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Four steps of planning for peak electrical use

Analysis can lead to evidence-based action.


July 30, 2019
By David Arkell

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Planning for peak electrical use is an important issue, particularly for manufacturing plants during a hot summer season—but it is not possible unless a common misunderstanding about managing energy is addressed first.

That is, many corporate leaders do not really believe it is possible to manage energy. Instead, they think using energy is simply the cost of doing business.

So, if electricity use cannot be controlled, then what is the purpose of trying to curtail peaks? This line of thinking will always put the brakes on energy management planning.

Corporate leaders who hold these limiting beliefs will make no significant effort to change internal processes or business plans to address energy use and costs. Thus, the initial challenge is to first convince senior managers that energy is controllable.

Once that challenge is overcome, successful peak electricity use planning involves four critical components:

  1. Analyze utility bill data

Up to 20 separate factors contribute to electricity costs. All of them can be analyzed and controlled. And all of them are understood by reference to monthly utility bills.

Peak demand charges, e.g. Ontario’s Global Adjustment (GA), are certainly significant factors impacting monthly energy costs, but it is necessary to understand the other factors, as well. Is the utility rate structure the right one? What is the site’s power factor? Is there a penalty for that power factor? How much do utility costs vary over time? If so, why do they vary?

Typically, most companies that diligently review their utility data can realize 5% to 10% in savings and cost avoidance. CEOs who were initially reluctant to embrace energy management do so once they see the compelling business case for action. Analyzing utility bills is the strategic enabler for such action.

  1. Analyze plant equipment

Compile a list of major equipment and the corresponding operating schedules. Assess when the equipment could be turned off and if operations should be shifted to other time slots.

It is important for both maintenance and production teams to define the equipment list and schedule. Together, they can accurately answer the question, “How can this equipment be operated to reduce energy costs without negatively impacting production?”

  1. Analyze interval energy data

The next step is to query the interval data. This data comes from utility main service meters, which record how much energy is used on an hourly or, in some cases, more frequent basis.

As the interval data is collected, reported and analyzed, patterns will emerge. For example, how much energy is used during non-production times compared to production times? And how does that level of consumption compare to earlier expectations? Interval data can be used to identify site anomalies and then guide a search for the causes.

Interval data is particularly useful for peak electrical use planning. It is granular and tactical and it provides the necessary clues for how to reduce baseload or flatten peak use.

An organization can often avoid significant cost premiums if it reduces energy consumption during periods when grids are strained. Many jurisdictions offer demand management programs that reward companies for reducing their consumption at these critical times. Access to hourly data is essential for participation.

  1. Take evidence-based action.

When an organization commits to a corporate energy strategy, no one person can do all that is required. Rather, a broad, diverse corporate team is needed to guide planning and implementation.

Site-specific teams can use interval data to map their facilities’ energy loads on the basis of (a) operating hours and (b) specific equipment. Once a load profile is created, then targets and accountabilities can be set, providing the context for peak electricity use planning.

Executives must approve and direct the corporate energy strategy, while cross-functional teams work collaboratively to understand energy use and costs within their organization, with data analyses informing the business case for taking action.

Through such means, organizations gain a sophisticated understanding of their equipment and operations and can successfully implement energy-saving initiatives, including those relating to peak periods.

David Arkell is CEO of 360 Energy, a management consulting firm that specializes in corporate energy issues for clients with operations throughout North America. For further information, questions or comments on this article, please contact him toll-free at (877) 431-0332 or via email at david.arkell@360energy.net.

This column originally appeared in the July 2019 issue of Energy Manager Canada magazine.