Energy Management – Making America more Competitive Program

August 29, 2013 6:58 pm Published by

We all want American manufacturer’s to become more competitive in the global marketplace. This can only come through innovation and careful use of resources.


America spends about 9% if its gross national product for energy, consuming about 25% of its energy for producing 22% of the world’s gross national product, while some nations such as Japan and Germany produce the same or greater GNP per capita with significantly less energy than America. The Energy Independence & Security Act was passed by Congress in 2007 to focus on moving America toward renewable fuel production for consumer protection and to increase energy efficiency of buildings, manufacturing plants, vehicles, greenhouse gas capture and storage, and to improve the energy performance of the federal government.


Changing energy use patterns and implementing proven technologies to optimize energy consumption are a necessity to achieving true energy efficiency. However, the single most important ingredient for successful implementation of an energy management program (EMP) is commitment to the program by top management. Without the support of top management most energy management programs will fail. It is also very important to designate a single person who has responsibility for coordinating the program and providing back-up talent necessary from several disciplines.


Most successful energy management programs have an energy management committee, and often subcommittees are used to gather and implement the proposed solutions. A technical committee may be used for coordination with plant-level people and technology research while a steering committee provides support through all organizational levels from cost allocation to educating the work force about the program.


Typically, energy cost allocation for many manufacturing businesses is accounted for as part of general overhead. In order for individual managers and supervisors to hold themselves responsible for controlling energy costs it is best to allocate energy costs down to “cost centers” for a facility. It is critical for the energy management steering committee, or designated energy program manager, to find the “pulse of energy consumption” in a plant. Cost centers provide an effective system of reporting energy when they are used with metering devices. To be effective basic energy accounting must include energy use monitoring, energy use record, and a performance measure. These may be implemented in four phases: (1) development of baseline energy consumption footprint, (2) design and installation of accurate metering, (3) development of an energy budget, and (4) publication of regular performance reports including variances.


Monitoring, targeting, reporting, and continuous improvement techniques should be viewed as an ongoing cyclical process that provides accountability in relationship to performance of an energy management program.


The majority of energy costs are usually incurred by a few pieces of equipment and HVAC systems. High energy use equipment should be metered and monitored carefully. Major high energy use equipment includes: steam boilers, compressed air systems, presses, extruders, ovens/dryers, chilled and hot water systems, etc.


To motivate employees the commitment from top management must be clearly communicated through all levels of management down to each worker. This can be done through news updates, employee training, incentive pay for ideas that are implemented, and visibility within the company through recognition.


According to a survey by the Association of Energy Engineers, energy conservation helps to reduce about 92% of maintenance material cost, 71% of maintenance labor cost, 33% of capital investment, and 63% of procurement cost. Moreover, approximately 44% of the companies surveyed believed that energy conservation helped them to increase their public image.


The efficient and effective use of energy to maximize profits and enhance global competitiveness is the main goal of energy management. Many incentive and rebate programs are available throughout the country to assist businesses with implementation of energy-efficiency measures. An energy assessment is the first step toward development of an energy management program.


Energy management maximizes profits by reducing costs:

  • 5-15% of energy cost      reduction may result without capital expenditure
  • 15-30 % of energy cost      reduction may result with low cost and/or short payback
  • 30-50% of energy cost      reduction may result with higher cost and/or longer payback


When top management supports the energy management program manager (EMPM) and committees with measurable goals, rewards, and recognition success is inevitable. Early energy project selection is very important and should be seen as a positive step towards continued success of the program. Publishing the success of early projects in the company newsletter, and sharing the details with employees at meetings, will enhance how the program is viewed by the workforce. Employers who give recognition to employees who suggested and/or implemented a successful energy-saving project will receive dividends in employee morale and support for new projects.


Energy management positively impacts:

  • Productivity
  • Sustainability
  • Carbon footprint
  • Greenhouse gas emissions
  • Energy security


The first step to development of an effective energy management program is a thorough facility survey, assessment, and review of all energy consuming equipment. Evaluation of the data collected during the facility survey can then be used to provide recommendations for energy-reduction solutions, and identification of projects with the greatest payback vs. investment. Many projects can be implemented by the internal work force with proper guidance from industry experts. Capital project improvements may require a third party for evaluation and proper allocation of incentive funds.


Many successful projects have been designed and implement by Ship & Shore Environmental for WPA members. As a benefit to WPA members, Ship & Shore Environmental offers “free” initial consultations and energy-efficiency assessments. Benefits include expert advice and recommendations for energy-efficiency improvements and assistance with application to energy incentive/rebate programs.


 Reference: Guide to Energy Management by Barney L. Capehart, Wayne C. Turner, William J. Kennedy Seventh, 7th Edition



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