Overcoming the barriers to energy efficiency

04 December 2017

The drive towards energy efficiency is not as straightforward as it might appear and it is important to recognise and overcome any barriers to reap the benefits, says Heikki Kervinen.

When considering an energy saving project it is important to first look at the drivers for energy efficiency in business. A shift away from the status quo for any business must make sense commercially. Equally, a commercially-driven decision from the top must be supported by employees at every level throughout the business – and that means tapping into the things that matter most to them, and ultimately connecting the two. One of the greatest barriers, in my experience, is when the ambitions of management do not align with the everyday experience of people on the front line.

Let’s look specifically at industrial productivity. A shift to greater energy efficiency can make a manufacturer more productive and more attractive to customers with a sustainability agenda. An energy efficient plant may also mean a quieter and more pleasant working environment for those on the shop floor as well as more reliable process equipment requiring fewer late-night maintenance call outs. Ultimately, improving energy efficiency might even secure the future of that plant, and the jobs that go with it.

Recently, I visited an automotive engine factory in the UK that is part of a global business, and I was completely blown away by the attitude of the engineers who were singing the praises of the energy-efficient measures that have been installed. That is because they understand that energy efficiency is integral to the future success of their plant. The main reason being that the company’s global plants are effectively in competition with each other. When there is a new product to be manufactured, the plant that bids the lowest cost to produce it gets the project. And the lowest bid is driven by the ability of that factory to be as efficient as possible. Of course, winning bids means job security. So it is in the interest of every employee to support the drive for efficiency in everything they do, every day. It is ingrained in their culture. This is a great example of a company getting it right.

Why fix what isn’t broken?
A challenge that we sometimes face is the sentiment that, as the saying goes, ‘if it isn’t broken, don’t fix it’. Particularly in North America, the received wisdom is that you simply use existing machinery until it breaks. I believe that this is a false economy that will damage competitive advantage in the long run. But how do we get that message across?

Ultimately, it all comes down to money, and the cost of the investment required to become more energy efficient. Manufacturers of energy efficient drives and motors always want to talk about how they can result in a lower total lifecycle cost. But customers for those products usually focus on the initial purchase cost. To overcome this barrier manufacturers need to be able to demonstrate an effective return on investment (ROI) in the very short term. Essentially, the financial drivers that speak to the end user must be recognised and arguments for energy efficiency must be presented in the same language. 

No matter what the sector, energy efficiency must be addressed at both the operational and financial level. Many companies are committed to making energy efficiency part of the fabric of their business, setting annual goals at the highest level. I believe that, ultimately, these are the businesses that will be more successful. 

It is often a question of getting every part of the ecosystem on board. Let’s think about the construction industry. When a customer puts out a tender to construct a new building for business or commercial use the cost of actually running it year on year is often overlooked in the bidding process. The result is that the cheapest builder might win, but poor energy efficiency might see a dissatisfied customer over the longer term (and make it a less successful facility) simply because the running costs are so high. There are similar – though industry specific – challenges across many sectors. 

In every industry, we need to understand the cost of energy and how it fits into the overall picture. On a positive note, energy efficiency mitigates a company’s exposure to energy price fluctuations. Historically the argument has been that energy efficiency is good because energy prices keep increasing. Even if that is not always the case, if you use energy efficiently, you lower your risk of exposure in this area.

The role of regulation
Needless to say, regulation has a significant role to play – and the regulatory environment can vary greatly from country to country. I believe regulation is a positive force, but the focus must remain on communicating the commercial benefits of energy efficiency beyond the basic legal requirements. There also needs to be political drive – not only regulation, but incentives such as tax breaks, rebates and funding programs to encourage businesses to adopt energy efficient technologies.

The key to overcoming the barriers is in helping industry understand that adopting energy-efficiency measures creates a ‘win-win’ situation all-round. It is good for the environment and it also contributes directly to their bottom line through enhanced productivity. 

Overall, energy efficiency must become deeply rooted in the approach that industry takes to business. A trend in its own right, rather than the result of an external force. There is significant movement in that direction, and to maintain the momentum all players – suppliers, industrial operators and regulators – must help build the energy-efficiency ecosystem: learning, educating, and communicating in support of the single message that the drive for energy efficiency is built on a valid commercial business case.

Heikki Kervinen is energy efficiency sales and marketing manager at ABB Drives. 

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