With the economy still challenging and competitive pressures continuing to rise, reducing expenses is imperative for industrial businesses. Yet many underestimate or neglect a key source of savings – the electricity bill.

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Fig. 1. A diverse energy-management strategy will create more opportunities to save and be less risky than a single, aggressive measure.


You may be wise to watching the demand meter or shifting heavy loads to off-peak hours, but those are not your only options. With advanced energy-management technology, you can automate control of energy use so that your facility runs at optimal efficiency, you pay the lowest possible rates, and you can participate in incentive programs that pay you for unused kilowatts.

Even the most energy-intensive businesses can cut energy costs without compromising production or quality. The key is to take full advantage of the load-shedding strategies that an advanced energy-management system enables: demand control, demand response, dynamic pricing optimization and energy efficiency (Fig. 1).

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Fig. 2. Random, coincidental spikes in kW result in high peak-demand charges. An EMS can shift or delay kW use, lowering peaks while protecting site productivity.

Energy Cost-Reduction Strategies in Brief

Demand Control Demand control is a strategy that allows almost all industrial facilities to use energy more efficiently by managing peaks and valleys of energy demand. An advanced energy-management system (EMS) allows you to do this safely by strategically directing demand reductions through a collection of selected loads to achieve the desired kW reduction while maintaining productivity (Fig. 2). The savings can be significant. Peak-time energy use can account for as much as 40% of an industrial user’s electricity bill, and avoiding these spikes can reduce the overall bill by as much as 15%.

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Fig. 3. Using an EMS to control demand response participation will increase kW participation and lower risk of under/over performance.


Demand Response This is a demand-reduction strategy being implemented by utilities and power-system operators across the country. Demand response (DR) programs let you earn money by curtailing your electricity use on demand. For example, on an unusually hot summer day a utility might notify demand response participants that it needs them to curtail their usage by an amount specified in their participation contract.

There are two types of DR programs. In standby/reliability programs, you commit to specific load reductions when the grid is under stress. These infrequent events often last two to four hours (Fig. 3). Prices are usually $30,000 to $60,000 per MW. In reserves/market-based programs, you agree to cut usage based on a set price. Events are more frequent than standby/reliability events and usually last one hour or less. Prices are typically about $40,000 per MW. Some of the more lucrative DR programs require automated communication between the energy users’ and supplier’s DR systems.

Dynamic Pricing Optimization
Many utilities employ dynamic pricing strategies, such as real-time pricing (RTP), that involve rate changes based on the market price of electricity, weather events or other conditions. These changes can happen with anywhere from just minutes’ to 24 hours’ notice, and in worst-case examples, power costs have jumped during an RTP spike to more than 100 times the normal rate. An advanced EMS lets you respond automatically to ongoing price fluctuations by shifting consumption to lower rate periods or reducing consumption during costly super-peak times.

Energy Efficiency
Energy efficiency – not only using less energy, but also using energy at the least costly times – is often a byproduct of implementing demand control, demand response and dynamic pricing programs. These initiatives typically reveal best-practice opportunities for eliminating waste and optimizing use.

Only a small fraction of industrial businesses takes advantage of these prime saving opportunities, but the few that do demonstrate the potential. For example, the Blackhawk de Mexico foundry in Santa Catarina, Nuevo Leon, Mexico uses Powerit’s Spara technology to decrease its kilowatt-hour usage 10-12%, reduce peak period demand usage 37% and save $20,000 per month on its power bill.

Why Automation is Essential

Manually manipulating complex processes to achieve energy savings is difficult to impossible for most companies. It can also introduce human error and potentially compromise production. And the scope and types of loads that can be shed using manual approaches are limited, making participation in DR programs or response to dynamic pricing impossible or unprofitable.

An advanced EMS is essential to getting full value from the spectrum of load-shedding strategies, and the investment is more manageable than many facility operators expect. Depending on incentives available in your area and your implementation, it’s possible to achieve ROI anywhere from immediately to 18 months.

Many utilities offer incentive programs that cover partial or even full costs of systems needed to reduce energy consumption or manage peak demand. These incentives cover a wide variety of equipment and technology for applications ranging from basic energy efficiency to automating participation in DR programs.

Where incentive programs aren’t available, renting, renting to own and leasing often are attractive alternatives to outright purchases. These financing options increase purchasing power and lower the upfront investment, allowing immediate action on reducing energy costs, even when there’s no budget for new technology. Depending on the circumstances, businesses may be able to realize tax benefits through bonus and accelerated depreciation or investment tax credits and can even realize immediate positive cash flow.

An Advanced EMS at Work: A Real-World Example

Here’s an example of a typical demand control operation at a metal-casting foundry that is controlling energy demand from furnaces using Powerit’s Spara EMS:

1. The EMS’s real-time algorithm predicts that the foundry’s current energy use will exceed its setpoint by 200 kW. The facility needs to shed loads.

2. The system determines which loads (furnaces, baghouse fans, etc.) are enabled for reduction at this moment. These loads are available for curtailment.
3. The EMS stages curtailment actions based on the preferred order that has been set in the system. Furnaces A and B have a priority of 1 and 2. Furnace A has 150 kW safely available for reduction, so the system powers it down accordingly. It then powers Furnace B down 50 kW to get the remaining reduction needed.

4. Each furnace can operate at reduced power for only so long without disrupting operations, and that time has been set in the system. The EMS monitors the reduction time and sees that Furnace A has hit that point. It releases Furnace A and further reduces Furnace B to get the rest of reduction needed.
Note: Time as a constraint is a simple example of a rule that can be integrated into the system’s decision-making process. Rules can also be fairly complicated and logic based (if pump speed is X and tank level is Y then the agitator can be curtailed to speed Z) or triggered by schedules or production factors.

5. Now you’ve hit your goal. All loads are released according to the procedure set by the facility.

What happened here? The foundry’s processes were interrupted, but they weren’t disrupted. The changes were defined in advance as acceptable power reductions in return for energy savings.

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Fig. 4. An intelligent energy-management system verifies savings actions with a real-time connection to the utility meter.

What to Look for in Energy-Management Technology

Key features of the best energy-management systems are:

  • Ability to take direct control of the loads – within parameters you set – so that no human intervention is required.
  • Seamless integration with existing systems and the ability to extend their functionality.
  • Capacity to connect with many loads in order to take maximum advantage of potential savings.
  • Access to real-time data in order to analyze and predict events.
  • Rules-driven, process-protecting routines tailored to your operations that can manage an infinite variety of industrial processes, limitations and thresholds.
  • Wireless input/output, which eliminates the need to run costly conduit (often a disruptive and time-consuming process) and provides access to hard-to-reach places, ensuring that the maximum number of loads can be controlled.

Beyond the technology itself, look for a vendor that can assist in identifying and evaluating utility programs, rebates and incentives. The vendor should also have expertise in your industry so that they’re familiar with typical processes and equipment and can share best practices based on past projects.

With the right technology partner, industrial users can significantly reduce previously uncontrollable energy costs. By being able to aggressively manage a monopoly-controlled resource that continues to rise in cost year over year, you can not only cut costs but also gain a competitive advantage (Fig. 4). In manufacturing, many companies can make a widget. It’s the company that makes the widget most efficiently that wins the market. IH

For more information: Contact Bob Zak, president and general manager of Powerit Solutions North America, 568 First Ave South, Suite 450, Seattle, WA 98104; tel: 866-499-3030; fax: 206-621-8545; e-mail: info@poweritsolutions.com; web: www.poweritsolutions.com

SIDEBAR: Controlling Energy Use from Heat Treaters

Vacuum heat-treating furnaces offer the best opportunity for demand control in heat-treating operations. The electrical load on this equipment is highest and most available for demand control during the ramp stage, when the load is heated from the ambient temperature to the soak temperature.

With an advanced EMS controlling vacuum heat-treating furnaces, demand control might work like this:

1. The EMS is connected to the temperature-control system, handling the heating profiles of the furnace. Through this communication link, the EMS often knows the target and actual temperatures for both the furnace and the product and what stage (ramp or soak) the furnace is in.

2. The EMS constantly monitors the plant’s main electrical meter and calculates the demand reduction needed from heat-treating furnaces to avoid breaching the peak demand setpoint.

3. The EMS polls the connected furnace controllers to identify which ones are operating and in ramp mode, making them available for curtailment.

4. Furnaces in ramp mode receive a signal from the EMS with a command to reduce heating (and therefore kW). The EMS follows strict rules defined by the operator for how much power can be reduced and for how long. It also tightly controls the kW reduction to make only the minimum reduction needed to avoid the peak level. Furnaces can be prioritized based on treated parts, production schedules and so on. Once the EMS calculates that kW reduction is no longer needed, the furnace is released to resume heating according to its recipe.

Note: Demand control should not be allowed or should be very tightly controlled during the critical soak phase, which requires a precise temperature for a prescribed time in order to ensure that you get the desired mechanical qualities. Other areas worth exploring for demand control include mass heating used for rolling operations and induction heat treating or annealing that takes place in a normal atmosphere.