Category Archives: Energy Management

The four levels of sustainability

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Many people are familiar with the four stages of competence as described by Steven Covey and others. As companies develop their energy management and sustainability programs they go through similar levels.

Level 1 – Unconscious Incompetence – These are the companies that just don’t get it. Management sees no payback in sustainable programs, so any interest by employees in this area is quickly extinguished. They don’t see the point to industry or government regulations and will often try to circumvent even the most basic of regulations. They’ll often have comments like “energy management/sustainability doesn’t apply or doesn’t matter to our business”.

Level 2 – Conscious Incompetence – At this stage management still isn’t sure that there is a payback to sustainable practices, but they’ll let interested employees develop programs and take some steps, as long as they don’t have to spend money and it doesn’t take too much time. Any green initiatives are usually started by individual employees who are passionate about the topic and are willing to put their own time and effort into promoting it. While they meet government standards and regulations, they’ll only meet minimum standards.

At this level companies will be doing things like replacing their lights (but only if it is paid for by government subsidies), putting up posters to promote energy savings, having brown bag lunches and other  “feel good” activities. Programs are heavy on clichés without any in-depth understanding of the issues. If the employees that started the programs leave, the programs will likely not continue.

The approach at this level is tactical (see our other blog Energy Management – Is a Tactical or Strategic Approach Best For You?), the belief that technology alone can make a difference. Savings due to green initiatives are often hard to prove and will often diminish with time.

Common comments heard from these companies are “you can do a lot without spending money”, “little things make a big difference” and “it’s hard to get people to change”.

Level 3 – Conscious Competence – Management is supportive of sustainable programs at this level and are willing to spend money and time, but results do have to have a return on investment. In larger companies there will be employees whose job description includes energy management or sustainability, and they might be as high up as middle management. Green Teams will be prominent and actually have some influence over how things are done. Programs are driven by policy, not individuals, so they will continue even if individuals leave the company. Senior managers may have goals related to energy efficiency or sustainability written into their annual objectives.

A deeper understanding of the issues is evident and companies are implementing systematic procedures and implementing software to identify baseline activities as well as develop long-term plans for identifying energy savings and other sustainable issues. Carbon tracking software is used in smaller companies while larger firms are implementing EMIS (Energy Management Information Systems) or M&T (Monitoring & Targeting Software) to identify trends, prioritize spending and maintain increased gains over time.

The approach at this level is strategic, and it is understood that behavioural changes are the key to long-term success and planning.

Level 4 – Unconscious Competence – The progression from tactical to behavioural continues, at this level sustainability is ingrained as a cultural issue. Everything from the company’s products to it’s buildings and offices are developed with energy management and sustainability being primary considerations in all decisions. Management wholeheartedly supports, promotes and leads by example in all areas of sustainability, and there will be someone at the “C” level whose primary function is in this area. Most if not all employees will have annual sustainability goals in their annual objectives.

They’ll often ignore government regulations because they feel that they set the bar too low!

Probably the best known example of a company at his level is Interface, Inc. and their CEO, Ray Anderson. They changed everything including their products and manufacturing processes to further their goals of sustainability. They’re also profitable and set a high standard for others to follow.

Unfortunately most companies never rise above Level 2. Where do you think your company stands?

Energy Management – Is a Tactical or Strategic Approach Best For You?

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Energy never used to be a problem. For industrial or manufacturing companies it may have been a major cost, but it was relatively stable and seldom a concern.

That has changed dramatically. Costs are changing all the time, with electricity costs in Ontario slated to be the highest in North America in the next few years, gas and oil are bouncing near record highs, natural gas costs are actually going down, but who knows for how long. Your customers are greening their supply chains and expect you to prove that you are green and getting greener. Utilities are being forced to reduce consumption and expect you to help them. The media is quick to jump on any “dirty” industries that aren’t seen to be doing their part to improve the environment. Even investors want to see quantified energy savings as they fear exposure to potential liabilities.

For these and many other reasons developing an energy management strategy has become a priority for many companies. Whether by plan or by accident, most strategies fall into two main types that I’ll call tactical and strategic. It isn’t a case of one being better than the other, more of what fits better with your goals.

In a tactical approach, the big question is what can I do now to reduce energy use? The usual first step is to have an energy audit performed on your facility. This will identify sources of waste and offer recommendations which most frequently relate to upgrading lighting, HVAC or compressed air systems. These are one time upgrades that are likely covered by a grant through the OPA or other agency, and once they’re done there is no further action. For something like a warehouse/distribution centre, office or light manufacturing facility this might be as much as can be done without making modifications to the building, which can be expensive or just not possible if you don’t own your space.

While the savings can be significant with a tactical approach and you can claim “green” points, there is no long term plan put into place. Behaviours don’t change, there are no ongoing goals or targets to encourage further energy conservation. And if your facility has a complex energy profile with many energy consuming items, it can be difficult to prioritize or see the results of any changes that are made. (See  How an M&T System Can Reduce Equipment Operating Costs)

With a strategic approach, results over a longer time are key. In this case the question is more likely to take the form of how can I reduce my energy use by 10% each and every year? A long term goal which has senior management support and is incorporated into employee annual performance goals can be very powerful. It creates an atmosphere that supports a culture of energy conservation and behaviour change, which has proven to be a far more effective tool than technological changes alone. While the same tools are used as with a tactical approach, the emphasis is on continuous improvement, not just one-time upgrades. Energy conservation becomes a “participation sport”!

Those who are familiar with Lean Manufacturing will see the similarities in approach. An emphasis on continuous improvement and the journey are key.

The best tool to help implement a strategic energy management plan is an Energy Management Information System (EMIS) using Utility Monitoring and Targeting (M&T) software with modeling capability. It allows you to develop benchmarks to identify and quantify current energy usage. By developing models based on production data, weather or any other energy drivers unique to your situation you can track and quantify performance over time as energy management plans are put into place. The cost benefits of changes in activity or capital investments can be quantified before any investments are made so projects can be prioritized to get the best returns. Once implemented, energy savings can be compared to expected results to ensure equipment is working as promised or if additional work or even refunds are necessary. All stake holders both within the company and externally can be shown actual quantifiable and ongoing results to foster confidence in the plan and encourage additional conservation activities.

Whether you take a tactical or strategic approach to energy management depends on your specific circumstances and goals, but “business as usual” is no longer an option when it comes to energy!

How a Monitoring and Targeting System Can Reduce Equipment Operating Costs

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When the recession hit the automotive industry a few years ago, an Ontario based  supplier of highly engineered sintered metal parts used in automotive power trains faced a  major challenge. They had to cut back to a five day production week, but didn’t know the most efficient way to operate their furnaces. Should they be shutdown completely over the weekend or idle at full or setback temperature? The natural gas fired furnaces were difficult to restart and bring back up to operating temperature, would the gas savings justify the extra work?

While equipment manufacturers are great at designing equipment, they have little experience with operating machinery under production conditions, and they almost never address energy efficiency so there were no written procedures available.

Utility consumption reports were of little use, they weren’t current and only monitored the mainline coming into the plant. Trying to manage energy with historical consumption reports is like driving a car by only looking in the rear-view mirror – you know where you’ve been, but have no way of planning ahead. As the Operations Manager said, “when we made operating changes, the impact was lost in the whole scope of the factory”.

The solution was to install an Energy Monitoring and Targeting system, also known as EM&T, M&T or EMIS, Energy Management Information System. The M&T system provided vastly improved insight into the operation of the equipment. First, by adding sub-meters to each line, managers were able to view energy use in real time through their web-browsers, giving operators and managers immediate feedback on changes to the line.

Next, energy models were developed by identifying the key drivers that affected each line, such as throughput rates, temperature settings and even the outside weather. By comparing energy use against the models in real time, managers were able to see the effects of changes to the line, and how they varied against the model. They could develop “what-if” scenarios of different operating and shut-down procedures to optimize energy performance.

The end result? By optimizing their operating and shutdown procedures, the company reduced energy costs by $240,000 per year, without any additional capital expenditures. They also found that one of their two “identical” furnaces actually used 10% less gas than the other, which became a key factor in planning production.

With the M&T system in place, the Operations Manager said “we have precise information on how much energy we’re using in different parts of our processes and we can see changes instantly – both positive and negative. And anybody can use it. For instance, the people in charge of the furnaces can check for themselves. It gets the information to the people who need it – those running vital operations.”

To find out how Energy Monitoring and Targeting can help you reduce costs and develop a long-term energy management plan, contact us at sales@SmartSystemInnovations.com.