Energy Management

Who monitors and manages plant energy consumption?

Energy monitoring reveals where the money goes.

By Mike Bacidore, chief editor

With energy prices continuing to climb, organizations clearly have flagged consumption as an area that needs to be monitored and managed. In the United States alone, electricity prices have risen from $0.05/kWh on average to more than $0.07 during the past 10 years, according to the U.S. Energy Information Administration.

Complex industrial rate structures dependent upon peak demand periods are motivating organizations more than ever to determine when and where the power is going. But what are plants doing to minimize their costs, and who is keeping an eye on consumption and the energy spend?

David Lee, instrumentation technician specialist for the Ontario Clean Water Agency (OCWA) in Mississauga, Ontario, says it’s the plant manager who not only is responsible for the plant’s energy costs, but also has a vested interest in avoiding machine downtime with condition monitoring and proactive maintenance practices. “Because most of our clients are municipalities with tight budgets, most power monitoring decisions are based on ROI,” explains Lee. “When I say ‘plant manager,’ essentially that is an OCWA employee who takes complete operational ownership of the water and wastewater facilities for a municipal client. When I say he has a vested interest in the power monitoring, it is because by installing power monitoring and eventually reducing electrical costs, the client will see these savings. Of course, this increases the likelihood that the client would continue to choose OCWA as the operator of choice. One plant manager recently told me that if it were not for the power monitoring installed, he probably would not have been able to justify purchasing an energy-efficient $200,000 turbo blower.”

At different plants, energy-cost responsibility can sometimes fall on the shoulders of certain individuals or on groups, explains Zach Bryson, project manager, Keithly Electric, a contractor located in Seattle. “The typical individual might be a production manager, plant manager or engineering manager,” he says. “World-class manufacturing organizations will typically have an energy conservation or monitoring peer group that can be comprised of engineering, maintenance, production and plant management.”

Many plants have performance incentives that are based around production and total quality management, continues Bryson. “Goals are typically set via a measurable metric, such as cost per unit manufactured or average units processed/hr or plant production vs. plant availability,” he explains.

Marty Aaron, product line manager, software and meters business unit, at Eaton, says her company runs into a variety of people who are responsible for energy costs. “There are plant managers or facility managers,” she explains. “It might be the CIO or the CFO. We see it kind of split out, depending on the corporation or the business. CIOs more on the power quality side, given the charge to manage the facility. Way back when, the facilities guy or gal never talked with the IT guy, but that has blurred. In the end, it all translates to operational effectiveness and profit. All of those people have some type of incentive program in place to reduce costs or improve profitability or an ROI.”

The facility operations manager is typically responsible for overall costs, but may need to request access to the utility bills from the accounting department, explains Frank Healy, power quality product marketing manager at Fluke. “In other words, he may not have regular visibility into the utility costs for his operation,” he says. “When it comes to conducting an audit, the facility manager will engage his staff electricians to conduct the actual power monitoring.” Whether that same individual has a vested interest in avoiding machine downtime and proactive maintenance practices, it depends on the philosophy of the facility owner, says Healy. “Most facilities are now so lean that they can no longer afford reactive maintenance, where machinery is allowed to run-to-fail,” he says. “Now, facilities report they need to make due with or take care of what they have and are more willing to invest the time required for proactive maintenance. In facilities of that nature, yes, the facility operations manager makes the call to prioritize proactive maintenance activities on his staff.”

A system might be deployed to address reliability and monitoring. When it becomes evident this same system is also tracking energy use, a different type of user may want access as well.
A system might be deployed to address reliability and monitoring. When it becomes evident this same system is also tracking energy use, a different type of user may want access as well. Source: Schneider Electric

Greg Lado, energy solutions manager at Schneider Electric, says the size of the company often determines who’s responsible for energy costs. “Large companies tend to have a dedicated energy manager, but organizations that are smaller or growing have one person that wears many hats,” he explains. “In some cases, we see accounting get involved, too. But generally it seems to track with the size of the company and the number of stakeholders who need the energy and power information.”

Sometimes the group that cares most about energy consumption is different from the group that is tasked with keeping everything running, says Lado. “The power monitoring system ends up becoming the common ground between groups,” he explains. “For example, a system might be deployed to address a key goal like power reliability and monitoring. When it becomes evident this same system is also tracking energy use, a different type of user may want access as well. An example is a critical power user like a data center. Because reliability is the main concern in that type of an environment, oftentimes the operations person isn’t as interested in data center effectiveness and the equipment efficiency.”

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When gasoline goes over $3/gal, a lot of people become interested in energy consumption, explains Phil Kaufman, business manager, industrial energy management, Rockwell Automation. “In the past it would be the facility manager,” he says. “The plant manager would see those bills and go after the facility manager. Separating out the facility costs from the manufacturing costs helps. It’s always been thought of as kW and joules, and they didn’t understand those terms. We’re just trying to put it in terms that people will understand. The facility manager still is the king. He has it in his budget.”

That same facility manager is going to worry about some of the equipment, too, says Kaufman. “He’s going to be concerned with issues associated with condition monitoring and proactive maintenance,” he explains. “The plant manager and operation manager are going to worry more about machine downtime.”

Monitor the benefits

With rising electricity prices, power monitoring can facilitate various methods of cost savings, explains OCWA’s Lee. “Having real-time power consumption visible to operations helps create a culture of conscientious power use,” he says. “Power monitoring also aids in monitoring equipment. But at minimum, power monitoring installation costs should be compensated by the potential cost savings.”

In Ontario, there is now time-of-use billing, explains Lee. “Control changes can be made to defer operating a specific piece of equipment until the cheaper time-of-use period and operate at a lower cost,” he says. “Also, reducing the monthly instantaneous peak demand will reduce the peak demand premium in the utility bill. This is accomplished by spacing out the startup of plant equipment, where possible. Power monitoring can enable the comparison between the electrical utility billing and actually consumptions. Any discrepancies can then be discussed with the utility company.”

Power monitoring can bring a plethora of information to plant managers, engineers, maintenance personnel and operations personnel, says Keithly’s Bryson. “Peak demand can be identified and give the ability to shed load and shift production schedules around peak demand times,” he explains. “It can also help mitigate demand charges by scheduling times that large loads are run independently of one another. If a plant has two 1,200 hp fans and can shut one down before bringing the other on-line, they can realize large savings due to a reduced power demand.”

They couldn’t fathom that their consumption was that high. The equipment was working properly, but most companies don’t realize how high their baseline is.

– Marty Aaron

Monitoring also can help determine which loads within a facility are bringing power factor down and correct them accordingly, he says. “In some cases a 5 hp motor was replaced with a 10 because it was what was on hand when the 5 hp motor failed,” explains Bryson. “Underloaded motors typically will have a bad power factor. We have seen cases where THD has suddenly escalated inside of plants due to the installation of power factor correction capacitors on plants with large numbers of VFDs. It is important to select capacitors that are tuned for VFDs. If the capacitors are not harmonic currents can multiply exponentially in a electrical system. Detecting problems with the electrical system, harmonics, low voltage or flicker help to identify high-resistance connection that could lead to an arc flash incident or other catastrophic equipment failure, too.”

Eaton’s Aaron identifies four ways energy monitoring can impact a plant — financially, from a maintenance perspective, through reliability and in terms of good global citizenship. “Being able to reduce operating costs increases profitability,” she explains. “No one likes to be caught by surprise. For maintenance, a power monitoring system allows them to plan through the business cycle by being able to identify potential problem. Everyone wants their equipment running as close to 100% of the time. This allows them to maximize uptime and minimize downtime. Finally, the environmental impact has become extremely important, as well. This enables a corporation to be able to reduce energy consumption and minimize the carbon footprint.”

The power monitoring system provides a window into the operation, says Aaron. “A lot of companies have no idea what their baseline is,” she explains. “One customer implemented a power monitoring system, and they purchased our meters. They thought the meters were malfunctioning. They couldn’t fathom that their consumption was that high. The equipment was working properly, but most companies don’t realize how high their baseline is. Large companies have fairly complex utility rate structures. By being able to provide information that allows them to understand their usage or demand, they can make changes to their operation based on peak demand charges and how to avoid them. For example, it’s often surprising when companies are plugging in forklifts to charge them. Until it’s revealed, things like that aren’t so obvious. You may want to stagger your shifts at the plant.”

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A facility can have two different objectives in power monitoring — the quality of the power supply and the cost of the power supply, says Fluke’s Healy. “A facility supporting sensitive electronic controls must ensure a relatively pure power supply to those devices,” he says.” And, at the same time, a facility with numerous large loads and electronic devices is quite likely to experience load balancing issues and power distortion, both of which affect equipment performance and utility bills. Power monitoring is required to locate and trace any power quality issues in the power supply and to balance loads.” A facility can affect its power consumption two ways, he explains. “First, reschedule when large loads run, to take advantage of lower, non-peak kWh costs,” he says. “And second, add control devices to large loads to optimize them or upgrade to higher-efficiency models. Before doing either of those, power monitoring is required to determine the total consumption of a particular unit vs. the cost of operating a new model, or to determine the appropriate load schedule across multiple units.”

A well designed power monitoring system should address three main goals, says Schneider’s Lado. “Manage the energy spend, extend the life of equipment and help assure the reliability of the power,” he says. “Looking at these, each one has its own costs but all three combine to provide the total ROI for a power monitoring system.”

Energy cost reduction would be the obvious goal, says Lado. “Here, users manage the energy spend by using metering to track costs in real time,” he explains. “This approach gives you immediate feedback and allows for corrective action versus the surprise of a larger than expected energy bill which appears as many as 30 days after the fact. Additionally, the energy use can be put into a context that makes sense to the operation. Reporting energy use by KPI lets users manage energy cost in familiar terms to them. Energy can be related to production units, allocated by shift or by business segments within the facility. This type of reporting lets users spot waste, compare efficiencies and drive awareness for the behavioral component of effective energy management.”

Equipment utilization saves cost by possibly deferring an expense, continues Lado. “For example, let’s say a plant manager wants to expand production and add new load,” he says. “A power monitoring system allows for better decisions about true equipment capacity versus a manually gathered sample, which suffers from seasonality and lack of data points. He can then use this feedback from his monitoring system to understand true capacity, even possibly defer the expense of a transformer or substation.”

Lado says his favorite area of cost savings opportunity is related to power reliability — the main theme being that a continuous process needs to stay running. “Here the monitoring system is designed to be ever-vigilant and tasked with warning operators when things are out of tolerance,” he says. “The cost savings are enormous when you consider avoiding loss of production, scrap product, idle workforce, damaged equipment and possibly even regulatory issues.”

Rockwell explores the impact that power monitoring can have on a plant from two directions: consumption and power quality, explains Kaufman. “When we’re looking at power quality, we’re talking about asset health and asset management,” he says. “From the consumption side, we’re linking consumption with manufacturing information, whether the consumption is measured by kW/batch or kW/case. Then we tie that back into some aspect of asset management — the electronic signature of a manufacturing cell or an OEM piece of equipment.”