Energy optimization: a prerequisite for a low-carbon future – Part 2

In Part 1 of this blog series, we discussed the need to decarbonize the economy and adapt to a changing energy landscape and introduced energy optimization. We outlined, at a high level, some of the key activities required to assess and execute on ideas for energy optimization. In this article, we'll touch on some of the key opportunities that are most relevant for companies looking for ways to decarbonize their operations, enhance competitiveness, and reduce costs.

Monitoring and targeting using energy management information systems

A commonly overlooked aspect of optimizing energy use is in leveraging a combination of energy and operational data to understand the relationship of individual processes and equipment on energy use and costs. Examining process variability and controlling it based on targets is a fundamental aspect of process optimization and control, however energy is often left out of the equation.

Implementing and leveraging energy management information systems (EMIS) and statistical methods can equip operators and managers with the tools to manage processes for better operational and energy outcomes. An EMIS ensures that energy information is monitored, collected, and made available at various levels within the organization, for different users and applications, such as operations monitoring and corporate reporting.

Optimizing equipment efficiency

Replacing equipment is often where companies begin when tackling efficiency improvements. However, replacing functioning equipment can come at considerable cost and risk. Furthermore, it must be ensured that performance of new equipment adequately meets operational needs. For large capital projects, a thorough assessment of implementation feasibility should be undertaken to understand costs and risks, and to obtain greater certainty on the expected efficiency gains. Equipment at its end-of-life can often benefit from replacement with newer higher efficiency models, however certain equipment that may be older but is well maintained may function nearly as well as new equipment. In other cases, there are new technologies that can provide a great leap in both performance and efficiency, such as replacing incandescent or fluorescent light fixtures with LEDs or implementing variable speed drives on motors and fans. Additionally, maintenance and operational practices for current equipment should be examined. Often, simply changing a control setpoint or assessing and fixing broken or malfunctioning components can be a low-cost way to achieve a quick payback. Compressed air and steam systems are common sources of wasted energy, especially in older installations which can typically be corrected in a cost-effective way.

Fuel switching

One of the most significant ways that organizations can work to reduce their GHG footprint is in changing energy sources from fossil fuels to a low-carbon alternative. Electrification is typically the simplest example, with electric heat pump systems replacing fossil-based heating and an increasing selection of electric vehicles enabling the electrification of mobile equipment and fleets. The use of biofuels or even hydrogen to offset liquid fuels or gas used in combustion engines or process heat is another area of opportunity. This can be a complex endeavor requiring a thorough understanding of the performance of equipment based on different fuel alternatives or mixes. As an area of emerging technology, there may be external funding available for these types of projects depending on the jurisdiction.

Alternative energy sources and energy storage

Energy consumers are increasingly looking to procure cleaner energy sources, including through supplying a portion of demand on-site through renewable energy or cogeneration. Self-generation also provides increased flexibility for load shifting and managing peak demand, which can significantly reduce energy costs for customers who pay high-demand charges. Costs of renewable energy technologies have decreased significantly over the past decade, enabling them to compete against conventional supply in many scenarios.

Organization and management systems

One of the most significant missed opportunities in many companies for achieving sustained and continuous improvement in energy management is in the lack of an overall management system for energy, and a lack of consideration for energy at the strategic, organizational, and business processes levels. Many companies have evolved to adopt management systems for quality, health and safety, and environment, and in such organizations, these priorities become part of the corporate culture. ISO 50001 exists as a standard for energy management systems that’s analogous to these other systems, defines the requirements for integrating energy management into a company’s policies and organizational structure, and for implementing processes for managing energy based on continuous improvement. Even if a company isn’t seeking to pursue certification in accordance with the standard, it provides a framework for best practices on which an effective management system for energy can be built.

Assistance and incentives

Governments have recognized that optimizing energy efficiency and decarbonizing the economy has broad societal, environmental, and economic benefits. As such, many incentive programs have been put in place to help companies seeking to make investments to improve their equipment, systems, and organizations to pursue energy efficiency and emissions reduction. Such incentives vary widely depending on region, and may be provided at the national, regional, or local government levels, or by utilities and NGOs. Incentives may include funding for energy audits and feasibility studies, as well as for capital projects. Some of the various types of incentives typically available include:

• Federal incentives. In both Canada and the US, there are tax incentives for businesses who invest in clean energy or energy efficiency, by allowing accelerated depreciation for example. Federal programs also exist to fund projects, often for emerging technologies or alternative fuels.
• Provincial/state incentives. Many provincial or state incentives are delivered through local utilities, including project funding, equipment rebates, or tariff-based incentives for renewable energy. In some cases, provincial or state tax credits may also be available.
• Technical support/services. Many utilities offer programs that provide direct technical assistance in the form of audits or regional energy manager programs.

The pursuit of energy optimization presents companies with a myriad of opportunities, ranging from replacement of equipment, to evolving management systems. To prioritize investments and ensure sustainable benefits, it’s important to assess and develop technical solutions that will meet both operational and energy goals, quantify the business case including available incentives, and have a plan for implementation that includes verifying and sustaining performance over time. An overall management system for energy should be considered as a prerequisite for achieving long-term goals for energy optimization and decarbonization, as it ensures alignment with corporate priorities, enables continuous improvement, and drives a cultural shift towards minimizing waste and cost while proactively identifying opportunities for innovation.