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To generate or not to generate – a multi-million dollar question

In the view of growing electricity prices and time-sensitive tariffs numerous vendors around offer on-site electricity generation and storage. Should your company do it? Are you in business of electricity generation? Prior to going into technical and financial details of different power generation solutions, I suggest you ask yourself a strategic question: Are you [...]

What is kWh worth at your plant?

A trivial question, which does not have a simple answer without the context. Consider a plant that in the last month used 1,000,000 kWh to produce 10,000 units and paid $15,000 for electricity. Does kWh cost $0.15? Is energy cost per unit $1.5? Yes, No and Maybe. Cost or value of a kWh depends on [...]

How big is this steam leak?

Steam is one of the most expensive forms of energy at most manufacturing plants. Powerful boilers produce lots and lots of it. Surely a couple of small leaks cost next to nothing, right? Here is a simple way to assess what damage a leak makes to the bottom line. Idea of this post came from [...]

Energy cost forecast may cause CFO to resign

The Chief Financial Officer (CFO) of a friendly manufacturing company had to resign. He did not mess up his taxes. He did not miss a profitability goal. He was not hated by other executives for extravagant behaviors. Year after year, he just could not deliver a reliable cost forecast. His projections were not even consistently [...]

By | 2020-06-03T10:33:22-04:00 August 20th, 2014|Categories: Energy management|Tags: , , |1 Comment

What is the payback period for this energy efficiency project?

Another email (call, booklet) offers you an energy efficiency measure with a 12 months payback period. Can this be true? Assessing actual savings delivered by an energy efficiency measure only seems to be a straightforward job. To avoid disappointment after implementation manager must understand utility bill structure and tariff options. Use of [...]