Getting smarter with energy: what does this mean for manufacturers?

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UK manufacturers recently met with British Gas Business at EEF’s National Manufacturing Conference to discuss what getting smarter with energy could mean for their company’s performance.

It is clear that manufacturers are fast recognising that energy use is no longer simply about the bill arriving through the door. Increasingly, the value of more accurate data and the potential for additional energy management services is getting attention.  For many companies, smarter data from their operations present real opportunities for their businesses. The receipt of real-time information and an almost instant feedback of performance issues such as faulty equipment, or unusual energy consumption patterns can provide major benefits and savings. The better the data and insight, the greater the value, as it enables manufacturers to increasingly explore less conventional process changes, deliver operational improvements, as well as reduce energy bills.

One of the hidden costs of energy is ageing equipment and when machines start to fail. When machinery continues to work, without breaking down, firms often hesitate to replace or improve that machinery, resulting in trade-offs between older ‘reliable’ machinery, and investing in newer, more energy efficient machinery.  New business models are now moving away from traditional maintenance regimes and towards predictive maintenance to address issues before any major incidents, such as break downs. Therefore, maintaining machinery operating at optimal condition can result in significant savings.

It is also prudent to recognise the importance of advanced monitoring.

It is also prudent to recognise the importance of advanced monitoring. Companies are increasingly enhancing their monitoring regimes and realising significant benefits. For example, one company during an audit were assessing several large industrial pumps, and noticed that one pump had a higher efficiency than the others, but no indication as to the cause.  On closer investigation, it was found that a supplier had offered an experimental oil that had improved the efficiency of the pump. Had this change been monitored directly after the switch, the commercial benefit could have been realised much earlier.

The move towards ‘smart grids’ also present new opportunities for manufacturers in the next 20 years. With increasing focus on local energy needs, companies, particularly large energy users, could in the future serve the towns and communities they are located in. Whilst there are already new technology opportunities, such as electric cars (and buying/selling electricity for cars) and storage available now, the infrastructure is not widely available to make the most of this opportunity.

Many organisations can also face internal cultural challenges towards the adoption of new low carbon and renewable technologies.  Often policies stipulate a maximum payback period, which results in a bias towards smaller capital investments and shorter payback periods. Whilst it is clear that a number of firms are investing in new more efficient technologies, those directed specifically in energy tended to be lower down the lists, due to longer returns on investment, and this continues to serve as a barrier. However, with sustainability increasingly on the agenda for many companies, energy management opportunities are another way for manufacturing firms to fulfil this ambition.

It is clear that getting smarter with energy management not only impacts the size of the bill through the door, but can be part of a real cultural change that serves to unlock multiple commercial benefits for a business in the long-term. 

Author

Managing Director, British Gas Business

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