Following the government's announcement that under the Energy Bill, energy-intensive industries may be exempt from certain costs associated with the move to a low carbon economy*, the new legislation may offer some relief to the industrial sector that has already been hit hard by rapidly increasing energy costs. Here, Richard Beighton, VP of Industry for Schneider Electric offers advice to manufacturers looking to make the most of the Energy Bill.
When the government recently announced its plans for the Energy Bill, there was widespread uproar from many of the UK's businesses claiming that the measures would have a detrimental effect on an already fragile economy. However, for the industrial sector, many of the proposals offered a light at the end of the tunnel of ever increasing energy bills that have crippled many manufacturers for the last decade.
E.On's recent decision to increase energy prices by as much as 8.7% marked the last of the Big Six' energy companies to once again, increase the price of energy this year. For a sector that is energy-intensive, manufacturing has long been held to ransom by sky high energy bills and operational costs. However, under the new Energy Bill, certain energy intensive industries may benefit from economic support to maintain competitiveness while the UK makes the switch to lower carbon generation.
Under the new legislation, a separate incentive means manufacturers could in fact, be paid for every kilowatt-hour they save through energy reducing measures, such as low energy lighting, smart metering and monitoring. Further to this, additional incentives may be offered to businesses choosing to invest in energy efficient technology.
In terms of the impact on the industrial sector, we believe that now is the time for manufacturers to act to recoup some of the billions that have been spent on energy over the years. While the Energy Bill won't actually reduce the cost of energy itself, it will provide manufacturers with an opportunity to take stock of their plant's operations, with a view to improving and reducing their consumptions and taking advantage of the financial rewards for investing in energy saving technology.
The primary route to doing this is by automating processes that currently operate manually, which leads to reduced energy consumption, thus making manufacturers eligible for the newly introduced incentives.
So what are the pathways to automation? By adopting Ethernet-based control networks alongside commercial off-the-shelf hardware, as well as components and operating systems, it is possible to greatly improve the way the systems already in place can communicate. This provides end-users with the flexibility, choice and predictability necessary to achieve a truly energy efficient plant. So by upgrading to a more integrated solution, which incorporates both the energy management and automation system with the operation management applications; it is possible to make vast improvements to a site's Overall Equipment Effectiveness plus Energy management (OEE+E).
The most significant energy savings can be seen when an entire plant's operations are automated. Of course the cost of doing so will depend on both the size and complexity of the site. We can calculate an estimated payback period for our customers, helping them to justify the initial cost outlay and highlight the financial benefits in the future.
In addition to lowering energy costs during the production process, automating processes also allows for maximum flexibility as it enables a system to quickly react to variable energy costs. The price of energy can vary significantly at different times of the day, as well as geographically. Manufacturers may be using a process automation system to manage energy consumption, but if they are using too much energy at the wrong times of the day, both costs and emissions will remain high.
With such attention being paid to energy efficiency and many businesses already feeling the pinch of higher fuel bills, the new Energy Bill should not be viewed as a negative for manufacturers. Rather it is offering a chance to make the most of the incentives on offer.
Through automation, it is possible to reduce overall energy consumption and in turn, be paid for the savings a win/win situation in terms of meeting the UK's energy reduction targets by 2020, while helping manufacturers to free up additional OPEX to reinvest back into the plant's overall infrastructure. But manufacturers should not rest on their laurels, it is vital that they act now in order to make the most of the new legislation and the benefits it can offer to our sector.
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Following the government's announcement that under the Energy Bill, energy-intensive industries may be exempt from certain costs associated with the move to a low carbon economy*, the new legislation may offer some relief to the industrial sector that has already been hit hard by rapidly increasing energy costs. Here, Richard Beighton, VP of Industry for Schneider Electric offers advice to manufacturers looking to make the most of the Energy Bill.
