From cost factor to success factor

In the manufacturing industry, energy costs account for up to 10% of the total production costs. In high-energy sectors, such as the steel or water and sewage industry, even up to 40%. To save costs and to avoid downtime, energy management is a must for any production manager. Those who think ahead plan for energy generation, storage and recovery.


"To remain fit for the future, the industry has to control and optimize the energy flow in plants and factories," emphasizes Florian Güldner, Director of Research at ARC Advisory Group, one of the world's leading consulting companies for the industry. After all, rising energy costs, new supply models and strict environmental regulations make energy-efficient production processes a decisive factor in competition – independent of the sector. Next to flexible and automated production, the targeted use of resources is thus a key topic. "For efficient production, companies must optimize their energy consumption. Using too much energy at the wrong time, unexploited potential or, in the worst case, downtimes, cost a lot of money. And in the end, nobody will pay you for this," says Güldner.

Production is an energy guzzler

"For a long time, too many industries have ignored energy consumption," Güldner acknowledges. The supply was secured and the prices low and stable. However, between the years 2000 and 2010, the final energy prices – for fuel, gas, district heat or electricity – increased by 70%. Long-term forecasts predict a further increase. This particularly affects the manufacturing industry. According to a study of the U.S. Energy Information Administration, this sector is the world's largest energy consumer, accounting for 51% of the total consumption. In Germany, its share is just under 30%. With that in mind, it is clear that the manufacturing industry plays a major role in climate protection.


"You can actually see the changes happening, both in the industry and in energy supply," Güldner says. However, the expansion of renewable energy sources, decentralization and digitalization also have an impact on the supply quality. The expert adds: "Modern control and storage technology are very important. These systems prevent changes in the energy supply from causing problems in production. In the best case, their energy management in a production hall is so intelligent that they make energy a success factor instead of a simple cost factor."

Realizing savings during operation

But where can plant operators realize hidden savings? "It is important to take a holistic approach and to make any energy flow completely transparent," explains Güldner. Look at the situation from every angle: energy generation, energy consumption of machines and plants, lighting and air conditioning of the factory.


As they drive almost everything, motors and engines are the industry's largest energy consumers, with about 70%. Innovative and efficient drive systems, such as the reluctance motor, help expose additional savings potentials by optimizing the energy efficiency.


Taking a holistic approach calls for considering the topic of energy as early as the planning phase. In product planning, for example: "If we know exactly how machines and plants will be operated in production, we can already detect hidden savings potentials in the design stage," explains Dr. Karlheinz Bourdon, Senior Vice President KraussMaffei Technologies. "Only well-designed products achieve maximum energy efficiency – and save up to 35 percent of energy."

Factoring in energy during production planning

Until now, energy has always been generated as required. "In the future, we have to be able to do this the other way around, too," Güldner states. "Companies have to use energy when it is available – insofar as this is possible." To remain fit for the future, plant operators have to consider four core topics for their energy supply: generation, storage, monitoring and control. This means, energy has to be factored in during production planning. Efficient plants can be planned in advance – for example by using simulation. "In some production scenarios, improved processes can help save up to 40 percent of energy," explains Michael Kratzert, who is responsible for engineering at Homag Group AG. "The secret is to not only optimize individual machines but to perfect the interaction of all plant components."


Intelligent power distribution

"Anyone responsible for a production line is also responsible for the topic of energy. Those who synchronize the two early on will have a competitive edge," Güldner describes the essence of energy management. Power generation and consumption go hand-in-hand with power distribution. Industrial plants require customized, safe and highly available solutions to prevent downtime. They provide the power distribution network with the necessary intelligence to balance increasing and yet fluctuating amounts of renewable energy being fed into the supply. Using the right technologies, production cannot only be planned with a forward-looking approach and optimized, it is also possible to make adjustments as required. And this is how energy transforms from a cost factor into a success factor.



Picture credits: Siemens AG

According to estimates, 42% of the worldwide power consumption can be attributed to the manufacturing industry – its current consumption over the last 40 years has increased three times as fast as the total energy consumption. However, the existing savings potentials are far from exploited. According to a study by Siemens Financial Services (SFS), these range from 19.1% in Russia to 14.2% in Great Britain and 14.5% in Germany. The International Energy Agency (IEA) has calculated that, with cumulated investments of 1.1 trillion US dollars, the industry could save 3.3 trillion US dollars in energy costs by 2035.

At the United Nations Climate Change Conference in Paris in December 2015, a new global climate agreement has been reached to limit global warming to well below 2°C. 196 countries, including the USA and China, signed the agreement.


The study "Connecting Possibilities – Scenarios for Optimizing Energy Systems" divides the most important countries of the world into five different categories – amongst others "energy-hungry" and "green pioneers." It assumes that the countries with the largest hunger for energy have the greatest influence on the future global energy landscape and will account for 42% of the planet's electricity generation in 2030.


Countries like China, Argentina, Brazil, Russia or Mexico are about to supply the large energy demand of their growing economies themselves. To do so, they need unhindered access to energy, if possible without any imports. By using coal as the main energy source, these countries are the main contributors to the worldwide CO2 emissions. Modernizing power plants, expanding the use of regenerative energies but also resource-saving energy management in factories and plants are the measures these countries need to take to tackle the climate targets set by the Paris agreement.

Subscribe to our Newsletter

Stay up to date at all times: everything you need to know about electrification, automation, and digitalization.