By now, most manufacturing managers fully understand the business case for conserving energy in the production process. However, many still struggle with finding the right energy-conservation strategies.
The biggest challenge continues to be striking the proper balance between the twin corporate mandates of cutting energy costs and meeting customer-focused metrics such as high product quality and on-time delivery.
The inherent need for precision when building products to specifications adds a level of complexity to the energy-management equation.
No matter what you’re making—an electronic circuit, a wooden piece of furniture, a plastic toy, or a massive piece of metal equipment—parameters such as the amount of time or the temperature at which each operation is performed are crucial to delivering products that customers are willing to buy. And maintaining those exact parameters requires the use of specific amounts of energy.
Manufacturers’ quest to be cost-efficient energy users has become even more complicated in recent years as utilities have instituted billing practices that penalize heavy energy consumers. These programs are especially harsh on those who consume large amounts of energy during times when demand on the power grid is highest, which historically has been right in the middle of most manufacturers’ workdays.
Importance of energy management
Navigant Research argues that efficient energy management will soon be as important as product quality in determining manufacturers’ competitive position within their respective industries. That importance, according to Navigant, is reflected in the compound annual growth rate for industrial energy management software and services.
At its current growth rate, the global market for industrial energy management solutions will nearly double over the next 7 years, going from $11.3 billion in 2013 to $22.4 billion in 2020, according to a recent Navigant study.
Naturally, the large industrial automation equipment suppliers, such as Rockwell Automation, Siemens, Invensys, and Schneider Electric, among others, will be major beneficiaries of this rapid growth. However, Navigant believes there are potential opportunities for other players as well.
For instance, major IT companies like IBM and SAP, with expertise in handling large data sets and sophisticated real-time business analytics, could make inroads, along with smaller niche players who are able to offer unique products and a special level of customer service.
When it comes to the niche players, Navigant argues that their ultimate success will be tied to their ability to link their unique solutions to the energy-management ecosystems already being built by the larger players.
Seattle-based Powerit Solutions fits Navigant’s profile of a smaller vendor that’s poised to prosper from the impending industrial energy management boom.
“Our technology is aimed at providing energy management solutions for industrial users,” Patty Solberg, product marketing director for Powerit Solutions, said in a recent interview.
Powerit offers software applications that address three aspects of industrial energy management:
- Peak-demand management
- Automated demand response
- Automated participation in real-time pricing programs.
Powerit has packaged its solutions in one software suite called Spara DM (Demand Manager).
Avoid pricing penalties
The peak-demand management application, called Spara Demand Control, helps companies avoid the pricing penalties associated with using large amounts of energy when there’s heavy demand on the power grid. And it does so without forcing users to lower production throughput, Solberg said.
“We have more than 180 installations of demand-management technology across North America, with a proven track record of reducing peak demand charges in industrial facilities anywhere from 10% to 30%,” she said. “That translates to a reduction in utility bills of 5% to 10% or more, depending on the size of the facility and its specific demand charges.”
Spara Demand Response, the second application in the Spara DM suite, equips companies to become active participants in a utility company’s demand-response program. Under a demand-response program, an industrial user can reap substantial financial benefits by agreeing to severely limit consumption during periods in which there’s extreme stress on the power grid.
The benefits can be discounts on energy bills, or they can be cash rebates if the user engages the services or a company that specializes in aggregating power and managing energy curtailment programs for groups of users.
It’s nearly impossible for manufacturers to achieve the full benefits of a demand-response program without the aid of sophisticated technology. That’s because these programs require users to reduce consumption whenever the utility announces a “demand-response” event.
While utilities, through their own use of technology, typically can predict when a demand-response event will occur, there are times when program participants get little advance warning of the need to cut power usage. Most utilities try to give users at least 24 hours to respond to a demand-response event. However, the reality is that as the world’s appetite for power grows, the instances of shorter notices—sometimes only a matter of minutes—are becoming more frequent. And those short notices can cause major problems for manufacturers who are trying to maintain production schedules while holding the line on energy costs.
That’s why manufacturers wishing to participate in demand-response programs need solutions like Spara Demand Response. The application allows for mapping energy consumption across an entire production network, providing the insight necessary to determine which operations can be idled to accommodate any demand-response event without jeopardizing critical production schedules.
Finally, Spara Dynamic Pricing helps companies make intelligent choices about cutting energy use if their utility operates a dynamic pricing program, which causes prices to change constantly based on market conditions. These programs typically offer users even less warning of price changes than they would get from a demand-response event. Under dynamic pricing, the price of energy could change multiple times in one day. However, companies that participate in these programs find them worthwhile because they can yield rate discounts of 20% to 40% when compared to traditional metered rates.
Spara Dynamic Pricing currently is the least used of Powerit’s three applications because utilities have been somewhat slow in rolling out dynamic pricing schedules. “Today, we’re seeing a lot of interest around demand control and automated demand response,” Solberg said.
Regardless of the specific applications being used, the setup and configuration of the Spara technology is the same.
There’s a connection to the facility’s utility meter, which allows for tracking the amount and cost of energy consumed. Then, in consultation with the plant’s manager, Powerit connects the system to various machines throughout the plant.
“We’re always connected to the utility meter,” Solberg explained. “That’s the baseline. We need to know the facility’s overall consumption because that’s what the utility bill is based on. Then we look at every machine that consumes energy to determine which loads it makes the most sense for us to control. We don’t always control just production loads. Sometimes we might control the office HVAC in order to offset a production peak.”
The implementation includes setting constraints within the Spara system so that any scheduled power shutdowns will be overridden if the system determines that action will disrupt a critical production run. Once configured, Spara functions like what Solberg describes as “an omniscient plant manager,” making real-time decisions on energy use that always strike the optimum balance between production performance and energy cost.
How the technology works
After the initial installation, Powerit will experiment by reducing loads on certain machines and then monitoring to see how that impacts both peak demand levels and production efficiency. If the effect is positive, those settings stay intact; otherwise, they are changed and monitored again.
The loads selected for initial monitoring vary by type of facility. However, in line with Navigant’s theory that small vendors must have special expertise, Powerit has established a strong presence among food and beverage manufacturers and metal foundries.
“We do have a lot of foundry customers,” Solberg said. “Metal-melting furnaces are common loads to control in those facilities.”
Foundries typically have multiple furnaces feeding various casting lines. Without a demand control solution in place, those furnaces operate independently of one another, and it’s not unusual for one or more of them to run longer than necessary, which means they are wasting large amounts of energy.
A demand-control application can, in effect, operate multiple furnaces as if they are a single unit. It allows a plant manager to easily determine which furnaces should be shut down, and for how long, to avoid peak demand charges while also protecting production schedules.
With Spara technology those decisions are made automatically, based on the constraints that are set during system implementation, Solberg said.
“Because you have multiple furnaces feeding a casting line, there will be some natural buffers built in,” she said. “If three furnaces are feeding a single casting line, you can power down the furnace that will be last to feed the line to avoid peak demand. Then, you can power that furnace up again in time for it to meet its schedule for feeding the line.”
Rochester Metal Products is among the foundries that have benefited from the use of the Spara DM platform.
Based in Rochester, Ind., Rochester Metals supplies products to customers in numerous industries, including manufacturers of air compressors, and medical, automotive, heavy construction, and marine equipment.
Rochester Metals adopted the Spara platform after learning that its utility was implementing a new peak-demand pricing structure. The system is connected to all furnaces used in Rochester’s melting process.
When the system recognizes a peak-demand period, it can immediately determine which furnace is not needed at that given moment, and it sheds load from that furnace first.
Same usage; much lower bill
Before adopting Spara DM, Rochester Metals’ typical monthly peak demand was 21,000 kW. After testing the system for a month at 18,000 kW, with no impact on production, the setpoint was adjusted to 17,000 kW. Again, there was no production loss, so the setpoint was moved to 16,000 kW, which is where it remains today with no production loss.
“In reality, the amount of kilowatt hours they’re using hasn’t changed,” Solberg said. “What’s changed is how, and when, they use those kilowatt hours. That has created a significant decrease in their utility bill.”
Powerit helps customers configure its applications to tap into its inherent intelligence for selecting the right loads to control for cost-efficient energy management. However, some users have made adjustments to their production processes to take further advantage of the technology.
“On the first pass, the savings we offer generally don’t involve touching the process flow,” Solberg said. “But the system does allow operators to see everything that’s going on in a plant from an energy consumption standpoint. That gives them the power to tweak things to really optimize energy usage.”
Early this year, Powerit introduced a cloud-based version of its platform that Solberg said will further enhance customers’ ability to analyze and optimize energy use.
The new solution, called Spara Hub, offers the typical benefits associated with cloud-based applications, such as faster deployment and streamlined maintenance. But the real advantage, according to Solberg, is “the additional functionality we can deliver as a hosted solution.”
Operating on a hosted platform will allow Powerit to develop one method for connecting its applications to utility networks as well as to the technology platforms of the larger industrial automation equipment suppliers.
“The platform lets us build standard connections to utilities and power aggregators for bringing pricing information back to our customers,” Solberg said. “We’re also partnering with major automation vendors to embed our software capabilities into their ecosystems."
Ultimately, Solberg believes having the Spara solution in the cloud will make it easier to show manufacturers the true value of an industrial energy management strategy.
"If a company has a metering system that shows their consumption patterns, they can redirect that data to our hosted platform, where we can do a quick analysis on their potential energy savings," she explained. "We can do that analysis without a hosted platform, but we would first have to install hardware at the customer's site and do a fair amount of engineering work to get the data we would need."
- Edited by Sidney Hill, Jr., a CFE Media contributing content specialist, firstname.lastname@example.org. This article is part of the Industrial Energy Management supplement for CFE Media publications.
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