What does Enterprise Asset Management have to do with Energy Efficiency?
Some of the recent geopolitical events have raised the importance of energy independence to leaders of many countries and organizations. While finding new sources of energy, increasing renewable energy sources are important and require attention immediately, they are primarily a solution for the medium and long term. The only short term and sustainable solution is to reduce energy consumption by increasing energy efficiency at all levels – individual, asset, building and manufacturing operations level. In fact, one can argue that a unit of energy saved is higher in value than a unit of energy produced since a unit of energy saved usually comes at a lower cost and lower environmental impact.
Coming back to the title of this blog post, one of the best and cheapest ways to improve energy efficiency is to keep equipment operating in the most optimal and energy efficient zone. This is where Enterprise Asset Management and maintenance operations have a significant role to play.
Traditionally, maintenance operations have focused primarily on increasing uptime and ensuring operational safety. Energy efficiency has been to a certain extent a secondary concern. This can be justified as long as energy costs are not significant. It is, however, neither rational nor smart if organizations are leaving money on the table by not running operations in an energy efficient manner, especially when it can be done easily.
That said, large energy consuming industries (mining, chemical manufacturing, metals, discrete manufacturing, real estate companies, water utilities, cities/local government operations and retailers) have begun to pay attention to energy efficiency and performance for a number of reasons, including de-regulated markets, volatility of energy prices, cost reduction opportunities and corporate social responsibility goals.
Sustained energy efficiency efforts have provided large energy consuming organizations such as Dow Chemical, DuPont and BASF billions of dollars in cost savings. Through the use of various energy efficiency and cost reduction techniques these organizations have been able to reduce energy intensity to add more value and generate more revenues for every dollar spent on energy.
Regardless of the motivation, energy efficiency and resource cost reduction efforts are focused on a few key themes. The following figure shows the primary approaches that organizations leverage to improve energy efficiency and reduce energy costs.
- All energy efficiency improvement and cost reduction strategies rely on improving visibility of energy consumption and related costs at every level of the organization, including asset, activity, shift, facility, product, batch and organization level. Understanding energy consumption, demand and related costs at a detailed level (15 minute intervals) will allow the energy teams understand where energy efficiency and cost reduction opportunities are and how they can be achieved.
- Demand response is a strategy that is available for organizations to reduce energy costs. Utilities offer various demand response programs that organizations can sign up to if they have the capability to reduce load quickly during emergency events. A good understanding of load profiles, essential and non-essential loads, capacity to load shed without adversely affecting operations is essential to participate in demand response programs
- Monitoring and improving energy performance of assets as part of routine maintenance activities is perhaps the best available approach to improving energy efficiency. Organizations can leverage existing data from SCADA (Supervisory control and data acquisition), BMS (Building Management System) and DCS (distributed control systems) systems to set up condition based monitoring maintenance strategies for energy performance.
- When energy efficiency improvement opportunities are discovered the best approach is to set up a project to evaluate, implement and monitor effectiveness of improvement action. The improvement action could be as simple as a behavioral change to as complex as commissioning of significant capital asset(s). The project based approach lends itself to improved coordination, collaboration and visibility across the enterprise and is essential for measurement and verification (M&V).
Given the importance of energy and environmental performance to organizations of all sizes, SAP has been providing Energy and Environmental Resource Management capabilities as part of Sustainability and Operational Excellence solution portfolios.
The figure shows various capabilities and solution view of SAP Energy and Environmental Resource Management (EERM).
The SAP EERM solution leverages new developments based on SAP HANA as well as proven solution components such as SAP Manufacturing Integration and Intelligence (SAP MII), SAP Project and Portfolio Management and SAP Sustainability Performance Management. Manufacturing and Real Estate oriented customers can easily implement a practical and sound enterprise and facility/plant level energy management strategy that leverages SAP EERM solution as well as key capabilities of SAP Business Suite, including Plant Maintenance, Facility Management and Production Planning. Learn more about SAP Energy and Environmental Resource Management and see how you can help organization reduce energy and resource consumption, costs as well as environmental footprint. After all, Sustainability is the preeminent challenge of our times. Every step and action, however small, counts.