Working with VEM for Energy Efficiency

Why Energy Efficiency is Important?

Understanding the importance of Energy Efficiency

• Cost-Effective Decarbonization: Energy efficiency reduces both emissions and operational costs, offering a strong return on investment.
• Mature Yet Untapped Potential: While well-established in regions like the EU, significant potential remains with emerging technologies that often have payback periods of less than four years.
• Industry and Regional Variation: The benefits vary by industry and region, with substantial opportunities still available.
• Sector-Specific Gains: Sectors like food, beverage, and transport in France could achieve a 30% improvement by 2035.
• Advanced Regions: Europe and the US have ongoing potential, with the US Department of Energy estimating at least a 25% efficiency improvement possible in each state.
• Greater Opportunities in Developing Regions: The Asia Pacific and Africa, with less mature technologies and policies, have significant prospects for efficiency gains.

What are the Main Energy Efficiency Levers? 

The Main Energy Efficiency Levers

• Energy efficiency involves two main approaches: reducing final energy demand and optimizing utilities production.
• Reducing final energy demand includes technical solutions like optimizing compressed air systems, enhancing steam and hot water networks, and upgrading lighting to LEDs, as well as promoting employee awareness and behavioral changes.
• Optimizing utilities production involves selecting the right heat carrier, managing heating network temperatures, controlling boiler combustion with O2/CO2 probes, and optimizing chillers based on external temperatures.
• Simple adjustments such as reducing compressor pressure or optimizing chiller performance can result in significant energy savings, while upgrading outdated equipment can yield substantial reductions.
• Implementing a comprehensive energy efficiency program requires careful planning, adequate resources, and adoption of best practices.

How can Manufacturing Avoid Common Energy Efficiency Pitfalls?

Four typical challenges significantly affect the success of numerous energy efficiency programs, highlighting the crucial need for appropriate governance and supporting factors to achieve the necessary transformation.

1. Believing energy efficiency is a one-off exercise

• To achieve lasting results, organizations should appoint energy efficiency champions at each site. These champions will dedicate time to monitoring efficiency and suggesting energy-saving measures, balancing internal expertise with external support. Well-trained personnel within the company are essential to maintain alignment with sustainability goals. They should complement formal efforts by establishing processes, strategies, and KPIs to monitor performance over time. Creating a transformative change is an ongoing process that requires buy-in across the entire company.

2. Having limited access to CAPEX and/or limited use of financing solutions

• Investments in energy efficiency often compete with other internal projects for corporate funds, and gaining approval to replace technically functional assets with highly efficient alternatives can be challenging. Identifying subsidies to reduce investment costs and moving away from a project-by-project approach can be helpful, but the most effective strategy is to shift the investment mindset from focusing solely on return on investment (ROI) to considering total cost of ownership (TCO). Establishing a baseline and comparing the long-term impact of implementing changes versus taking no action typically demonstrates cost savings or negligible additional costs, while also securing efficiency benefits for the future.

3. Gap to implementation

• Another commonly cited scenario is when a company develops an energy efficiency action plan with a budget allocated, but those funds end up unused. This issue arises because site teams prioritize spending on production over efficiency, often not recognizing the benefits of efficiency to the company's overall profitability. This highlights the importance of proper governance and mindset; even a well-constructed efficiency model will not be implemented without them. In addition to ensuring the availability of appropriate expertise, management needs to establish effective governance and incentives to ensure that corporate targets are effectively communicated and implemented at individual sites.

4. Non-scalability

• Energy efficiency projects are typically implemented on a site-by-site basis rather than programmatically. It is crucial to establish the necessary tools and foster an efficiency mindset to facilitate the sharing of best practices among partners, rather than reinventing solutions for each site. When a successful approach is identified at one site, it should be shared with partner sites to create synergies and promote collaboration across different areas. Adopting programmatic practices holds significant potential value and can enable organizations to accelerate decarbonization at a larger scale and faster pace.

Working Together with VEM Solutions for Sustainable Manufacturing with Energy-Efficient Motors