Say farewell to the old energy paradigm

Controlling costs in today’s market requires a different approach, says Christopher Russell, contributing editor, in this month's Energy Saver column.

By Christopher Russell, contributing editor

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Some companies are effectively controlling their energy costs, while others aren’t. Many of today’s chemicals manufacturers are making 21st century energy decisions using a 1980s management paradigm.

That approach is no longer suitable in an energy market characterized by utility deregulation, volatile energy prices, uncertain supply, evolving emissions liabilities, and rapid technological change. These sentiments embody the old paradigm that’s still widely employed by industry:

  • “Energy is not our core business.” Energy is given the managerial attention and budgetary resources commensurate with its status as a support (or secondary) function.
  • “You’re the engineer — you figure it out.” Energy is consumed by power house assets and related plant utilities. Therefore, the energy cost control is often delegated to the engineering staff that operate these assets.
  • “Low fuel price is the solution.” Some companies see energy costs purely as an issue for their procurement director. This applies to facilities located in states with deregulated utilities markets that allow consumers to choose their energy commodity provider.
  • “It’s not my job.” Departmental “silos” or “turf” issues are a fact of life in most organizations. Competition between departments for budget authority only reinforces departmental divisions. Companies tend to assign problems to one person or department. This ensures that energy control remains strictly an “engineering” or “procurement” issue.
  • “That’s the way we’ve always done it.” People seek energy solutions by using the tools that their professional discipline provides. For engineers, this means pursuing technology and hardware projects. Procurement directors seek the lowest available energy prices by changing energy providers, switching fuel types, or both. Engineering or procurement solutions, in contrast to changing energy-related procedures and behaviors, typically generate the least friction with other departments within the organization.

Energy cost control isn’t a one-time event and requires more than one tool to achieve ongoing progress. Too often, though, plant managers focus on a single approach. While this can lead to some gains, it doesn’t achieve anything near what’s possible from making a broader assault on energy costs.

Modern industrial energy management strategies often require the coordination of many people across several departments. Energy management — the concept, the strategies for its implementation, and its impact on business performance — must be mutually understood by all stakeholders if implementation is to succeed. This fact defeats expectations for companies that cling to the old energy-decision paradigm, and probably explains why a lot of energy waste still persists. Modern energy management employs goals, benchmarks, monitoring, remedial actions, and shrewd investments, all of which are committed to standard operating procedures. These are applied bumper-to-bumper, throughout the organization.

A number of people, both at a site and outside it, can contribute to effective energy management. It’s a process that must have both a business plan — to identify not only the tools, but the starting point, the goal, and the players that make results happen — and management support.

There’s a wide gap between the old industrial energy paradigm and the demands of today’s energy market. Any facility trying to close that gap will require more than the efforts of a single department or individual.

To see a wealth of energy management information, including case studies and a critique of prevailing strategies, visit the Alliance to Save Energy’s (ASE) Web site at: www.ase.org/section/topic/industry. The ASE is a non-profit coalition of business, government, consumer, and environmental leaders that promotes energy efficiency worldwide to benefit the economy, environment and energy security. The Alliance translates energy efficiency into opportunities to improve business performance.

Manufacturers across the U.S. are struggling with volatile energy costs. The ASE Energy [word missing?] documents the merits of energy efficiency and its practical impact on business performance. On the ASE site you can find a list of programs, reports, events and other energy-related information.

The reports include, “Energy Management Pathfinder,”  “Motivating Business Leaders to Improve Profitability Through Energy Efficiency,” “Strategic Industrial Energy Efficiency,” and “Efficiency and Innovation in U.S. Manufacturing Energy Use.” Additionally, there are energy management survey results, strategies, a checklist for management approval of energy projects, and more resources available.

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