Making the case for energy management technology

Don’t let misperceptions get in the way of substantial payoffs. Get over the three primary barriers to full-scale use of energy management technologies.

By Patty Solberg February 4, 2014

It’s no secret that energy accounts for a large percentage of most manufacturers’ operating costs. In the U.S. alone, manufacturers spend $20 billion on energy every year, according to the U.S. Department of Energy.

With those kinds of dollars being burned on a regular basis, you would think manufacturers would be scrambling to find ways to curb energy costs. And, in fact, many are.

A recent Navigant Research study indicates manufacturers’ desire to reduce their energy bills is fueling a boom in the market for technology that addresses that problem. Based on its research, Navigant expects the global market for industrial energy management solutions to almost double by the end of this decade, going from $11.3 billion in 2013 to $22.4 billion in 2020.

As impressive as those numbers are, some industry analysts contend they should be even larger, given the positive impact that industrial energy management technology has proven to have on corporate bottom lines. Just consider the track record of demand-management technology—software that helps manufacturers take a holistic approach to energy management and avoid the pricing penalties associated with using large amounts of energy when there’s heavy demand on the power grid.

Industrial companies that adopt these solutions consistently reduce peak demand charges anywhere from 10% to 30%. That translates to a reduction in utility bills of 5% to 10% or more, depending on the size of the facility and its specific demand charges. 

Operational improvements

Employing demand management technology also gives plant managers quick, easy access to information that can help them uncover—and rectify—production inefficiencies related to both poor equipment performance and independently run processes. By evaluating equipment and coordinating processes it’s possible to reduce energy costs without overhauling operations.

Given these obvious benefits, why aren’t all manufacturers rushing to adopt industrial energy management technology? After years of working and talking with hundreds of managers and executives in industrial businesses, I have noticed three primary barriers to full-scale adoption of energy management technology:

  • Fear of disruption
  • Doubts about the business case
  • System integration concerns.

These barriers can hinder adoption of demand management technology; some technologies are discussed here; suppliers of other types of energy management solutions likely encounter similar obstacles.

1. Fear of disruption

Let’s start with fear of disruption. Optimal demand control—preventing demand spikes, eliminating inefficiencies, and shifting power demand to the lowest-rate periods—is one of the key strategies enabled by demand management automation. But there’s probably no bigger barrier to adoption than the fear that this process will reduce production output or compromise product quality.

In reality, a sophisticated demand management system can optimize loads more safely and effectively than manual intervention. (See the Mission Produce case study for an example of successful enterprise-wide demand management.)

The ideal demand management solution will employ user-defined rules to prevent any actions that compromise critical processes. That allows for controlling and prioritizing loads in ways that are tailored to the production needs of specific plants. Users can then develop strategies that result in an overall reduction in energy costs—even across an entire enterprise—without sacrificing productivity. 

2. Doubts about the business case

Demand management automation delivers its returns by controlling energy use so precisely that users may not even notice it. That’s an advantage—but it creates skepticism upfront that the returns will be realized. In addition, businesses that have already completed energy efficiency upgrades find it hard to believe that there are more savings to be wrung (painlessly) from their processes.

It’s important to do a detailed analysis of your facility’s energy use. Your automation vendor may be able to analyze data from your facility to simulate demand control actions and results and determine potential demand management savings.

As Jake Nixon, director of operations for Mission Produce, points out, attaching dollar to figures to demand management scenarios is persuasive. “You know the old saying—what gets measured gets done,” Nixon says. “If I can say, ‘If we ran this load at 4 p.m. rather than 8 a.m., it would save us $5,000,’ that’s the power to justify change.” 

3. System integration concerns

It’s common for operations professionals to assume that demand management technology won’t fit smoothly into their existing controls environment, leaving them large amounts of stranded costs in previous automation investments. That’s simply not true.

Compatibility with existing infrastructure is always a key factor in choosing new technology, and demand management vendors have taken that into consideration. It’s possible to find demand management solutions that integrate with virtually any existing controls environment. In fact, a smart demand management system will extend the usefulness of legacy systems and maximize equipment lifetime through more efficient operations and lower overall maintenance costs.

The reasons manufacturers typically cite for not adopting energy management technology are largely perceptual. If you need to break down these barriers in your company, get hard data for your facilities. It could open a clear path to energy cost savings and more efficient operations.

– Patty Solberg is director of product marketing at Powerit Solutions, a Seattle-based international technology company that focuses on advanced energy demand management; edited by Sidney Hill, Jr., contributing content specialist, CFE Media. Send IEM comments to

ONLINE extra

See other Industrial Energy Management articles for February linked at the bottom.

Also see related case study: Producing energy savings on demand linked at the bottom of this posting. 

Key concepts

  • Misperceptions about energy management can get in the way of large savings.
  • Adoption hesitations include fear of disruption, doubts about the business case, and system integration concerns.
  • Getting hard data for your facilities can clear a path to energy cost savings and more efficient operations. 

Consider this

  • How can energy management measurements prioritize your demand management savings?