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Schneider Electric presents six ways energy efficiency translates into a better bottom line. By Urvil Modi, VP, Industrial Automation Business, Schneider Electric Singapore, Malaysia & Brunei.

When most business owners think of energy efficiency, they tend to drift towards eco-friendly benefits such as sustainability and reduced carbon footprint. While these are very important factors to consider, energy efficiency can also provide significant economic benefits.

Energy has a significant impact on the bottom line and is often the single largest expense for most commercial buildings. According to a report by the Building & Construction Authority (BCA), industrial facilities in Singapore require about 255kWh of energy per square meter a year. This translates to roughly SGD$53 per square meter a year.

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Armed with this information, it becomes obvious that businesses need to improve their energy efficiency if they want to stay competitive. At the end of the day it is all about the numbers and there should be no doubt when we look at the potential returns.

According to a study by the U.S. Department of Energy and Lawrence Berkley Laboratory, by tracking and analysing energy, companies can improve their efficiency and reduce their energy costs by as much as 12% within 15 months, while overall energy performance improves from 5.6% to 30.6% over three years. Facilities that have more than a $2 million annual energy spend can expect returns in less than 1.5 years.

So how exactly does energy efficiency translate into a better bottom line?

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1.Monitor your energy consumption to make data driven decisions

By understanding how your factory is consuming energy, you will be able to identify areas that can be optimised to use less energy while maintaining performance levels.

You will need to install sensors throughout your factory which will provide real time updates on energy consumption and more. The data collected from those sensors will provide valuable insights.

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One example would be cooling units that are required in data centres. By monitoring the energy consumption levels of an air-conditioning unit, we can predict the amount of cooling that it provides. We can then shift the units around into an optimal configuration thus reducing energy costs.

While the installation of those sensors can be a daunting task, products such as Schneider Electric’s PowerTag which can be installed into existing power panels and will collect data directly from the circuitry in real time.

 

2. Quantify the cost of energy needed for production

An often-overlooked cost of producing goods in a factory is the amount of energy that is required to produce a single unit. Traditionally, businesses would just average out the energy cost of the whole factory across and accept that as a sunk cost.

READ: Industrial Plant Sustainability And Profitability In The New Digital Economy

However, once you know how much energy is being consumed by every single machine in your factory, you can accurately calculate the energy cost required to produce a single product. Businesses can then use that information to price their products accurately.

 

3. Develop a predictive maintenance schedule

Unexpected downtime due to faulty machines can be a huge cost to factories. To combat this, most businesses develop a maintenance schedule based on rough estimates of machine lifecycles provided by the suppliers.

However, by monitoring energy consumption levels, we can develop a data driven strategy based on real time information

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 A good indicator of machines that are reaching the tail end of their lifecycle is a sudden spike in energy consumption. Armed with this knowledge, you can create a preventive maintenance plan which will not only reduce your overall energy consumption but also help ensure business continuity.

This will also increase the responsiveness of your maintenance team as they can be alerted if there are any abnormalities throughout your factory in real time.

 

4. Optimising your motor systems with IoT

Most factories will run largely on motor drive systems which can consume up to 40% of energy in a typically building. These motor systems are traditionally monitored by an assigned individual or team and this causes a delay when making the required changes to the settings.

However, IoT based equipment such as a Variable Frequency Drive (VFD) can help to manage these motor drive systems by executing rapid adjustments based on the output required. This will help to reduce energy consumption by up to 40% and minimise wear and tear for the motors.

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One example would be water treatment facilities as they typically have a constant supply of water being pumped into a holding area. However, when the output starts to drop, supply pumps will need to match the output by reducing the amount of water pumped into the treatment facility.

An automated system that is monitoring the energy consumption of all the pumps can figure out the exact amount to reduce based on accurate data in real time.

 

5. Balancing cost and comfort

Ultimately, energy efficiency must be balanced with business continuity. We cannot simply turn off the air-conditioning whenever employees leave a room as there is a huge cost required to bring the room temperature back up to optimum levels.

The installation of various sensors will allow for automated monitoring solutions that can lower the temperature of the room to a pre-determined level that lowers overall energy consumption.

This is also a huge boon for factories that need to be kept running 24/7 as simply shutting things off is never an option. Instead we need to be focusing on solutions that allow us to reduce overall energy consumption which is only possible if we can monitor how energy is consumed.

 

6. Go the extra mile

While it is often a vital first step, understanding your factory’s energy consumption is only part of a much longer journey towards digital transformation.

Why not take it one step further?

Here at Schneider Electric, our smart factory in Batam, Indonesia, shows how digital transformation can help businesses make informed, data-driven decisions that bring about improved profitability, asset management performance and operational efficiency.

Together with a smarter productive workforce, we have also managed to ensure that our operations are secure, agile and environmentally sustainable.

 

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