Where will energy efficiencies come from?
If the UK government pushes ahead with its commitment to a low-carbon economy that is in the interests of its citizens, it will necessitate a shift from fossil fuels to renewable or alternative energy sources. However, with nuclear projects being cancelled in the wake of the Fukushima crisis in 2011, and coal-fired power stations slated for decommissioning, the challenge is on to contain rampant growth in energy demand while identifying sustainable energy sources and developing workable carbon capture initiatives. But can the nation realistically turn down the dial on its energy consumption?
• Heavy industry – In order to lift our economy out of the doldrums, increasing pressure is being applied to the manufacturing sector to drive productivity and growth. But heavy, energy-dependent industries have a substantial base load requirement – increased output means increased inputs, so the likes of steel and cement works, chemical companies and industrial gas producers can’t physically elect to “do more with less”.
• Domestic consumers – At the other end of the spectrum, domestic consumers are being variously encouraged or exhorted to cut back on unnecessary energy consumption. Education has a part to play (and it’s anticipated that smart meter insight will be a compelling teacher). But the rising cost of fuel bills is already prompting householders to turn down the thermostat, turn off the lights and turn over a new leaf in their laundry habits. And with reduced Government incentives around feed-in tariffs, coupled with a lengthy payback period, solar panels remain out of affordable reach for many.
• Large enterprise – big corporations, such as offices and retailers, are already using sophisticated management systems to automate and control energy usage in heating, lighting and computing. For example, many supermarkets are already using analytical tools to optimise their energy bills by comparing stores’ power consumption and correlating it to metrics such as square footage, opening hours or sales.
• SMEs – It would appear that the only energy users with significant underexploited potential and motive to reduce overheads are small and medium-sized businesses. These enterprise have traditionally lacked the intelligent systems needed to automate and measure the impact of energy efficiency initiatives. However, following the UK smart meter roll-out to businesses as well as homes, it is anticipated that energy retailers will be able to use “big data” to profile organisations and benchmark their consumption against their peers in the sector. One of SAP’s energy customers is already doing this to great effect with a tablet-based application to help businesses identify efficiencies.
• Energy providers – for energy producers and retailers, digitisation is set to revolutionise power generation and distribution. Tools and platforms such as Complex Event Processing based on real-time “big data” could be used, for example, to trigger forward-buying by combining information on weather patterns with oil prices. Additionally, remote readings from meters could enable automatic monitoring throughout the value chain, and indicate risks such as leaks by calculating where outputs are lower than inputs.
On the face of it, economic growth and the reduction (or at least, restraint) of our national appetite for energy may seem to be at odds. But advances in real-time insight are accelerating progress towards smarter use of energy and better management of assets, which will hopefully keep the lights on over the national economy until such time as the innovation gaps in environmental technologies are plugged.
Michael: Very nice discussion! I'm not sure I agree that "...increased output means increased inputs, so the likes of steel and cement works, chemical companies and industrial gas producers can’t physically elect to “do more with less”.
In many cases, studies have found that industry wastes 30-55% of the inputs - admittedly much of that waste is in transport and distribution. However, there is still a significant opportunity to optimize energy use for industry, even the energy-intensive industries. Heck, steam leaks alone - an easy-to-fix problem - still pop up all the time and a culture of continuous improvement for energy is essential. In addition, given the recent economic environment, many of these companies have struggled with the fact that a certain amount of energy is required regardless of whether they're making one ton or 20 tons of product - and when market demand leans toward one ton, that energy bill can be a huge hit on overall margin.
Would love to discuss this with you at length; in the short-term, our energy solutions for industrial customers will be demonstrated at Sapphire Madrid - please see my recent blog posts for more information.
For the long term, distributed energy and other 'smart grid' innovations will help industrial customers participate more productively and actively in the overall energy picture, but there are multiple barriers to overcome, from security standards to communication protocols. I look forward to engaging with your team on this topic.
Hi Marcia, thanks so much for your input and perspective - its great to connect with new people and exchange views. I absolutely agree that companies and individuals could do a lot more to ensure where energy is being consumed - needs to be consumed and not wasted.
I guess one perspective I had was the actual load for heavy industry requires heavy reliable production sources - to replace much of the fossil mix we have in the UK (approx 42% of the current mix I believe). But I fully accept your point that reducing overall demand through better informed consumption will no doubt help.
Until we have dynamic "self healing" smart power networks that will ensure essential industries receive power as a priority to energize heavy equipment (furnaces, chemical plants, vehicle production plants, etc.) how can we ensure we don't have economic or safety issues? Or do we accept large industrials need to become energy self-sufficient to ensure their success?