Why Does Industry Resist Energy Management?

Misperceptions surround not only the concept of energy management, but also its anticipated impact on daily job functions. Many corporate leaders genuinely believe that energy use is an uncontrollable cost of doing business, so they focus solely on energy prices. Then there are business leaders who truly believe that their facilities have already eliminated energy waste. This conclusion is often based on bad information, including different understandings of what constitutes “energy efficiency.” Some common misinterpretations include:
• installing a backup generator
• participation in a municipal recycling program
• switching fuels
• purchasing energy at the lowest available price or tariff
• purchasing energy through a non-utility marketer
• cutting back production or services to reduce energy consumption
• adopting renewable fuel sources, such as solar or wind power
• installing dual-fuel capabilities on boilers and other large energy-consuming assets

With misunderstanding comes resistance. Some plant personnel may believe that admitting the need for energy improvements is evidence of their ineffective job performance. Meanwhile, the larger and more complex an organization is, the easier it is for individuals to distort measures of their performance and to hide certain inefficiencies.

The pursuit of industrial energy management encounters some large hurdles. To a certain extent, industry consumes energy through large, fixed assets that operate for years or even decades at a time. This includes equipment such as boilers, furnaces and air compressors. In addition to these assets, most facilities operate complex production systems that employ a wide variety of smaller equipment such as pumps, fans and motors. Compared with the larger assets, these smaller components are more easily replaced. However, the design of the overall system in which they were installed is not as easy to change. Industries typically conduct multi-year planning cycles to organize major facility upgrades and system changes. Planning cycles allow facility managers to avoid frequent disruptions to their production schedules. These cycles take years to conduct and involve a number of considerations, including energy costs. This partially explains why many manufacturers do not respond immediately to proposed energy improvements, even if incentives are involved.

Human nature also plays a role in energy waste. “That’s the way we’ve always done it” is the justification for long-entrenched work habits that become default procedures. Certain habits that save time and effort may be at the expense of excess energy consumption. These practices had little consequence when energy was cheap. However, the trade-offs between time and money change as energy prices escalate. Attempts to change these work habits can cause friction among staff. A manufacturer’s decision to make energy improvements must compete with other priorities. Procurement officers are often compelled to make equipment purchases based on the lowest cost of acquisition, not the total cost of ownership. Production deadlines may force operations personnel to make emergency repairs using whatever equipment is available, as opposed to what is optimal from a total-cost-of-ownership perspective. Energy performance considerations are usually secondary to a plant manager’s need to meet production targets.

Industrial facilities that lack a clear energy cost-control mandate will allow waste to continue. Unfortunately, energy waste is an inexorable drain on earnings. This waste does not wait for people to figure out how to defeat it.