Putting the focus on energy28 February 2018

The development of an energy efficiency programme has many direct and indirect benefits. It can significantly reduce a manufacturer’s energy use per unit of output, and thus the unit costs to ensure persistent profitability, and it can lead to markedly improved operational and financial information, such as activity-based costing, as Mark Venables discovers

According to Lorcan Anglin (inset right), head of optimisation at energy consultancy Inenco, most UK businesses can expect to see their energy prices increase by 25% by 2020 and they’ll continue to rise into the future, so an energy efficiency programme is the only logical way to mitigate these increases. It will, of course, reduce carbon emissions, too.

“There are many approaches on how to start implementing energy savings measures, and it is essential to define how much and where energy is being used throughout the organisation’s operations,” Anglin explains. “Energy efficiency programmes can include demand side response, which, importantly, will inform long-term decisions on other electrical loads, such as electric vehicles, as well as helping to predict future energy strategy to accommodate the changing energy supply future.”

An organisation will also need to establish whether it has the internal resources required to deliver an energy efficiency strategy to mitigate the cost increases. Engagement with external consultants might be necessary to help determine which solutions are most appropriate, and how and when they can be implemented. The potential of the external resources to deliver the objectives needs to be assessed, in conjunction with compliance schemes, such as ESOS Phase 2, CCA, CRC, and energy management approaches, such as ISO:50001 and Lean Six Sigma. There may be significant cost synergies to be achieved by adopting a holistic strategy.

“There will be plenty of opportunities to save energy, and many of them will be low-cost or won’t cost anything at all – for example, some of the measures identified might be as simple as turning off lights and machinery when they’re not in use,” Anglin says. “Others will naturally require investment, such as upgrading manufacturing equipment, installing new HVAC systems and fitting LED lighting, but they might soon pay back in energy savings.

“Staff awareness and engagement are crucial to making long-term changes and achieving savings, so we recommend getting employees on board through regular communication, such as team meetings, company newsletters and energy-efficiency posters. It might take time to change procedures and staff behaviour, but there might already be some energy-efficiency ambassadors within the business.

“Consumers with flexible control of their equipment should also remember they are well placed to earn revenue from helping the National Grid to keep the system balanced. Many organisations have flexible assets that can be used for demand management – where consumption is turned up, down or shifted according to their needs. Examples of appropriate assets include refrigeration equipment, compressors and on-site generators. Understanding when and how to reduce consumption and navigate the different opportunities can be complex, but, by reviewing consumption patterns and understanding critical business processes, Inenco can identify when and how to reduce consumption, or switch to on-site generation, without affecting operational performance.”

Benefiting from demand response
Chesterfield-based United Cast Bar, a leading foundry producing up to 45,000 tonnes of continuous cast iron bar annually, is benefiting from the adoption of Firm Frequency Response (FFR), a revenue- generating scheme that forms part of the National Grid’s broad DSR (Demand-Side Response) portfolio. Facilitated by Endeco Technologies, an aggregator of smart grid optimisation solutions, the move is already yielding a revenue for the foundry, a sum that could conceivably rise further in the future.

Despite its success in the marketplace, the company’s managing director James Brand is always on the lookout for additional revenue streams and, upon discovering a little about FFR, decided to investigate further.

“We are members of the Cast Metals Federation (CMF) and I recall seeing some posts on LinkedIn relating to FFR,” he explains. “I dug a little deeper and it seemed like a good way for United Cast Bar to earn extra income in a manageable format.”

In simple terms, FFR is the generation or removal of sufficient load from the National Grid to stabilise frequency. The grid is prepared to pay such high rewards as it has an obligation to ensure that sufficient generation and/or demand is held in automatic readiness to manage all credible circumstances that might result in frequency variations. To ensure the success of such schemes, the National Grid offers those that participate in the potential to earn extra income from assets by automatically adjusting power consumption in real-time.

The financial and operational benefits for participating companies can be very significant, with sums of up to £70,000 achievable for every megawatt (MW) of average on-site energy consumption saved. This is in return for around six (on average) ‘turn-down’ events per year, lasting for a maximum of 30 minutes each.

“The opportunity to earn sums like this for a controlled risk meant I was prepared to take it to the next stage and the CMF put me in touch with Endeco Technologies,” Brand adds. The company duly responded with a visit and delivered an informative presentation. After further discussions with his management team, Brand decided to set the process in motion.

“We agreed a certain amount of contract flexibility with Endeco Technologies, including our preference to amortise the hardware and software over the first two months. This meant that, by the third month, we would be generating the full income.

“There are other benefits, too. “For instance, Endeco has created a personalised optimisation dashboard that presents data such as energy consumption, which is great for our own energy and asset management plans.”

Smart meters: beyond the home
Years of government initiatives and advertising campaigns by energy suppliers have changed people’s behaviour towards energy efficiency. As a result, many of us have invested in smart meters to monitor the amount of electricity we use at home, so we can reduce our energy bills. However, smart meters are becoming increasingly common in industrial applications.

Since 2010, the UK government has been increasingly proactive in convincing businesses to operate more energy efficiently. This culminated in the creation of the Energy Act 2013, which includes a financial incentive for lasting reductions in electricity demand.
For businesses to achieve this, facilities managers must first invest in smart meters to accurately monitor and ultimately reduce their electricity usage.

Instead of simply connecting meters and neglecting them, as many of us do, it is important that managers use these to gain insight into not only energy usage, but also power quality.

“Modern smart meters can tell engineers how much reactive power (kVArh) is generated from a plant’s energy supply by identifying the difference between working power and total power consumed,” explains Steve Hughes, managing director of power quality specialist REO UK. “Reactive power is the extra power consumed in a circuit that is not useful. It is created as a result of normal impedance in a system and, in effect, it is a total of the amount of wasted power in a system that the user still needs to pay for.

“To tackle high levels of reactive power and improve overall efficiency, business leaders should invest in equipment to safely filter out reactive currents from systems. For example, the REOWAVE passive CNW 898 filter is an industrial unit that can reduce reactive power to improve overall power quality and drive down energy bills. It can also increase the service life and reliability of electrical systems in the process.”

However, reactive currents are not the only problem that plant managers need to be aware of. As counterproductive as it may seem, smart meters can actually generate their own power quality problems in unprotected electrical systems. Smart meters transfer data over power lines using ripple control technology, which has been linked to electromagnetic interference, or EMI. In effect, the very device being used to help improve energy efficiency is itself contributing to problems that increase wastage.

EMI caused by smart meters is indicative of a growing problem in the industrial sector. The rise of the internet of things (IoT) has led to plants becoming increasingly reliant on electronic devices transmitting data.

Conclusion: invest and save
Investing in smart meters is just the first step that engineers and managers should take in driving down energy costs and improving efficiency. If businesses want to benefit from the financial incentives offered by the UK government, they must ensure that their systems can effectively act on the insight provided by smart meters.

Adam Offord

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