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What is Industrial Energy Management? And where do I start?

As many of you may know, in today’s business environment, all manufacturers – large, medium, and small – are being confronted with the need to optimize energy consumption and improve operational efficiency.


While everyone wants to do “energy management”, many are not sure what exactly does that mean.


What is Energy Management

Energy Management is not yet another “management program”, but really on focusing your attention on the large use of resources and putting a program in place to be smart about reducing the usage.  Focusing attention means


#1 -Thinking more about energy and how we use, and

#2 -Have everyone on the team (not just the energy coordinator) thinking about energy


This thinking seems fairly obvious and intuitive.  It is also very much in line with other continuous improvement / six sigma project, aimed towards increasing operating effectiveness with the business.  However there are some external factors that also need to be taken into account around managing energy.


Increasing demand For the most part, at least within the US, energy is taken for as a granted resource.  You plug your equipment in and it powers up.  The concept that it might not power-up or if it does maybe very expensive to do so is only just taking root.  This “taking for granted” attitude needs to be changed especially when we see the increasing demand for energy both with a growing world population as well as the ravenous energy appetite of rapidly industrializing countries such as China, India, and Brazil.


Sustainability The impact of the business on the environment is rapidly gaining momentum.  Businesses need to be environmentally responsible – and with increasing regulations – voluntary or involuntary (such as being a supplier to Wal-Mart who will require certain environmental criteria of its suppliers).  For many industrial customers, carbon is energy or at least 90% of it, and energy management becomes an important corporate concern beyond the plat or manufacturing facility


Where do I start? 

What is clear is that having an effective energy management needs to move far beyond the high level energy sourcing and tracking prevalent today.

What is also clear is that energy management is a journey.  There are very few, if any, silver bullets that will “fix” your energy management issues once and for all.  In fact as a colleague of mine put it “Energy Management is akin to a death by million cuts”, it is a million small things that add up to a big change.  And the change can indeed be big!  The Department of Energy (DOE) estimates that common plant systems use about 80 percent of all industrial energy and it is possible to reduce energy use in these systems by 10-20 percent with a focused approach to managing energy.

Two things are paramount in getting started

#1 – Management support, especially on the operations side.  Having someone at the VP of Operations level involved can give a considerable start in making the program a success.  It helps to start with a pilot idea or opportunities that can help build momentum around energy.  Examples include focus on specific plant systems such as motors or compressed air.


#2 – Visibility to energy information.  You cannot manage what you cannot measure!


a) You can start with metering that measures your main meters along with additional meters in strategic areas within the plant.  Measuring your consumption and costs and making it visible, allows you to get the dialog started and keep it going.

b) Demonstrating the ability to aggregate information across your plant systems and across sites and business processes allows you to demonstrate progress to your management.  It also helps you get a seat at the table to get further support and importantly, budget for further investments in energy management.


Energy Management can be a key lever in operating effectiveness and spans a lot of business processes.  A well run and effective energy management program must have strong flows of information used by functional team members to view their energy use and costs make smarter decisions to make least costly, more profitable products.

Next time you think, does energy management apply to me?  It probably does, and you can make a difference by taking a few simple steps to start on the journey.

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