Industrial Institutional News
The high-tech ways to becoming a high performing energy manager

So, what can you do to reduce your energy bill? You can’t control electricity prices, but there are opportunities to leverage technology to manage your energy consumption and costs without negatively affecting the operation of your business. Data logging and monitoring are very trendy right now, with lots of talk of Big Data and the Internet of Things (IoT) in the energy world. The looming question, though, is how do you use all of that data to improve your business?

According to the EPA, for most firms, up to 30% of energy is wasted, as illustrated in our chart.

Many in the industry are referring to this situation as the “wasted energy opportunity.” If the EPA studies are correct and the average plant is 30% inefficient, that means there are still large opportunities for the vast majority of firms to improve their energy performance and reduce costs. If you’ve taken care of all the low hanging fruit (LED lights, compressed air leaks, variable frequency drives), you’re probably in that light green ‘above average’ area, but very few companies we talk to have an active monitoring and tracking program in place. Which means whether you’re above or below the average level of performance there are benefits to be realized with these tactics.
 
Lessons Learned from the Advertising Industry

Whenever I hear someone talk about the ‘wasted energy opportunity’, I can’t help but think of this quote from John Wanamaker: “Half the money I spend on advertising is wasted; the trouble is I don’t know which half.” This comment was made in the late 1800s, when there was no monitoring or tracking of the performance of advertising assets. Fast-forward to modern online advertising and Google’s introduction of enhanced monitoring and precise tracking, which helped transform the ad industry and addressed their “wasted money opportunity”.

Enhanced monitoring: This allowed advertisers to track the usage of an ad down to a minute-by-minute level and understand consumption patterns, and more importantly, consumption drivers, like demographics, income and country of origin. This provided advertisers with the intelligence/information to know exactly where their dollars were going, as well as when, and to whom, allowing advertisers to optimize ad spend and eliminate waste.

Precise tracking: As we all know by now, when you visit a website it puts a cookie on your browser. That cookie is effectively a little sensor. It’s a software based sensor but its still a little sensor. And that sensor provides advertisers with granular data for precision targeting of ads. For example, I was recently researching a new hiking backpack and now I see it wherever I go – even when reading about energy tech, something not usually correlated with hiking. That’s because of that cookie – the little sensor – that leads to an incredible amount of tracking. And the introduction of tracking is what allowed advertisers to identify who was consuming their products and then focus their activities on the highest value assets – like trying to sell me a backpack.
 
Knowledge is Power

Those two technological advances delivered benefits that revolutionized the advertising industry. Knowing when and where advertising assets were being used and taking that information to target the most promising prospects eliminated wasted ad spend and caused a transformational shift, as advertisers shifted from low performing assets to high performing ones. These same lessons can be applied to your energy performance. As you can see from the bell curve (in the chart above), not everyone is high performing—and in fact only a small percentage is. To become high performing in energy you can to adopt these same technologies—enhanced monitoring and precise tracking—to reap great benefits.

Enhanced monitoring: It’s difficult to manage something as dynamic as energy with only monthly data. The foundation of enhanced monitoring is getting time relevant energy data. Just like Google introduced ad monitoring down to the second, you should know exactly when your energy is being consumed. And by regularly monitoring energy consumption drivers in addition to consumption, you can implement enhanced monitoring in your business. Whether you’re looking at the number of plant workers, dollars or lb of production, temperature, humidity, etc., by pulling in all of the main drivers of your energy consumption into your analysis, you can gain a clear understanding of what has the greatest impact on your energy bills.

Knowledge is power and having a deep knowledge of your consumption patterns and the drivers of those consumption patterns allows you to know where your energy is going and why. These will help to identify patterns and anomalies that you can utilize to become a high performing energy organization.

Precise tracking: Tracking has always been difficult in energy. From a data perspective, the building/plant usually looks like a black box, with the only information you have access to being a bill and, at most, hourly data. Thanks to very recent technological advances, that situation has changed. Technology has brought the cost of sub metering systems down dramatically in the past 24 months, enabling a much broader penetration of metering within a facility. I call this “breaking down the walls,” because you can finally get energy data from inside your building. This is an application of IoT—a trendy term but applicable here. IoT = massive amounts of data points pushed to the cloud for analytics. With this data, you can track exactly which parts of your plant, right down to specific machines or processes, are consuming precisely what amounts of kWh.

Most customers we talk to have a sense of how much their plant uses. We often hear things like, “machine X is 250 kW, machine Y is 35 kW, so we’re consuming 285 kw for this process.” This is a very educated guess—but it’s still a guess. With precise tracking you can start to test and challenge your original assumptions about where all those kWhs are going. For example, once getting access to this tracking data one customer was shocked to find out how much energy was going to outdoor lighting, but she now had the information to do something about it. Just like in the advertising example, knowing what is consuming your energy at a high level and then being able to drill down to a granular level with precise tracking, you can focus your efforts on the highest value assets, helping convert your business to a high performer.

Technology: Opening a New World for Energy Managers

So, how do we, as energy managers, take advantage of technology to get enhanced monitoring and precise tracking? Big Data is a flashy term, but there are benefits we can derive by improving monitoring of energy consumption. And another flashy term—the Internet of Things—can help dramatically improve tracking of energy consumption, by deploying relatively cheap sensors to get massive amounts of data. The combination of enhanced monitoring with big data and precise tracking with cheap IoT sensors will finally give us the tools to tackle the wasted energy opportunity once and for all.

These technology advances are exciting and open a whole new world of energy performance to us. But before you head down the high tech path, start with getting the foundation in place first. And we can help by demystify your energy bills and identifying exactly where your energy dollars are going, set a baseline for your energy consumption, automate your data collection and use analytics to identify trends and anomalies. There are simple steps you can take to implement your data driven energy management program and start saving money now.

* Chart courtesy of US Environmental Protection Agency and www.sustainableplant.com/2013/03/the-top-five-energy-efficiency-measures-for-industrial-businesses