Throughout North America, businesses of all types and sizes are being squeezed by rapidly climbing energy prices. Some Canadian markets have seen their natural gas prices increase by a factor of four over the past year. Electricity prices are increasing and, in the case of Alberta the spot market price has been known to vary between $60/MWh and over $300/MWh in the same 24-hour period. Traditional methods of managing these utilities are still valid, but they are no longer sufficient for most industrial businesses to remain successful and competitive.
Energy management systems are now being used by many businesses to achieve dramatic cost savings. These systems use integrated hardware and software solutions to monitor, analyze and control energy use. Annual savings typically range from five to 30 percent of energy costs. System licensing costs vary, so the key is to select the right combination of features and functionality to provide an attractive return on investment. Typical payback on energy management systems is one year or less, and sometimes as low as a few months.
Goal Setting
To select the right energy management system, managers need to define their goals for the system. Is the goal to understand and manage energy use for one facility or a number of locations? Is it important to make better purchasing decisions or to control the use of energy at specific locations within the facilities, or both? Is there a need to forecast the impact of adding some new equipment, or planning a plant expansion? The answers to these types of questions will help define the configuration of the system.
Systems range from basic profiling to automated load shedding based on management set parameters, with a variety of configurations in between. The following sections identify some of the objectives energy managers often have and how systems can be used to help meet these objectives.
Management Objectives
Understand Energy Use Patterns
Five years ago most organizations used the information on their utility bill to review their energy use. The few printed lines on the month-end bill typically show the total energy used and the peak use during specific periods in the month. Appropriate rates are applied and, presto, the invoice is complete. Today, most managers recognize that they need more information - a great deal more data about when and where they
use energy to run their operation. Operating a business without an energy profile is like receiving raw materials without a packing slip.
The metering profile data is used to understand trends and recurring patterns, to determine which areas of the business are the largest users of energy, to measure results from energy reduction measures, to quickly aggregate data from multiple locations, and to identify cost saving opportunities.
In order to produce the energy and profile information the energy manager needs to obtain the metering data as recorded by his utility metering equipment. There are several ways in which this can be achieved depending on the types of meter installed, the type of meter communication available and the need to have historical data versus real time data. This profile data can be provided for virtually any time frame - for every day, hour, or minute depending upon the need. Where interval meters are installed the utility can often provide monthly historical data files. The energy manager can analyze these profiles by importing the data into a spreadsheet application. Energy management companies, such as E2MS Inc., provide automatic meter reading services where data is automatically read from interval meters, transmitted over dial-up phone lines, and stored on hosted computers. Energy managers then use the appropriate software to access and analyze the data through an Internet connection. The process of data collection is fully automatic with data being made available to the user each day, covering the previous day and all data recorded prior to that date.
Large energy users and those with a need to make decisions more frequently tend to want the data hourly or on a minute-by-minute basis. Where energy managers require real time data, in order to control energy use as it happens, meters can be equipped with pulse output signals, which represent energy use. These signals can be automatically monitored by computer equipment and, with the appropriate software, can be used to control facility loads in real time.
For example, one organization reviewed its energy profile data and noticed that their electricity use recorded at the main revenue utility meter didn’t change when they turned on their on-site generation. Further investigation revealed that the generating unit had been installed upstream of the utility meter and they had been paying the utility for the energy they generated on-site for several years. The user would not have made the discovery without reviewing its profile for each facility.
Whether Internet access or corporate network access is used to view the data, multiple users can get access to the data any time they want.
Identify Load Shifting Opportunities
Most organizations are able to realize some energy cost savings by either shifting a portion of their energy use from one time of day to another – usually from daytime peak rates to nighttime off-peak rates – or by reducing use during specific times.
The analytical tools included in most energy management systems allow users to identify these opportunities. Energy use can be pinpointed by building, department, or even by piece of equipment. The impact of moving an operation to a different time of day can be analyzed and the expected results quantified before the change is made. Management can then decide if the savings justify the change in operation.
For example, many foundries do as much of their melting as possible during the night, when rates are lowest. It costs much less to keep the metal in its molten state than it does to get it into that state in the first place, so the expensive melting operation is done when energy costs are lowest. This approach can be taken with many batch types of processes. A pulp mill, for example, used profile and analytical tools to make the decision to move one of its operations to a different shift. “We wanted to look at the electrical load we were using during the day, and shift part of it to nights and weekends,” says the plant’s electrical coordinator. Attempts to measure the mill’s electricity usage had yielded only approximate data. “We were in the general ballpark, but couldn't get exact numbers,” he adds. With the energy management system, engineers are able to precisely measure, monitor and analyze the facility’s energy consumption based on meter data. “We can look at the load profile — including duration curves and load-factor calculations — based on any time period.” Goals and results can be quantified and the quality of decision-making improves.
Identify Load Shedding Opportunities
Not all organizations are able to move discrete operations from one time of day to another, or to different days of the week. These businesses use the analytical tools in energy management systems to find opportunities to reduce loads, particularly peak loads, during peak billing periods. Data in some systems is configured to clearly show the time and location of peak energy use so the areas of greatest cost can be targeted for savings.
Load duration curves can also be used to isolate savings opportunities. Load duration graphs show the percent of time for which different levels of energy are used. For example, the data may show that the business increases its energy use by 10 percent for only two percent of the time. If they can find a way to manage this short period of time, they could realize a 10% reduction in demand charges.
Load shedding savings often come from reducing energy use during non-critical periods. A mining company reduced its energy use by close to 10 percent by shedding load in its surface operations. The mine’s employees use shower facilities and dry change rooms at the start and end of each shift. Clothes are left hanging in the change rooms to dry until they are needed for the next shift. By shedding load during periods when the change rooms are not in use the company has reduced cost with no impact on its operation or on the employees. The clothes are still dry when they are needed.
Manage the Energy Bill and Energy Expenses
Most successful energy management programs place the responsibility for managing energy costs with the people in the organization who can control the costs. To be successful, those people need the right information, which requires that costs be allocated by facility or department. Measuring energy use in units such as kWh or m3 is important, but it is equally important to attach dollars to those units. Costs can be allocated to any metering point in the system, so each facility manager or cost manager can see and manage their share of the energy bill. Action can be taken and improvements can be measured and monitored.
Energy costs can be allocated right down to the product level if desired. An auto parts manufacturer uses an energy management system to determine the cost per unit of production. This information helps them to understand their energy costs in meaningful terms and to understand the impact on operating margins when costs increase or decrease.
Organizations are also able to make business decisions about taking on additional work or expanding facilities. For example, based on the company’s rate structure, current energy rates and documented energy use patterns, a cold storage facility can calculate the cost of freezing a load of herring, a manufacturer can determine the cost of melting a quantity of metal or plastic, and a grocery store can know what they will spend if they install three more freezers. In these cases, and many others, managers can decide in advance if they want to take on the additional work, start the additional process, or expand the facilities as planned. They can accurately calculate the total energy cost and the impact on margins prior to making important decisions.
Financial managers can create a duplicate utility bill using some energy management systems. These duplicate bills are essentially ‘packing slips’ for the energy that businesses use. They provide a way to validate what was used and what should be paid for utilities.
Make Energy Purchasing Decisions
The one certainty in the world of energy deregulation is that buying decisions become more complex. Whether prices rise, fall, or remain stable, users of energy will be presented with many more options for how they buy energy. Evaluating these options can be a challenging process and the decisions made can put an organization at a competitive advantage or disadvantage, depending on the outcome.
Energy management systems that include tariff engines and data gathering tools in the same package can be used to carefully evaluate alternatives. Different rate structures from different retailers can be compared using the company’s actual energy use patterns. Companies operating in complex deregulated environments will want to look for systems that include real time price feeds from the Independent Market or System Operator (IMO or ISO), and the ability to input different purchasing models including block purchases during on and off peak periods
Make Frequent or Real Time Energy Use Decisions
More and more businesses are choosing to configure their energy management system to control total facility energy use, often in real time. Organizations that see peaks and valleys on their energy profile, or deal with frequent price changes or can benefit from making frequent decisions about changing their use or using on-site generation facilities should consider real time management systems.
These systems can be configured to analyze the data and provide warning signals or take corrective action much more effectively and at a lower total cost than is the case if these processes are managed manually. Most organizations can’t afford to have a person watch energy prices change from hour to hour, or visually monitor equipment to look for sudden increases in energy use. Systems can be set to automatically manage these tasks based on criteria set by the area managers.
Sophisticated energy management systems such as the ECAM system from E2MS, can manage energy use by automatically adjusting energy loads on individual pieces of equipment. Loads are adjusted based on targets set by plant operations and management personnel. The management-set parameters can be adjusted as frequently as required, but most users only make changes once or twice per year. Because they are integrated with plant operations, load management systems typically yield the highest percentage of cost savings of all types of energy management systems – as high as 30 percent in some cases.
Given the recent upheaval in energy markets, energy management systems are a managerial tool that must be considered as part of any complete energy management strategy. The important decision is to define the business need and configure the system accordingly.
About E2MS
An energy management pioneer, E2MS Inc. is a technology leader in energy management and control systems. Over the past 15 years, systems from E2MS have helped companies lower energy costs by as much as 30 percent. Satisfied customers include Dofasco, Quaker Oats, Ford Motor Company, Abitibi Consolidated, Alcoa Wheel Products, and many others.
Energy management systems are now being used by many businesses to achieve dramatic cost savings. These systems use integrated hardware and software solutions to monitor, analyze and control energy use. Annual savings typically range from five to 30 percent of energy costs. System licensing costs vary, so the key is to select the right combination of features and functionality to provide an attractive return on investment. Typical payback on energy management systems is one year or less, and sometimes as low as a few months.
Goal Setting
To select the right energy management system, managers need to define their goals for the system. Is the goal to understand and manage energy use for one facility or a number of locations? Is it important to make better purchasing decisions or to control the use of energy at specific locations within the facilities, or both? Is there a need to forecast the impact of adding some new equipment, or planning a plant expansion? The answers to these types of questions will help define the configuration of the system.
Systems range from basic profiling to automated load shedding based on management set parameters, with a variety of configurations in between. The following sections identify some of the objectives energy managers often have and how systems can be used to help meet these objectives.
Management Objectives
Understand Energy Use Patterns
Five years ago most organizations used the information on their utility bill to review their energy use. The few printed lines on the month-end bill typically show the total energy used and the peak use during specific periods in the month. Appropriate rates are applied and, presto, the invoice is complete. Today, most managers recognize that they need more information - a great deal more data about when and where they
use energy to run their operation. Operating a business without an energy profile is like receiving raw materials without a packing slip.
The metering profile data is used to understand trends and recurring patterns, to determine which areas of the business are the largest users of energy, to measure results from energy reduction measures, to quickly aggregate data from multiple locations, and to identify cost saving opportunities.
In order to produce the energy and profile information the energy manager needs to obtain the metering data as recorded by his utility metering equipment. There are several ways in which this can be achieved depending on the types of meter installed, the type of meter communication available and the need to have historical data versus real time data. This profile data can be provided for virtually any time frame - for every day, hour, or minute depending upon the need. Where interval meters are installed the utility can often provide monthly historical data files. The energy manager can analyze these profiles by importing the data into a spreadsheet application. Energy management companies, such as E2MS Inc., provide automatic meter reading services where data is automatically read from interval meters, transmitted over dial-up phone lines, and stored on hosted computers. Energy managers then use the appropriate software to access and analyze the data through an Internet connection. The process of data collection is fully automatic with data being made available to the user each day, covering the previous day and all data recorded prior to that date.
Large energy users and those with a need to make decisions more frequently tend to want the data hourly or on a minute-by-minute basis. Where energy managers require real time data, in order to control energy use as it happens, meters can be equipped with pulse output signals, which represent energy use. These signals can be automatically monitored by computer equipment and, with the appropriate software, can be used to control facility loads in real time.
For example, one organization reviewed its energy profile data and noticed that their electricity use recorded at the main revenue utility meter didn’t change when they turned on their on-site generation. Further investigation revealed that the generating unit had been installed upstream of the utility meter and they had been paying the utility for the energy they generated on-site for several years. The user would not have made the discovery without reviewing its profile for each facility.
Whether Internet access or corporate network access is used to view the data, multiple users can get access to the data any time they want.
Identify Load Shifting Opportunities
Most organizations are able to realize some energy cost savings by either shifting a portion of their energy use from one time of day to another – usually from daytime peak rates to nighttime off-peak rates – or by reducing use during specific times.
The analytical tools included in most energy management systems allow users to identify these opportunities. Energy use can be pinpointed by building, department, or even by piece of equipment. The impact of moving an operation to a different time of day can be analyzed and the expected results quantified before the change is made. Management can then decide if the savings justify the change in operation.
For example, many foundries do as much of their melting as possible during the night, when rates are lowest. It costs much less to keep the metal in its molten state than it does to get it into that state in the first place, so the expensive melting operation is done when energy costs are lowest. This approach can be taken with many batch types of processes. A pulp mill, for example, used profile and analytical tools to make the decision to move one of its operations to a different shift. “We wanted to look at the electrical load we were using during the day, and shift part of it to nights and weekends,” says the plant’s electrical coordinator. Attempts to measure the mill’s electricity usage had yielded only approximate data. “We were in the general ballpark, but couldn't get exact numbers,” he adds. With the energy management system, engineers are able to precisely measure, monitor and analyze the facility’s energy consumption based on meter data. “We can look at the load profile — including duration curves and load-factor calculations — based on any time period.” Goals and results can be quantified and the quality of decision-making improves.
Identify Load Shedding Opportunities
Not all organizations are able to move discrete operations from one time of day to another, or to different days of the week. These businesses use the analytical tools in energy management systems to find opportunities to reduce loads, particularly peak loads, during peak billing periods. Data in some systems is configured to clearly show the time and location of peak energy use so the areas of greatest cost can be targeted for savings.
Load duration curves can also be used to isolate savings opportunities. Load duration graphs show the percent of time for which different levels of energy are used. For example, the data may show that the business increases its energy use by 10 percent for only two percent of the time. If they can find a way to manage this short period of time, they could realize a 10% reduction in demand charges.
Load shedding savings often come from reducing energy use during non-critical periods. A mining company reduced its energy use by close to 10 percent by shedding load in its surface operations. The mine’s employees use shower facilities and dry change rooms at the start and end of each shift. Clothes are left hanging in the change rooms to dry until they are needed for the next shift. By shedding load during periods when the change rooms are not in use the company has reduced cost with no impact on its operation or on the employees. The clothes are still dry when they are needed.
Manage the Energy Bill and Energy Expenses
Most successful energy management programs place the responsibility for managing energy costs with the people in the organization who can control the costs. To be successful, those people need the right information, which requires that costs be allocated by facility or department. Measuring energy use in units such as kWh or m3 is important, but it is equally important to attach dollars to those units. Costs can be allocated to any metering point in the system, so each facility manager or cost manager can see and manage their share of the energy bill. Action can be taken and improvements can be measured and monitored.
Energy costs can be allocated right down to the product level if desired. An auto parts manufacturer uses an energy management system to determine the cost per unit of production. This information helps them to understand their energy costs in meaningful terms and to understand the impact on operating margins when costs increase or decrease.
Organizations are also able to make business decisions about taking on additional work or expanding facilities. For example, based on the company’s rate structure, current energy rates and documented energy use patterns, a cold storage facility can calculate the cost of freezing a load of herring, a manufacturer can determine the cost of melting a quantity of metal or plastic, and a grocery store can know what they will spend if they install three more freezers. In these cases, and many others, managers can decide in advance if they want to take on the additional work, start the additional process, or expand the facilities as planned. They can accurately calculate the total energy cost and the impact on margins prior to making important decisions.
Financial managers can create a duplicate utility bill using some energy management systems. These duplicate bills are essentially ‘packing slips’ for the energy that businesses use. They provide a way to validate what was used and what should be paid for utilities.
Make Energy Purchasing Decisions
The one certainty in the world of energy deregulation is that buying decisions become more complex. Whether prices rise, fall, or remain stable, users of energy will be presented with many more options for how they buy energy. Evaluating these options can be a challenging process and the decisions made can put an organization at a competitive advantage or disadvantage, depending on the outcome.
Energy management systems that include tariff engines and data gathering tools in the same package can be used to carefully evaluate alternatives. Different rate structures from different retailers can be compared using the company’s actual energy use patterns. Companies operating in complex deregulated environments will want to look for systems that include real time price feeds from the Independent Market or System Operator (IMO or ISO), and the ability to input different purchasing models including block purchases during on and off peak periods
Make Frequent or Real Time Energy Use Decisions
More and more businesses are choosing to configure their energy management system to control total facility energy use, often in real time. Organizations that see peaks and valleys on their energy profile, or deal with frequent price changes or can benefit from making frequent decisions about changing their use or using on-site generation facilities should consider real time management systems.
These systems can be configured to analyze the data and provide warning signals or take corrective action much more effectively and at a lower total cost than is the case if these processes are managed manually. Most organizations can’t afford to have a person watch energy prices change from hour to hour, or visually monitor equipment to look for sudden increases in energy use. Systems can be set to automatically manage these tasks based on criteria set by the area managers.
Sophisticated energy management systems such as the ECAM system from E2MS, can manage energy use by automatically adjusting energy loads on individual pieces of equipment. Loads are adjusted based on targets set by plant operations and management personnel. The management-set parameters can be adjusted as frequently as required, but most users only make changes once or twice per year. Because they are integrated with plant operations, load management systems typically yield the highest percentage of cost savings of all types of energy management systems – as high as 30 percent in some cases.
Given the recent upheaval in energy markets, energy management systems are a managerial tool that must be considered as part of any complete energy management strategy. The important decision is to define the business need and configure the system accordingly.
This article was contributed by Terry Baskin, Director of Marketing at E2MS Inc.
1-800-565-3226,
www.e2ms.com.
About E2MS
An energy management pioneer, E2MS Inc. is a technology leader in energy management and control systems. Over the past 15 years, systems from E2MS have helped companies lower energy costs by as much as 30 percent. Satisfied customers include Dofasco, Quaker Oats, Ford Motor Company, Abitibi Consolidated, Alcoa Wheel Products, and many others.
