Energy is set to play a greater role in the day-to-day operation of manufacturing sites. In just over a decade’s time, the industrial market will account for three-quarters of all the UK’s energy usage. As a result, tomorrow’s energy manager will be largely unrecognisable from what we see today, taking a major role in organisational affairs. This is the main conclusion of a report by utility consultancy Inenco (http://bit.ly/2zTThyZ).
Procurement problems
By 2030, says Jon Bauer, chief technology officer at Inenco, energy will be a prime topic at a boardroom level, with the individuals in charge of energy usage having more influence than ever over the running of a manufacturing site. “The energy manager of today will, by 2030, turn into a wider utilities manager and become more of an umbrella role that spans the entire organisation,” says Bauer. “They will become a core part of the senior management team as a digital-savvy individual who makes key strategic decisions across the whole business.”
In time, however, energy procurement will have moved out of energy managers’ remit altogether, and become a more company-wide decision says Bauer: “If you’re looking to run machinery between, say, 4pm and 8pm on a weekday, which in the UK is peak time, you’ll be looking at paying significantly more. Management today will be aware of this, but may not have the power or drive to do anything about it. As energy awareness grows in the coming years, we’ll see this trend towards flexible energy use change for the better.”
Changing pressures
Energy prices have long been a major headache for industry, and, unfortunately, Bauer doesn’t see that changing going forward. If anything, he says, things will only get worse. “Major investment decisions that organisations make today take into account energy consumption and cost,” he says. “If you look ahead, you can see a change in landscape, both politically and economically, which will make those decisions even more important.
“We are confident that non-commodity energy costs will continue to rise for the foreseeable future, in order to pay for major initiatives like nuclear power plants. That extra cost will have to be passed down to businesses and individuals. If you are a high user of energy, decisions about your consumption and utilisation will have to play an important part in any initiative you look to implement. It may be, for example, that you may not choose to run the plant 24/7, instead looking to do more activity in the lower-cost windows.”
Government pressure, as well, will only grow. International initiatives such as the Paris Climate Agreement have forced governments to get chief executives talking about energy consumption. “Government by itself won’t be able to deliver on the low-carbon promises of such agreements without pushing down onto high-consuming sectors like manufacturing,” explains Bauer.
Added to this will be changes in energy supply. “As we get towards 2020, the remaining coal-fired power plants will be switched off,” continues Bauer. “Furthermore, the new nuclear supply will not be online by that point. While, as a nation, we may not be facing an energy shortage, we need to make sure that supply matches demand.”
One way to combat this will be a growth in techniques such as demand-side response. This enables companies to turn up, down or shift
their energy usage according to their changing needs – something that will become more popular as tomorrow’s utilities manager
becomes more influential.
Growth of technology
As with all facets of modern life, technology is set to play an increasingly large role in energy consumption. Insight into the energy use of individual assets within a plant will become vital, says Bauer. “Research shows that about 50 billion devices will be online by 2020 – if your fridge is connected to the internet, there’s no excuse for your manufacturing site not to be,” he explains. “That will give so much insight to the individuals running the site, and it will all feed into total cost of production measurements.”
Bauer tempers this with a warning about over-reliance on technology. “It’s vital to remember, though, that technology on its own isn’t the answer; it’s more of an enabler,” he says. “It merely provides information for people to monitor and make decisions from. You can’t harness the power of what technology has to offer without having the knowledge of how to wield it. Today’s energy managers need to become more informed about what is possible when it comes to data and extracting information from working environments – and it’s not just about education about the technology itself. It also includes making better decisions about running the plant better and more efficiently.”
A different mentality?
Quite often, companies and organisations will not pay much attention to energy, as their core skill-set lies elsewhere. Bauer cites the example of the NHS – “Their job is to, first and foremost, save lives, so it’s understandable that they don’t prioritise energy efficiency.” However, he warns, this is not sustainable. “Separate research we have undertaken has shown that companies will need to find a 10% year-on-year efficiency improvement in the next few years just to keep pace with the market and ensure they pay the same for their energy as they do now,” he says. “Unless you are in the energy-saving mind-set, your total cost will go up and will stretch many companies to breaking point – especially in manufacturing, where margins are often very slim.”
Changing the outlook of manufacturers will take time, says Bauer. This is partly because of the image of energy-saving initiatives. “When the topic of saving energy comes up, it is traditionally seen just as a ‘save the planet’ initiative, and as a result falls down the priority list of busy organisations,” he says. “If, though, you look at it from a purely commercial angle, and don’t think about any of the green credentials, energy is always a high cost for any company – from a chip shop to a FTSE 100 PLC.
“There is a lot of money to be saved and efficiency to be gained through taking a proactive approach to energy usage. The fact that it helps protect the long-term future of the planet as well is an added bonus.”
To help today’s energy managers bridge the gaps and challenges identified in Inenco’s Future Utilities Manager report, and inspire the next
generation of energy professionals, the company has launched an Innovation Hub (http://bit.ly/2yeoJ9H).
People can get involved by sending Inenco the challenges they face, using the hashtag #InencoHub across social media. The company will be inviting some of the best minds to come together to help debate and solve the biggest challenges through The Bright Spark ‘Energy Hackathon’.
Energy is set to become increasingly important for all sectors, but in particular manufacturing, in the coming years. With Inenco’s research revealing that over 70% of energy departments in the sector have been in operation for over a decade, now is the time to take stock of what your organisation is doing in terms of its energy usage, and look at ways you can harness technology to reduce your bills, improve your efficiency and help reduce your carbon footprint.
