Utility Monitoring & Targeting: Save Energy, Cut Costs
The more you know about utility consumption at your plant, the
better you can manage it and the healthier your bottom line will
be. All too often, utility consumption is invisible, treated as
a fixed cost on the balance sheet. Some organizations simply estimate
utility costs without an exact understanding of how these costs
differ between product lines or affect operating equipment efficiency
(OEE). Companies that actively manage the highly variable costs
of hydro, water, sewer and gas become more efficient, more competitive
and more profitable.
Utility monitoring and targeting (M&T) relates to the management
axiom, "you cannot manage what you cannot measure." M&T
systems are designed to reduce utility costs through improved utility
efficiency and management. M&T provides essential feedback to
support "Lean Manufacturing", OEE, utility management
projects and utility forecasting for more accurate production budgeting.
It also makes your business more environmentally sustainable by
reducing greenhouse gas emissions.
M&T determines the relationship between utility use and key
performance indicators (production levels, weather patterns, etc.)
in order to:
- Identify and explain increases or decreases in utility use;
- Establish utility consumption trends (daily, weekly, seasonal,
- Forecast utility use when planning business changes;
- Diagnose specific areas of waste;
- Monitor how your business reacts to changes;
- Develop performance targets for utility management programs;
- Link the rate of utility use to improvements and/or setbacks
in your environmental performance;
- Improve operating equipment efficiency; and
- Manage consumption, rather than accept it as a fixed cost with
M&T is different than a utility audit, which identifies specific
projects. M&T provides ongoing benefits by establishing baseline
performance and a process of continuous improvement. The benefits
- Documented utility cost savings ranging from 5% to 15%;
- Improved product costing models as sub-metering identifies process
and line costs for specific shop keeping units (SKU's);
- Improved annual budgeting (M&T linked to production forecasts
can help predict future utility needs and opportunities for energy
- Waste avoidance.
Implementing M&T in your facility can be as simple as monitoring
inlet consumption using real-time water, gas and electricity meters.
M&T can also target selected streams or areas with sub-metering
for a specific objective.
The targeted application of M&T is the "hands-on"
management tool. Separately metering production units, such as refrigeration,
freezing, ovens and/or other cooking operations allows you to optimize
their performance. The impact of capital improvements on utility
consumption can be measured directly. Metering processes with high
utility demand, such as compressed air, lighting, HVAC and air makeup
and exchange, allows you to ensure that switches and valves are
shut off when they are not required.
Unique applications for the food processing industry also include:
- Monitoring specific cost centers with strategically placed
sub-meters for more accurate product costing;
- Using sub-meters to identify OEE in order to respond to situations
where energy use rises above the baseline target for that process;
- Identifying non-production, fixed costs, such as comfort heating
- Determining the most efficient products on specific lines, particularly
useful for frequently changing product types that involve frying,
cooking, baking, and freezing (where product size, shape and mass
have an impact);
- Tracking energy use in real time by process, accompanied by
an alarm if energy consumption exceeds a target (valuable in energy-intensive
situations such as in-season vegetable processing); and
- Allowing supervisors on the shop floor to better manage utility
use by increasing their awareness of utility consumption.
A seasonal vegetable processor spending $1 million on utilities
during the processing season could save as much as 10% of that cost
Implementing an M&T program
Step 1: Estimate utility consumption
The first step in preparing an M&T program is to conduct a
survey of your facility and equipment in order to estimate utility
consumption. This quantifies the key energy and utility consumers
in your plant. You also need to quantify other variables that impact
your utility consumption, such as production levels or weather patterns
in order to "normalize" utility use. Once these aspects
are defined for your facility, an M&T plan can be initiated.
Step 2: Determine objectives
Now you need to develop and understand the objectives you want
the M&T system to achieve in your plant. Your objective can
be to monitor the whole plant or focus on a small number of processes
or certain machinery. Focused objectives result in a cost-effective
Step 3: Install meters and measure
Based on your objectives, you must determine what meters are required
and where to put them. Once your meters are installed, the next
step is to aggregate the data they provide. It is possible to do
this manually if you have just a few meters. However, we recommend
that you retrieve your data electronically and send it to a spreadsheet
where the data can be collated automatically. This can be done for
a relatively low cost.
How often you compile your data depends on your desired reporting
level. There is a trade-off between getting enough data to track
trends but not getting so much that it is difficult to manage. Some
measures can be taken directly from the meters, while others may
need to be calculated. Embedded cells in spreadsheets can help automate
this task. Factors such as production rates or degree days may also
be collected at intervals to match the meter data.
Step 4: Define your baseline
The compiled data is plotted on tables to define your general consumption
baseline measurement. Your data will need to be normalized by plotting
utility consumption rates against production levels or any other
identified variable that affects the data's accuracy, such as temperature
or humidity. The "best fit" line is then automatically
Step 5: Set improvement targets
Once your baseline is established, your management team can develop
realistic targets for improvements. The targets can have two aspects
- the amount of utility consumption to be reduced and the timeframe
to implement the changes. Your targets can include reducing high
consumption peaks identified by the meters (possibly procedural
changes) or the more challenging target of reducing overall average
consumption (possibly requiring capital projects).
TIP: Sub-metering departments will allow supervisors to
better manage utility use.
Step 6: Monitor variations
With your data gathering processes under way, you must compare
consumption patterns to the objectives and targets you set. Variations
in consumption should be identified and compared with your baseline
to determine their significance. Variations can include:
- Short term surge or peak results that can cause demand spikes
on generating equipment;
- Systematic changes in consumption that may be a reflection of
equipment or machinery performance; and
- A measured increase or decrease in average consumption based
on a change in operations.
Step 7: Analyze data and identify root causes
You can use a number of tools to analyze your data and interpret
how changes in your production system affect your utility use. For
example, measuring the difference between expected consumption and
actual consumption can be performed by CUSUM (Cumulative SUM of
the differences). CUSUM is an analytical tool that plots the relationship
between two parameters to determine how they affect each other.
For example, the simple application of measuring energy cost per
unit of production will allow a project team to identify if energy
efficiency changes are working.
Utility monitoring and targeting is specific to each facility. To
learn more about how to implement M&T, the following resources
OMAFRA fact sheets:
o Benchmarking Utility
Performance in the Food Industry
o Selecting Meters for Your
Food or Beverage Processing Facility
Natural Resources Canada's
Office of Energy Efficiency website (click on "industrial"
for links to training and other resources)
Engineering companies that design utility M&T programs
The Ontario Ministry of Agriculture, Food, and Rural
Affairs is committed to ensuring Ontario's food industry has all
the tools to be energy efficient and competitive.