Table of Contents:
What is energy management?
Energy management is managing, monitoring and influencing the energy consumption of a company or building.
By mapping the energy flows and taking energy-saving measures, energy consumption is reduced.
After labor and material costs, energy costs are the third largest expense in the manufacturing industry. In some low-wage countries, energy consumption is even more expensive than labor costs.
Energy management is therefore important not only for environmental or regulatory reasons, but also for a company’s financial management.
Energy prices rose incredibly fast in 2021, and for the time being it is not expected that prices will fall. Due to the tensions between Russia and Ukraine, the price of gas rose to 540 pounds per megawatt hour on March 7, 2022.
In addition, regulations from the European Union are becoming increasingly stringent. Thus, it is increasingly important to implement energy management.
Why energy management?
There are many advantages to having good energy management. These are explained below.
Managing energy leads to a reduction in consumption and therefore in costs. The price of electricity has increased by 350% in one year. The price of gas has increased by 175%.
It is not expected that energy prices will fall quickly. Increasing global industrialization and geopolitical developments make the energy market extremely uncertain. Taxes on energy are increasing due to climate change.
Companies that practice energy management save on average about 15% on energy bills. There are even cases of a reduction of 30% or more. This can amount to savings of more than €100,000.
Due to climate change, not only are taxes on energy increasing. There are also more and more regulations being made to force companies to save energy.
Many medium-sized and large companies are obliged by these regulations to reduce their energy consumption.
Fit for 55 package
Recently, the European Commission presented the Fit For 55 package. This states that CO2 emissions must be reduced by 55% by 2030 compared to 1990. Therefore, it is expected that regulations will become even stricter.
Reduce CO2 emissions with energy management
Reducing energy consumption also reduces CO2 emissions. This is not directly reflected in higher profits or compliance with regulations, but it does enable your company to contribute to a more sustainable industry.
Corporate social responsibility
Finally, customers are finding it increasingly important for companies to take responsibility and pursue sustainable business practices. In 2020, 32% of customers said they engaged with adopting with a more sustainable lifestyle. This is only expected to increase in the future.
Energy costs as a huge expense for companies
Saving on energy costs can greatly increase the profits of companies. We demonstrate this using an example.
Company A sells product X of £100 with a profit margin of £10. The energy costs are £10 per product. It sells product X 10,000 times a year.
If the company succeeds in reducing energy costs by 15%, the result for the company’s profit is the same as if the number of sales were increased by 15%.
Sales up by 15%. Then the company sells 1500 more products: 11,500x£10=£115,000
Energy consumption down by 15%. Then the profit per product becomes £1.50 higher: 10,000x£11.50=£115,000
In both cases, the profit is increased by £15,000.
The above example shows what a huge impact reducing energy costs can have. It is often much easier to reduce energy consumption by 15% than to increase sales by 15%.
Benefits of energy management versus increasing sales
Reducing energy consumption through energy management rather than increasing sales has the following advantages:
- Your competitors do not affect your energy management;
- Energy management requires only internal actions;
- Energy management pays for itself within a year;
- Reducing energy consumption is sustainable and will only become more valuable in the future;
- Energy management contributes to customer satisfaction and your company’s PR.
For which companies is energy management interesting?
Energy management is mandatory for a part of the companies, but interesting for all companies with an energy bill of more than €1000 per month.
Energy management systems
Managing energy is not possible without an energy management system (EMS). Without an EMS, no data is available and no measures can be made transparent.
An EMS is a combination of hardware and software. With the Sensorfact energy management system, the hardware consists of sensors and bridges.
The sensors are clamped around the cables of your equipment. They send data about the energy consumption to the bridges. Through these bridges the data is sent to our software.
The Sensorfact EMS is sent to you and you can install it yourself without any downtime. This way you can start measuring your energy consumption right away.
Our EMS is very inexpensive. This means that you will have a very quick return on your investment in our product. Most of our customers earn back their investment within 1 year.
ISO 50001 and energy management
Sensorfact’s EMS is ISO 50001 certified. The ISO 50001 is an international standard for energy management systems. In the Netherlands the NEN is in charge of the ISO 50001 standard.
The certification has a number of important characteristics:
- The policy must show that there is a drive within the organization to improve the energy policy
- There are two different parts: energy consumption (the total purchase or production of energy) and energy use (the way this purchased energy is used, in different categories). An energy balance of both must be established.
- Baselines need to be established to measure energy use against.
- Energy KPIs need to be established to measure and monitor energy performance
- Identify how energy can be saved in any new processes, equipment or facilities
An energy management system must therefore meet these requirements in order to receive ISO 50001 certification.
Plan-do-check-act cycle and energy management
The plan-do-check-act cycle is central to energy management. It is continuously repeated. Continuous improvement (kaizen) is therefore central to the cycle.
The starting point of the cycle is that energy management is never ‘finished’. There are always new opportunities to reduce energy consumption.
In order to meet the ISO 50001 standards for an energy management system, the PDCA cycle must be applied.
In the Plan phase, the energy management policy is formulated and goals are set. These goals must be communicated within the organization.
In this phase, the plans are made concrete with measures. The tasks are divided and the necessary resources made available.
In the check phase, the goals are checked to see if they have indeed been achieved. The results are collected and it is checked whether the EMS is doing its job.
The results are analyzed and evaluated. If necessary, additional measures are taken in this phase. Then the plan phase begins again.
Energy Management: from data to information and concrete measures
Managing energy starts with energy monitoring. Without data, no savings opportunities can be identified. The energy consumption is mapped per device and per time unit.
In this way, it can be analyzed whether, for example, too much energy is consumed on weekends when the factory is closed. Sneaky consumption is made transparent and other factors that lead to energy being wasted also become clear.
Then the information from the data is used to take concrete measures. In this way, the potential for savings is defined.
Sensorfact offers the number one solution for energy management. With our energy management system and related advice, our customers save up to 15% on their energy bills.
We combine maximum savings on energy bills with maximum ease of use for you as a customer. Our sensors are sent to you and are easy to install without downtime. So you can start measuring right away.
After three months of data collection, we provide you with advice on savings opportunities. Our algorithms analyze the savings opportunities based on the collected data.
This does not only express the savings in energy, but also in Euros. Because we also make it clear what the savings should cost, the payback period becomes immediately clear.
You will receive a clear overview of these recommendations in a presentation by one of our energy experts, who will also help you implement them. We focus, for example, on eliminating standby power or reducing the cosine phi.
With the Sensorfact dashboard, you can easily view your energy consumption online, whenever you want. The dashboard is easy to use and makes changes in energy consumption quickly apparent.
Our total solution consists of hardware, software, data analysis and savings. Only looking for an easy way to receive data on your energy consumption? We also provide a Basic, “Insight” package.
A case study: energy management at Berry | PET Power
Berry | PET Power is one of more than 400 satisfied Sensorfact customers. After installing Sensorfact’s hardware and software, the company’s energy consumption was made transparent.
By installing sensors on four machines and providing energy advice, €28,000 was saved within four months. At Berry | PET Power, energy waste was dealt with in three steps.
First, the energy waste per shift was analyzed. Then, the potential savings of €28,000 were identified. Finally, by analyzing the energy flows, Berry | PET Power gained more influence on its operations.
Initially, sensors were installed on all machines. This way, the most important machines were mapped out.
These sensors measured data and provided insight. Our energy consultants then showed how this data could be used to gain insight into energy consumption.
This process led to data-driven insights, which indicated in which phases of production the most energy waste occurred. Based on these insights, the possible savings measures were mapped out.
All this led to a saving of €28,000 on an annual basis. Most savings were found in hydraulic pumps, dryers and cooling machines.