Finding the Root Cause of Energy Consumption

Energy. We need it to power the cars we drive, the houses we live in, and the places in which we work. Our need to consume energy has wrought many ways to generate it in order to produce the goods and services that we need to survive. While we work to uncover faster, cheaper, and cleaner ways to create the energy we need, much could be achieved if we looked at our current consumption practices and made a more diligent effort to be more scrupulous, more efficient and more green.This is true in all aspects of our lives, but is perhaps the most relevant in the industrial and manufacturing businesses, where energy usage is at its highest. The Center for Strategic Economic Studies (CSES) states that in advanced economies, industry accounts for about one-third of total energy consumption1.

Table 1

We’ve all heard of the Lean reference to “the hidden factory” – the additional capacity that could be gained when people and equipment function at capacity. The same rationale can be applied to how we manage our energy systems, finding and eliminating excessive usage and waste.  Often, a rudimentary, high-level look at a facility’s overall energy consumption – with the right set of “lenses” – can yield dramatic results. 

I recently visited a client site that required a cold warehouse (4oC) for product storage. A refrigeration system was required to maintain this temperature. The facility also used steam in many process steps. In some sections of the warehouse, non-insulated steam piping ran in and out. Energy was being used to convert water to steam, and energy was being used to cool the ambient temperature of the warehouse. The non-insulating steam piping was heating the warehouse air and the warehouse air was condensing the piped steam. That’s like having the heat and the A/C on at the same time! After some analysis, it was determined it was not cost-effective to reroute the piping, and insulation was deemed appropriate.The optimal solution would have been to properly design the steam piping in first place. 

Another way to reduce your overall energy costs is to focus on times of usage, not overall consumption. How? Understand how your facility is billed for the energy it consumes and determine the hours of peak usage. Does high-load equipment need to be operated during these times?  Depending on your unique industry and business needs, adjusting times of operation may or may not be feasible. However, if you can manage your high-load production and utilities schedule for off-rate hours, it can dramatically affect your overall bill. A recent client with a high number of planned shutdowns and startups was able to quantify significant  savings by simply shifting the time of their ramp-ups a few hours to push them into an off-peak period.   

The two previous examples may appear as “no-brainer” type solutions, however I’ve  seen many such opportunities in industries ranging from metals to pharmaceuticals to the U.S. Navy. What about steam leaks in your facility?  As always, define the problem and measure the estimated ROI that is based on the amount of existing leaks vs. the cost of labor and lost production to repair them. A word of caution – I have seen all too often an over-exuberant plant manager read an article about the dollars associated with annual steam leakages, ask operations and maintenance folks to tag every steam leak they could find, and then not be willing  or able to shut production down in order to adequately address them. I’ve seen tags more than two years old. This does nothing to reduce energy waste, and only deflates employee morale. There are plenty of free steam loss calculators on the market, like this one from American Plant Maintenance 2.

In addition to steam leaks, energy savings can be realized by reducing compressed air leaks; improving compressor, turbine, and heat exchanger efficiencies; requiring properly written and followed start-up and shut-down procedures; and using thermography to search piping, steam traps, and buildings for improper insulation,etc. You can find a thorough review of energy reduction in stationary equipment by Ainsley Jolley with the CSES at 3

It is important to note that realizing energy savings may not be the most rewarding endeavor for your facility.  We all know that energy is a hot topic and being “green” is a buzzword these days, but it is important to understand your facility’s overall costs and determine what problems human capital – which now more than ever is stretched thin – should be addressing first. 

When it comes to problem solving, we often fall short. We are all too often concerned with the immediate problems and issues around us, without taking a systems view and determining where the true savings really lie. What if energy costs aren’t your biggest problem? Again, everything depends on reliable data. In analyses that I’ve conducted for clients in the metal refining industry, energy costs run 30-35% of overall production costs. Any savings that can be realized here will have a dramatic effect to the bottom line.

In other industries, however, like food and kindred products, I’ve seen energy costs under 10% and direct material costs as high as 75%. As always, the Pareto principle applies – prioritize and go after the big stuff first! If I – through insight, effective analysis, and flawless execution – can reduce these costs by 1/3…which one should I go after?  If you are not in a position to make that type of decision within your organization, gather the data that you can and influence those around you. Your organization will thank you for it.

For information concerning your specific industry’s average energy usage, reference a study published by the National Energy Education Development (NEED) Project, at For more information about NEED, visit 4

There are several government-backed programs whose purpose is to identify and reduce industry energy use. The Industrial Technologies Program (ITP) – a part of the U.S. Department of Energy’s Office of Energy Efficiency and Renewable Energy – has created the Save Energy Now initiative, with the goal of driving a 25% reduction in industrial energy intensity over the next 10 years. They offer no-cost energy assessments and a variety of other resources. For more information, you can contact the ITP for energy-efficiency initiatives at 5. To find more information about Department of Energy, Energy Efficiency and Renewable Energy (DOE EERE), visit 6.

The DOE’s Save Energy Now is also a member of the U.S. Council for Energy-Efficient Manufacturing, along with

  • U.S. industrial companies
  • American National Standards Institute (ANSI)
  • U.S. Environmental Protection Agency (EPA), ENERGY STAR reduction program
  • U.S. Department of Commerce (DOC), Manufacturing Extension Partnership
  • Texas Industries for the Future  (Texas IOF)

Together they are working to create Superior Energy Performance – a voluntary, industry-designed certification program that expects to be fully launched in 2013. For more information, visit their Web site at You can also
read the program’s flier 7.

Systematically evaluating the energy consumption of your facility and putting adequate systems, structures, and procedures in place to ensure maximum performance and minimal loss should be the goal of any manufacturing organization, at all times. Given the current uncertainty with global markets, now is the perfect time to begin - or continue - the journey towards energy consumption excellence.

1 CSES  Centre for Strategic Economic Studies (CSES) (2004), New Technologies, Industry Developments and Emission Trends in Advanced Countries, Melbourne.
2 Steam Loss Calculator from American Plant Maintenance.
3 Jolley, Ainsley.  Technologies for Reducing Stationary Energy Use.  March 2006.
4 National Energy Education Department (NEED) Project’s Intermediate Energy Infobook.  NEED Project website
5 ITP Industrial Technologies Program,
6 U.S. Department of Energy, Energy Efficiency and Renewable Energy.
7 Superior Energy Performance.  Program:
Program Flier:

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