Business: Industrial

Setting up an Energy Management Program
1.1 How to get started

People the world over are feeling increasingly concerned
about the health of
the environment in which they live – witness the efforts to stem the
global warming effects of greenhouse gases. To start with, an energy management
program
offers a unique opportunity to marry the goodwill most people feel toward doing
something positive for the environment with achieving a business objective
of reducing
energy consumption. These two objectives go hand in hand.

"We want to save
energy because we know it helps achieve a higher order objective – the
environment in which we live. We do it because it is the right thing to do!" – A
motivated employee

The primary driver in the most successful energy management
programs is the feeling of collective responsibility for the environment, and
the effort to help it. This should be the rallying point for the foundry’s
troops when starting the program!

"Taking care of the environment makes good
business sense." – Jack Welch, former CEO, GE

Innovation and efficiency
improvements are the key words in the struggle for survival and prosperity
in the globally competitive foundry business. Business
managers often underestimate the potential savings that can be realized by
reducing energy consumption. Until recently, in most industries energy costs
were regarded
simply as a cost of doing business, and little attention was paid to them.
The level of interest in efficient energy use had been moderated by continuing
low
oil and natural gas prices that prevailed until 2000. Also typically, a foundry
would have little knowledge of energy issues within the plant and other utilities
it had bought.

"The business of business is to stay in business." – Peter
Drucker

The steep escalation of energy prices in 2000, together with concerns
about market competitiveness, control of greenhouse gas emissions and energy
supply security, added urgency to the need to examine the effectiveness of
energy
use in foundries. This has not been lost on any company’s president,
of course. However, the realization of the need for improved energy efficiency
must progress beyond a mere acknowledgement, a “motherhood” statement – it
needs to result in an action. Nothing commands attention more than the dollar
sign – and
the plant accountant can prove to be a valuable ally in the energy battle plan.
Table 1 provides an illustration of how this works.

TABLE 1:

Profit increase from energy savings

On the background of basic cost information,
a case can be made for an effort to start to determine the current state of
energy consumption, and then to do something about it. Compiling additional
information on the current consumption
patterns will involve a key step – an energy audit (see below). The resulting
reasoned and justified argument will give the energy issues a chance to stand
out among a number of other priorities competing for the attention of top management.

The
assumption of 35% energy savings in Table 1 is not far-fetched. It should be
remembered that worldwide experience has shown that mere improvement in
ordinary housekeeping practices (i.e., minding the energy connotation of everyday
work,
such as switching off unneeded equipment, etc.) typically produces 10–15%
savings! Additional energy savings can also be obtained as conservatively shown
on Table 2. The table is a compilation of results from many energy audits of
Canadian foundries undertaken in the few past years by CANMET. It shows the
magnitude of energy savings identified by an energy audit that can be realized
in an average
foundry.

TABLE 2:

Summary of expected results based on end use consumption

To start, a few major components must be put in place:

1. Firm commitment of top
   management
2. Clearly defined program objectives
3. Organizational structure and definition
   of responsibilities
4. Provision of resources – people and money
5. Measures and tracking procedures
6. Regular progress review

These points are further expanded upon in Figure 1
and in Section 3.4, “Developing
energy management programs further” (page 99).

Energy management is an
ongoing concern in any foundry. Its success depends on a team effort starting
with a firm commitment from the top executive and
his
or her management team. Management’s demonstration of unwavering, solid
and visible support filters through the organization to each employee. Everybody
will take heed and will follow the example.

Once the decision to manage energy
has been reached, it should be supported by a board-level energy policy, which
will regard energy and the cost of utilities
as direct costs on par with other operational costs, such as labour, raw materials,
etc.

A buildup of general awareness about energy issues through communication,
education and training of employees at all relevant levels will contribute
to a cultural change within the organization. Education and training must be
sustained in order to achieve lasting energy efficiency improvements.

Sometimes,
even when the opportunities for energy savings are great, they are not utilized.
The reasons fall into the familiar:

• Was not aware of opportunities that exist;
• Did not know what to do;
• Top management not supportive;
• Energy issues not a priority;
• No money and/or staff and/or time; and
• No defined accountability.

Since the primary business goal is financial savings,
managers must understand the principle of economics and run their department
as if it were
their own business. In doing so, improving energy efficiency should get proper
attention. This will
require some education. Even if the financial gains from energy efficiency
improvements were to seem modest compared to the value of sales or
to the overall budget,
they can contribute considerably to the foundry’s net profit.

An
energy management program follows the same principles that apply
to any purposeful undertaking (e.g., to quality and environmental
management systems) – principles that Dr. Deming formulated as the four-step
cycle, Plan – Do – Check – Act, PDCA, shown below.

The details of these four key steps are shown in Figure 1

To realize opportunities, foundry
management must successfully integrate organizational and behavioural (cultural)
change and new energy use technology.

The energy efficiency effort must have
a defined focus, accountability and responsibility.

The points in Figure 1 are
generic and given for information only. Their application will vary with the
size and complexity of a foundry’s operations
and will be determined by site-specific conditions of a particular
energy efficiency improvement program.

FIGURE 1:

Energy management plan at a glance