How has 3M Canada cut energy use by 32%?
By Anatoli Naoumov
June 6, 2018 - 3M is recognized as a world leader in energy efficiency, hands down. Since 2008, the company has reduced energy use by 32%. This result by far exceeds the 20% reduction goal to which many companies aspire. How does 3M work with energy? What can other companies learn from their experience?
By Anatoli Naoumov
I brought these questions to Andrew Hejnar, energy manager for 3M Canada, and the results of our conversation are fascinating.
How does 3M make big decisions about energy?
Energy management is an integral part of 3M’s general business strategy. Energy is understood as a means of advancing the long-term goal of improving lives… those of its employees and clients, and society.
In fact, the company has been at the forefront of sustainability since 1975, when 3M launched Pollution Prevention Pays as a means of empowering employees to guide the company’s sustainability efforts. One of the directives in the 1975 corporate policy, which has not changed in 30 years, is that 3M “will prevent pollution at the source wherever and whenever possible”. A separate Energy Group was formed at 3M Canada in 2007.
3M’s 2025 sustainability goals include specific energy use goals:
1. Increase energy efficiency by 30%.
2. 25% of its electricity will come from renewable sources.
3. Reduce GHG emissions by 50% compared to 2002.
At 3M, energy efficiency goals are set at the corporate level as part of general business strategy. The complete list of sustainability goals, and a summary of progress, is published here (PDF).
3M adheres to best practices to achieve energy reduction
To reduce its energy consumption, 3M relies on established best practices compiled in ISO 50001 and the Superior Energy Performance Program (SEP), established by the US Department of Energy. According to DoE, “The facilities in SEP have met the ISO 50001 standard and have improved their energy performance up to 30% over three years”.
DoE further confirms that “energy performance improvements at the certified facilities were significantly greater—up to 65%—compared to the non-certified facilities”.
Most 3M plants have already achieved both ISO 50001 and SEP certifications, and the remainder are working toward becoming fully certified. Plants must submit annual reports to maintain ISO 50001 certification, and this helps keep the plant on track and maintain performance. The next milestone is to develop and implement a corporate-wide energy management standard.
The 3 Pillars of energy management at 3M
3M did not just stop after implementing these best energy management practices; it chose to take them further.
In many companies, energy management work is understood as the implementation of new machines and processes. 3M works in a broader business context to achieve better results and do it faster. Energy management at 3M is supported by three pillars:
1. Monitoring and Targeting (M&T)
We’ve all heard the expression “You cannot manage what you do not measure”, and 3M has embraced this idea. The company collects energy data (both physical and dollar values), then processes it using regression analysis to produce baselines in accordance with recommendations from IMPVP (International Performance Measurement and Verification Protocol) and the requirements of SEP. This approach enables sensible monitoring of consumption in real-life conditions.
“Energy is often invisible. M&T makes it visible,” affirmed Hejnar. Deviations from baseline predictions are closely monitored to ensure stable, efficient performance. In some instances, operators are required to monitor energy consumption continuously at the machine level and report any deviations exceeding of 3% as they occur.
3M considers people to be the key to successful energy management, because no technology works without people. 3M has consistently integrated sustainability culture into daily operations since 1975.
Today, every employee, from the CEO to the custodian, must take sustainability training during the onboarding process, then again every two years.
A culture of sustainability pays off handsomely: operational and behavioural changes contribute 30% to overall consumption reduction with zero capital investment. Beyond measurable energy use reduction, managers at 3M report higher productivity with employees engaged in energy efficiency work.
3. Technology and projects
Energy efficiency technologies and energy waste reduction projects form the most obvious pillars of energy management, but current energy management projects at 3M go far beyond VFDs and LEDs. Among the implemented projects are heat recovery from ovens and compressors, the installation of electric blowers and mixers instead of using compressed air, and the installation of behind-the-meter CHP (combined heat & power) systems.
How does 3M find energy projects?
The energy management team at 3M Canada consists of four people; obviously not enough to do all the work on their own. In the past, the company would hire consultants to find and evaluate projects. Today, the energy management team facilitates and coordinates the work of plant engineers and employees, who identify, evaluate and implement most of the projects.
Here are some tricks of the trade I gleaned from Hejnar:
Energy treasure hunt
A group of engineers from different plants joins the local team to perform an Energy Treasure Hunt at a selected plant. First, the combined team walks the plant floors in an effort similar to a walk-through energy audit. Then, a brainstorming session follows. The generated results are left to the local team for deeper evaluation.
All employees contribute energy reduction ideas
If nobody does efficiency work on a regular basis, results never come. Since 3M wants efficiency to happen, the company rewards employees for improvement suggestions, even when these suggestions turn out to be unfeasible. Since 1948, 3M has allowed employees to dedicate 15% of their paid time to their own projects. This is when innovation, including ways to reduce energy use, is born.
How does 3M evaluate energy projects?
While many companies limit their choice of energy projects with those promising an under 2-year payback, 3M takes a longer perspective to achieve much higher results.
3M evaluates energy projects based on NPV (net present value) over 10 years, which is the same ratio the company uses for all CAPEX projects.
What differentiates energy projects, however, is that non-direct financial benefits—such as employee comfort or sustainability impact—are also considered during evaluation. To account for these benefits, projects can apply for a contribution from an internal Sustainability Fund for final financial evaluation.
How does 3M monitor results of energy projects?
Measuring results in energy is rarely a straightforward process. Many companies set reduction goals in absolute numbers e.g. “Reduce consumption by 20 GWh by 2020 compared to 2010”. While this absolute metric may be easy to track, aiming for it may limit business growth.
The same trouble happens with measuring reduction in percentages of absolute numbers. Measuring energy use reduction in as a percentage of sales is fogged by profit margin variations.
3M has set reduction goals as a percentage of the value predicted by the regression-based baseline specific to each plant. In effect, each plant competes with itself in energy intensity reduction. Each plant is different. Each plant manufactures its unique set of SKUs. As such, competition with itself is the only realistic way of registering actual efficiency changes.
This is hardly the simplest method, but 3M is hardly a simple company. The baseline method supports the core business: when a plant increases production, it is not penalized for extra energy use. In fact, aiming for energy efficiency often leads to higher asset utilization, fewer stoppages and higher production throughput. Decreased production does not necessarily contribute to energy savings.
3 Tips for energy projects
To ensure the success of your own energy projects, Hejnar says:
1. Secure high-level support of energy projects as soon as possible. Energy touches every aspect of the manufacturing process. Changes require will, coordination and cooperation, not to mention funding and resources. All of these are much easier to secure with a high-level corporate champion.
2. Involve your utilities. Energy efficiency specialists at utility companies are involved in dozens of projects that may benefit your plant. These people are willing and available to help find projects, provide temporary metering equipment, and formulate projects in a way to secure the most incentives. Also, “A plant walk-through with a utility rep often opens a different perspective,” says Hejnar.
3. Energy management is a team game. Energy links all equipment and most manufacturing processes. Every process requires energy. Thus, to be successful, energy management must be a collaborative process as well. A plant may invest thousands/millions of dollars into highly efficient machines, but a sloppy operator or an outdated procedure may squander all the promised savings.
On the positive side, joining forces with existing plant-level sustainability specialists may help HQ implement an energy project faster, because local people know local ways to get things done.
How do you measure up?
To find out how well you’re performing vis-à-vis energy management best practices, and to learn how by much how your plant can cut energy costs, check out our free Energy Management Score online assessment tool. 3M Canada scored 96% on EM Score and has reduced utility bills by 32% over 8 years. What’s your score? Take the 15-minute test and find out.
Anatoli Naoumov, MBA, MSc, CMVP, is a managing partner and “chief energy waste-buster” at GreenQ Partners. He has been certified as measurement and verification professional (CMVP) by the Association of Energy Engineers (AEE) and the Efficiency Valuation Organization (EVO). He can be reached at email@example.com .