6 Steps to Creating an Effective Energy Plan

Manufacturing and other plant operators—such as those who work in wastewater, water treatment and power generation—face the daily challenge of maintaining efficient operations. Manufacturing is the most energy-consuming market in the U.S. Recent data indicate a trend toward increasing energy prices for manufacturing processes. As the U.S. debates energy efficiency and carbon emissions, manufacturers will stand out as leaders in decreasing energy use and reducing carbon emissions. While the industry has made strides in curbing energy use, manufacturers should seek more sophisticated tools and changes in corporate behavior. Energy and sustainability planning play vital roles in manufacturers’ strategic growth forecasting.

Why Develop an Energy Plan?

An inconsistent energy philosophy presents a big challenge for plant operators. Identifying an appropriate method for implementing real projects involves complex, often time-consuming coordination between everyone in the plant’s corporate structure. Some manufacturing facilities—especially acquired facilities—have difficulty retroactively integrating individual energy projects in an existing strategic financial plan. Plants may have different policies and processes, and plant personnel may have a different understanding of energy sustainability planning.

How Does a Plant Begin to Plan?

A comprehensive energy plan provides a clear, concise road map for plant employees to follow. This plan sets guidelines for energy projects and eliminates redundant or conflicting measures. Data management within an energy plan is the best way to accurately forecast future needs, capital equipment cost avoidance and utility consumption. Commodity maximization, deferred maintenance savings and other easily missed opportunities can also be identified. A manufacturer should follow six key steps to develop an effective energy plan.

1. Identify new energy opportunities.

Manufacturers may turn to outside consultants when searching for new energy opportunities, or they may lean on local staff engineers. Consultants perform a non-biased analysis of energy consumption and provide the owner with energy-saving opportunities. An analysis will review the plant’s infrastructure, energy-consuming processes, corporate policy and personnel training. Several low-cost or no-cost initiatives—such as building commissioning, energy studies, more efficient technologies and reduced redundancies—can improve energy performance. Evaluating systems for efficiency and possible misuse should be a priority for plant owners and managers. Even the most energy-efficient systems can suffer from a lack of personnel training and inconsistent system monitoring and maintenance.

2. Improve data management.

A data management system is one of the greatest energy-saving assets at a plant owner’s disposal. A good analysis of energy use will pinpoint the sectors of the plant that consume the most energy. This data can guide decisions about energy project implementation. Effective data management helps plant managers pull from disparate systems and correlate seemingly unrelated information to find opportunities in resource management and commodity maximization. A thorough analysis of energy consumption drives an energy management plan with short, long and stretch goals and establishes a benchmark for the facility.

3. Broaden energy management awareness.

A plant manager should use the energy and sustainability management plan to define and sustain initiatives for energy consumption reduction. This road map also eases the implementation of total cost of ownership economics. Energy efficiency can become routine with consistent practice as outlined by the management plan. Effective training starts from the top down. For some manufacturers, broadening energy awareness means connecting with their local communities. Strong support for energy initiatives is critical for success. Everyone should understand the goals of the plan and how it affects them. All stakeholders must buy into the process.

4. Define benchmarks.

During the last 10 years, manufacturers have embraced energy efficiency as an important factor in the total cost of ownership. While manufacturers have enjoyed the energy-saving benefits of more efficient lighting, HVAC and pumping technologies, few have set benchmarks for their day-to-day operations and maintenance. Benchmarking sets a reference point for defining good energy performance, prioritizing efforts and providing critical insight into energy consumption per component. Benchmarking is an effective report card to help understand where the plant has been and where it needs to go.

5. Gather a team of experts.

Owners should challenge their plant personnel to develop energy management and sustainability plans that involve all levels of staff and management. Company leaders must embrace the energy sustainability goals as part of their business strategy. All employees can be a part of energy efficiency. The most successful energy management and sustainability plans combine a dedicated staff assigned to the energy program and external subject matter experts. These external experts work with plant staff as a team to develop a comprehensive goal for the energy plan. This goal should be in line with the corporate philosophy but should also challenge staff to stretch goals and go beyond basic savings. Once the company establishes energy conservation programs, managers should encourage employees to identify potential energy conservation opportunities. The financial implications of such a plan should be thoroughly analyzed and understood. A comprehensive energy management and sustainability plan will define goals for the plant’s savings to investment ratio (SIR). As the energy program improves, the SIR goal may decrease. Education and awareness create opportunities. Establishing a comprehensive energy management plan will also complement company environmental goals. Developing these strategies can create a successful partnership with local environmental groups. The energy plan offers plant owners a way to communicate their commitment to energy efficiency.

6. Implement the plan.

Several tools are available to measure and monitor sustainability goals. An energy management team may start with a phased project-focused approach. Areas with the most need may require more focus before moving to a comprehensive plan. The Energy Star guidelines are popular among manufacturers. Energy Star has the advantage of establishing a benchmark for measuring performance. Reassessments occur on an annual basis. Global manufacturers may want to consider implementing International Organization for Standardization (ISO) 50001, which has been accepted by the Global Superior Energy Performance (GSEP) partnership. ISO 50001, which uses an energy performance indicator (Enpi), provides organizations with a recognized framework for integrating energy performance into their management practices. ISO 50001 is an excellent way to guide policy for more efficient energy use. The U.S. Department of Energy offers Superior Energy Performance (SEP) certification to manufacturing plant owners who make energy sustainability management the highest priority. A facility must conform to ISO 50001 and any additional energy performance improvement and other requirements that have been codified under the American National Standards Institute/Management System for Energy 50021. The SEP offers silver, gold and platinum levels of certification. Silver requires 5 percent savings in three years, gold 10 percent and platinum 15 percent. Applicants may choose between the Energy Performance Pathway and the Mature Energy Pathway. Facilities attempting to maintain or expand their energy performance goals usually opt for the Mature Energy Pathway. A study performed by the DOE found some impressive results in plants that implemented SEP. Annual savings of $87,000 to $984,000 were realized using no-cost or low-cost operational measures. Energy costs were reduced by an average of 10 percent within 18 months of SEP implementation, and paybacks occurred within less than two years in facilities with energy costs of more than $1.5 million annually.

Becoming an Industry Leader

With creativity and collaboration, manufacturers can start developing an energy and sustainability program that will seamlessly fit into their strategic growth plans. Embracing this dynamic approach sooner rather than later may be the difference between becoming a stagnant and noncompetitive plant and operating as an industry leader.