction and energy use reduction. These are not the same, btw. Electricity bill can be lowered with the same or even higher amount of energy consumed. The reason is that energy bill has two manageable parts – cost of energy (GA and per kWh charge) and cost of demand (per kW/kVA charge). These parts can be managed separately.

Cut peak demand with no CAPEX

Demand reduction can be achieved without energy use reduction, sometimes even with energy use increase.

To find if your peak demand significantly exceeds your average level – perform Demand profile analysis. If this difference is significant, than it makes sense to find what loads set peak demand each month and assess if some of these loads can be shifted to earlier/later time. Shift may cause energy use increase, but the total cost will be lowered.

A classic example of peak demand reduction opportunity is motors starting at the beginning of the shift: starting current (inrush) can be 6-7x higher than operating current. Several big motors started at the same time routinely set peak demand for the month with no need. A proper solution here is to install a soft start for big motors, which requires investment. A no-fixed-cost solution is to time starts of motors by setting a turn-on schedule. In the extreme case this can be done even manually. Some adjustment of standard operational procedures may be required.

energy efficiency with no capex

A 100kW reduction of peak demand will shave off about $10,000 per year for an Ontario Class B customer. If this does not seem significant – picture this number on your bonus cheque.

If this is still insignificant – would you cut a $10K cheque for me, please?

Reduce energy use with no CAPEX

Several no-cost measures will help you reduce energy use without affecting operation.

  • Turn machines off when they are not needed

Machines are routinely left running because energy is invisible. Energy procurement is done by production floor personnel, not by CFOs: procurement effectively happens when switch is turned, not when contract is signed.

Unnecessary idling is common

  • Use machines right

Machines are routinely run at inefficient operational conditions: compressors compress beyond the necessary pressure, boiler overheat, fan over ventilate, coolers over cool, freezers over freeze, and so on.

Solution here is to ensure that set points are set at levels actually required by operation, establish weekend setbacks and no-production operation schedules.

At one refrigeration plant we helped optimize we found that both compressors were set to start at the same suction pressure. That caused second compressor to come online randomly, with no need. A simple correction of settings saved company an estimated 110,000 kWh per year.

  • Cut energy waste – leaks, idling and misuse

A lot of energy is wasted through leaks of compressed air, steam, water. For example, if compressed air leaks are not continuously managed, a typical leak level is 30%. How much does this cost for a 100hp compressor run 24*7 at 70% average load?

Unattended leaks on 100hp compressed air system cost over $20K pa: 100hp*0.75*70%*8760*30%*$0.15=$20,695.5

These are only a few energy cost reduction opportunities that can be found through a complex energy audit. In terms of bang for a buck, higher efficiency equipment is the last resource of energy cost reduction. Implementation and sustaining of these measures heavily relies on people. How to engage people?

Make energy savings directly benefit people involved

Some people are engaged merely by the idea of energy saving. Other people avoid extra work with no benefit. They need an incentive. A simple and proven solution here is to allocate portion of savings for discretional spending that directly benefits employees – work place improvements, parties, bonuses, days off.

Include ‘energy saving’ adder as a separate line on annual bonus.

We came across a company that allocated portion of saved energy cost to annual bonus as a separate line – ‘energy saving bonus’. More on this topic is here.

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