Canadian Manufacturing

6 steps to effective energy management in manufacturing

by Anatoli Naoumov   

Cleantech Canada
Manufacturing Operations Energy

If none of the top guns care about energy management, nothing significant will come out of it

The creation of an energy consumption baseline must be the starting point of any energy management effort. PHOTO: Fotolia

So how do we achieve effective energy management in a manufacturing setting?

Follow these six steps.

1. Effective energy management must have a C-level champion

Practically speaking, if none of the top guns care about energy management, or at least energy efficiency, nothing significant will come out of it.


There can be implementations and installations of energy efficiency projects, energy conservation programs and initiatives, reports and presentations, even incentives and bonuses, but the company will miss on a major opportunity to reap strategic benefits offered by effective energy management: differentiation and cost.

2. Energy is everywhere, so should be energy management

Anatoli Naoumov, chief energy waste buster at GreenQ Partners

Your senior leaderships’ job is to set up a cross-functional team to figure out what role energy plays in the value creation chain and what changes will create the most bang for your buck. The team must identify current consumption and its key drivers, develop energy use reduction strategy and set targets. Then targets should be linked to performance evaluation of unit managers.

Energy is procured on the production floor, not in the corner office.

To make energy efficiency results possible, people on the production floor must have an understanding and real-time visibility of energy consumption. To make efficiency results happen, people on the floor must have the means and authority to take action and share benefits from achieved results.

3. Set energy consumption baseline and track energy usage regularly

The creation of an energy consumption baseline must be the starting point of any energy management effort. This understanding will direct energy efficiency work and enable actionable evaluation of results.

In the absence of a baseline, how else are you going to determine and report results? Comparisons to last year’s bill is a risky idea, especially for the energy manager’s year-end bonus. I mean, just try predicting your utility bill after the following: high-efficiency motors installed on the production floor; production volume increased by 5%; size of final product changed by 12%; tariffs grew by 5%; reject rate varied between 5% and 8%. Were I in charge of energy efficiency, I would not like my performance evaluated against the utility bill.

Tracking of energy efficiency project results may make the difference between triumph and disaster in the boardroom. Accurate energy consumption tracking along with the recording of any changes in factors that drive consumption are the keys to demonstrating results that can withstand any boardroom criticism.

Besides, accurately tracking energy use and acting on deviations not only routinely leads to reduced consumption, but also uncovers operational issues, quality risks and performance losses.

4. Distinguish between utility bill and utility consumption

The utility bill is determined by consumption and by tariffs. While consumption of energy is determined by production needs, not all kWhs cost the same. Natural gas can be procured at substantially different prices. Consider both energy procurement and energy consumption to find ways of lowering that utility bill.

Consider simple examples:

• Over-cooling a frozen food warehouse overnight at lower nightly rates will lower consumption during peak times, or reduce peak demand
• A staged start of major machines will decrease demand
• An accurate forecast of natural gas consumption will allow buying it in lower-priced blocks

5. Recognize value beyond energy cost reduction

Energy does not disappear; it powers up machines that either create value or create waste. Non-energy waste routinely exceeds the cost of wasted energy.

Consider examples of energy trouble signals at an industrial bakery:

• Increased electricity consumption at the freezer may signal loss of insulation or an open door; both may lead to product loss (production, quality), slippery floor (safety) and mold (sanitation)
• A compressor coming online during non-production hours signals air leaks or unauthorized operations
• Increased electricity consumption by a dough mixer at stable production may mean the wrong recipe (quality) or the need for preventative maintenance (stoppage)

On the positive side:
• Better lighting leads to lower mistakes in packaging and sorting
• Stable load extends the life span of motors and prevents stoppage

Energy management measures often create value for businesses even without a reduction in energy consumption. For example, power factor correction reduces electricity bills with no changes on the production floor. In the same manner, harmonics do not affect electricity consumption but may disable electronics, causing costly production stoppages.

6. Communicate results consistently

Stakeholders and employees nowadays pay attention to their company’s environmental standing, so make results public, visible and transparent.

Better yet, engage employees in energy conservation and link results to their paycheques, such as a $50 “energy conservation” year-end bonus. Proud employees demonstrate higher productivity and lower absenteeism, and stay longer with the company as well.

Anatoli Naoumov MBA, CMVP, is a managing partner and “chief energy waste buster” at GreenQ Partners. To avoid risk and hassle, to gain praise and power, while building, implementing and reporting energy efficiency projects in manufacturing, contact Anatoli at


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