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Take Action or Energy Cost Will Soar as You Reduce Production

March 10, 2009
Companies must reduce the fixed component of their energy consumption

Many factories are scaling back production and experiencing remarkable increases in the energy component of conversion cost. The cause is clear and preventable. You can avoid this pitfall by taking immediate action to reduce the fixed component of your energy consumption. This is a common opportunity (and problem).

Failing to take action caused a dramatic increase in energy per unit of production at a large Chicago-based operation last fall. Within that production facility, a 65% reduction in output resulted in only a 10% reduction in energy usage; just 10%! That small reduction in energy, paired with the large reduction in production, resulted in a 257% increase in energy per unit of production.

Figure 1: Energy Component Cost Skyrockets During Production Cut

An analysis determined that 69% of the energy consumed in October 2008 was used during plant-idle periods. So only 31% of the purchased energy was used during production. Imagine the financial result if 69% of labor and material costs were incurred while producing nothing.

The culprit is fixed energy cost. Proportional reductions in labor and materials are realized when shifts are eliminated. However, a large fixed energy component causes much higher usage (per unit of production) than anticipated as production is reduced. The operators of that Chicago area company questioned the utility meter accuracy; usage was high enough to cast doubt on the validity of the bill. Unfortunately, the meters were correct. They were left holding bills for energy they did not need.

Energy Usage and Production

Figure 2: Energy vs. Production with Large Fixed Energy Usage

Factories are often designed for 24/7 operation. Designers normally focus on maximum utility requirements and not the controls necessary to scale back usage when the lines are idle. The result is an energy usage profile like Figure 2. Note the significant energy requirement at zero production -- that represents the fixed cost.

Labor, material and energy usage must all show a relationship to production. Labor and material costs often do correlate; energy is the opportunity.

Some facilities require energy for refrigeration or freezers that will not correlate to production; in these cases, a fixed component as high as 50% may be acceptable. However, many facilities can make significant improvements, as shown in Figure 3.

Figure 3: Energy vs. Production with Small Fixed Component

Most factories waste energy in one or more of the following areas:
  • Building ventilation
  • Compressed air
  • Space heating and cooling
  • Lighting

Building Ventilation

Ventilation maintains acceptable atmosphere -- people need fresh air. However, excess ventilation serves no useful purpose and can cause energy waste by heating or cooling large amounts of outside air. The key is to know your ventilation requirements and exactly meet them. No more, no less.

Demand controlled ventilation is best in office areas. In this case, sensors monitor carbon dioxide (CO2) levels and control make-up air to maintain a maximum allowed CO2 level. Ventilation is also needed in factories to maintain temperature levels, expel smoke, dust or excess moisture.

Ventilation requirements are usually not constant. More or less ventilation is required depending on the level and nature of production activity. Again, the key is to know your ventilation requirements and exactly meet them. No more, no less. You should:

  • Make sure exhaust hoods run only when necessary
  • Fix economizer and ventilation controls (20-30% are usually bypassed or otherwise not functional)
  • Know your ventilation requirement (total cfm or m3/h) under various operating conditions (How many air changes per hour do you need?)
  • Verify that the requirement is being served -- no more, no less

Compressed Air

Air compressors required for production should be turned off when the plant is idle. Too often, large compressors are left running to accommodate a very small requirement for maintenance activities. These oversized units mostly blow air out of leaks in the distribution piping and provide air to idle production equipment, lacking the proper valves to stop waste. As much as 30% of compressor load is not providing any benefit to the plant. Consider purchasing a small compressor to use for maintenance activities when necessary.

Air compressor electric loads are a significant contributor to inflated fixed energy usage and must be addressed.

Space Heating and Cooling

Make sure thermostats are set back to avoid heating or cooling when not necessary. I have conducted midnight surveys and observed air conditioned offices so cold there is condensate on the windows with not a person in sight to enjoy the comfort.


Light fixtures in many facilities are simply installed in a grid pattern to flood the interior with light, without regard to specific requirements. This is a luxury we can no longer afford. Modern lamps, motion sensors and timers make it practical to provide all the required light without wasting energy on light that is not needed.

Take a walk around your facility at night and on the weekend. Note lighting levels and identify areas being over served. Also, do not overlook lighting maintenance. Light levels can often be increased with no additional energy by cleaning the fixtures.

Finally -- Take a Walk

Take a walk around your facility at midnight and on a weekend. Look for;

  • Compressed air flowing to idle production equipment or leaking
  • Lighting in unoccupied areas
  • Constant lighting in areas only intermittently occupied
  • Unnecessary ventilation
  • Unnecessary heating or cooling
  • Idle production lines with support equipment still running

In these challenging economic times, we are all tasked with doing more with less. One of the ways that you can do this is by avoiding energy expenses that are not necessary. Your goal is to reduce fixed energy cost as much as possible. You will see a dramatic reduction in energy consumed per unit of production during periods of low activity, and also enjoy the benefits of lower energy costs at all levels of production.

Paul H. Stiller, PE, CEM, Summit Energy which is a global provider of energy procurement and management solutions.

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