Energy Cost Control: Projects or Process?

Almost every discussion I have with people on the front lines of American industry focuses on the role of “projects” in controlling energy costs. By “projects,” I mean a new boiler, turbine, cooling tower, air compressor, or some other significant hardware installation, paid for through capital investment. The logic behind “projects” is straightforward: plug in this new black box, flick the switch, and get back to business-as-usual. The new hardware, we anticipate, will save energy for us.

What these projects fail to address, however, is the energy waste attributable to bad work habits, improper maintenance, and lack of best-practice training and discipline. In other words, the potential impact of expensive hardware is compromised if people don’t use it properly. There are a lot of black boxes out there on facility floors, by-passed and collecting dust because the people who could get the most from it have been reassigned, laid-off, or simply not held accountable for energy performance.

The project approach comes naturally to engineering-minded decision makers. This comment is not meant to detract from engineers—in fact, their skills remain central to the sustained reliability and efficiency of any production facility. We point here to a void in the discipline and accountability that characterize continuous energy improvement. Facility managers rightfully prioritize activities that make products and get them out the door. But this is too often at the expense of internal efficiencies (including energy consumption) that can potentially add to operating income. After all, a dollar saved is no less valuable than a dollar earned. People in operations, maintenance, procurement, and finance all play a role in the continuous process of energy cost control. It should not, and cannot, be a task addressed solely by the episodic engineering “project.”

Energy management involves benchmarking of energy use, goals for improvement, metrics for ongoing measurement, and accountability for getting things done. Why manage energy? Volatile fuel prices are only one reason. It’s also the fact that energy use is pervasive throughout a facility, at every stage of production. If you monitor energy use, you have a pulse on the tempo of activity throughout the facility. If you pursue energy management, you develop leadership that can be leveraged for managing raw materials, labor, production schedules and other activities. In sum, these are the pivotal elements of industrial competitiveness.