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Soaring power prices are undoubtedly harming industrial operations around the world. Energy inflation has taken its toll through cost increases, contract constraints, labor shifts, and supply issues. High fuel costs have even caused some factories to curtail production or shut down altogether.
And the short-term forecast isn’t looking any better. Over the next two years, McKinsey & Company estimates that 57% of European manufacturers won’t be able to continue reducing their gas consumption while still maintaining their current output levels.
In process, hybrid, or discrete industries, the rising cost of energy and fuel supply uncertainty are having a direct impact on the bottom line and operational activities which can lead to:
- a shrinking market share
- job losses
- relocation of operations to countries with lower energy costs (where possible)
- manufacturing constraints that disrupt downstream supply chains (including other manufacturers, distributors, retailers, and consumers)
Most business leaders recognize that the challenges created by rising energy prices will remain a long-term obstacle to business growth.
A prescription for cutting energy costs
Forward-thinking industrial leaders are actively developing transition strategies to dramatically increase energy savings opportunities across their operations now and to brace themselves for a volatile future. Three steps can help drive down energy consumption and related costs:
- Tap into technology funding: On the energy supply side, short- and long-term government initiatives can help lower fossil fuel dependency by making it more affordable for companies to deploy renewables and electrify their processes. On the demand side, they can facilitate the digitalization of operations and new energy efficiency programs. The combination of these subsidies and the actions taken by individual organizations can help industries control their costs while mitigating energy insecurity today, as well as helping them to achieve their green energy targets to secure a more resilient future.
- Conduct energy audits: Audits are the first step in an effective energy management program by establishing the status quo. Energy audits can uncover deficiencies in energy-consuming systems such as pumps, ventilation, lighting, compressed air, steam, refrigeration, HVAC, and process machinery, and help identify and prioritize areas for potential energy savings.
- Measure and monitor: To drive improvements, you will also need detailed energy consumption measurements to determine a baseline. Connect and automate your assets. Then, using digital tools, you can monitor and analyze the effectiveness of your energy improvement efforts against the benchmarks.
So, which actions drive the most energy savings? Success really depends on a mixture of decarbonization – which facilitates a transition to behaviors that improve energy efficiency – and energy management strategies that are unique to your operations. As an expert in industrial automation, power systems, and energy management, Schneider Electric works with industrial enterprises worldwide to help them digitalize and decarbonize their operations.
A case in point
Take Henkel, for example. The global manufacturer of laundry and homecare brands aims to make its production facilities climate neutral by 2030. This means optimizing its processes and operations to conserve valuable resources wherever possible.
Henkel implemented an EcoStruxure for Consumer Packaged Goods solution for its Persil powder laundry detergent line. This included ProLeiT by Schneider Electric’s Plant iT control system and leading-edge industrial software from AVEVA. The software solution improved the energy efficiency of the spray drying process – the most energy-intensive production stage – by 3-5%. For operations on the scale of Henkel’s, that amounts to considerable savings. Martin Päzold, Head of Engineering and Maintenance in Henkel’s Laundry and Home Care Production department, Düsseldorf, recognizes it as “a significant leap in the right direction in terms of sustainability and energy neutrality.” It also demonstrates how the right digital tools can squeeze the waste out of your systems.
For more information
To learn more about how Schneider Electric can help industrial enterprises maximize energy efficiency, download the new e-guide.