Industrial Energy Optimization: Managing energy consumption for higher profitability

The Rockwell Automation strategy aligns energy consumption with energy demand. Rockwell_automation.pdf

There once was a time when large corporations viewed their brick-and-mortar offices and storefronts as the main strategic assets in their portfolios. Abiding by the real estate mantra of “location, location, location,” it seemed preposterous that a web site could become a major source of competitive advantage. Nonetheless, those who proactively established and maintained an online presence leapt ahead of their competition; and the slowest to react to the new reality did not survive.

A similar seismic shift is occurring related to industrial energy consumption. Traditionally, energy has been viewed as a cost, a bill to be paid and an expense to be controlled. Those who are ready for the future, however, have matured into a new perspective toward energy and are shifting their operations, especially their manufacturing, to capitalize on the full value of energy as a “raw material,” a resource that can be applied to grow and sustain their businesses into the future. Large and small companies alike will need to know exactly where that valuable energy is being used, to the point of tracking it as an ingredient in their recipes or a tangible component in the product assembly – and capturing it as a line item on the production Bill of Material (BOM), or other similar tracking methods, such as Giga Joules or BTUs per ton of product. Managing this information in real time gives them the means to manage it carefully in order to sustain a profitable business.

While electricity is a common example discussed in this paper, there are many different types of energy consumption in manufacturing. For example, a recent food manufacturing industry report from the U.S. Environmental Protection Agency highlights petroleum, natural gas, coal and renewables as common sources for which consumption is on the rise. Regardless of the type of energy being consumed and the purpose, manufacturers have an opportunity to change their behavior with regard to how they view energy consumption in their facilities.

This paper describes the current economic and regulatory drivers compelling manufacturers to view their energy resources as a path to strategic competitive advantage, and for transforming their perspectives to an internal view on how they can manage energy resources from within the plant. It also details a methodology that can help manufacturers shift their points of view from treating energy as an undifferentiated overhead cost to managing it at a finite level as a cost of producing specific products.