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Producing more for less?

05 March 2015

Energy management is a cost-effective strategy to save money and to act more responsibly as a business in the tough world of food processing. But are there ways to manage energy usage that perhaps food companies aren’t aware of?

The food and drink industry is the single largest manufacturing sector in the UK, as well as being the fourth highest industrial energy user. With energy consumption on such a large scale, tackling the issue of energy management can be daunting for business owners and managers. Added to this are the specific issues faced by the food and drink industry, including volatile commodity prices, regulatory constraints for food safety, customer interest in sustainability, retailers and suppliers squeezing tighter margins and retailers pushing to dictate product prices, as well as consumers who want higher quality for less spend. 

“The pressure for improved efficiency continues to increase,” explains Andrew Todd, Head of Energy and Resource Management at Verco, the sustainability and climate change consultancy. “The reasons are multifaceted; customers demanding more sustainable suppliers, businesses searching for controllable costs in the face of reduced product margins and a need to mitigate against rapid energy price inflation. It would be understandable to expect these aligned incentives, coupled with the fact that energy efficiency opportunities typically give a good ROI, to make the case for energy efficiency straightforward. However, following the recession and resulting competition for capital, a short-term view persists in many organisations. In addition, a squeeze on headcount over the past 10 years has left many sits without dedicated energy management resources.”

The Carbon Trust, independent experts working towards sustainability through carbon reduction, efficiency strategies and commercialising low carbon technologies, has identified energy management as one of the three main areas to focus on to reduce energy. “Effective energy management can reduce energy by 10 – 40%, which means that there is much more potential for savings,” says David Hilton, Managing Director of Vickers Energy Group, an energy management systems company. “It’s time for businesses to develop an action plan that addresses the changes that need to be made.”

More efficient energy management programmes are a key weapon for food and drink processors, but few are deploying them to their full potential. “Electricity and gas are commodities that, like other commodities, come with a fluctuating price tag,” says Richard Badham, Marketing Manager, Schneider Electric. “Coping with this volatility is tenuous, as represented by a snapshot of the recent International Union of Food, Agricultural, Hotel, Restaurant, Catering, Tobacco and Allied Workers’ Association report. The report predicts grain prices will rise by 40% by 2020, milk prices up 50% and sunflower oil prices by 56%. While there is little that can be done about the price of energy, smart automation and monitoring of plant manufacturing at each process phase reduces the total amount of energy consumed, and that can make a big impact. From process and machine control to electrical distribution, critical power and data centre control across multiple plant sites, energy management effectively lowers production costs which improves profit margins.”

With energy costs being one of the top outgoings for businesses, Hilton believes it’s key for companies to think outside the box when it comes to new strategies to reduce any unnecessary waste within the processes. “Negotiating energy costs with energy providers can be a simple and often effective way to start addressing the rising bills,” says Hilton.

Operational strategies that reduce energy usage mean that production is less dependent on moving commodity prices, and lower production costs can translate to improved profit margins. “In economic hard times, those savings can be passed onto customers who increasingly demand more value,” says Badham. “This builds brand loyalty for the long-term.”

Government initiatives
The Climate Change Act of 2007 introduced a number of initiatives targeted at businesses to help them reduce the UK’s carbon and greenhouse emissions by 80% by 2050. “There’s pressure on business to act on their corporate social responsibility from the government and from the increasing demands of environmentally conscious consumers to understand where their produce comes from,” says Hilton. “It’s vital that companies are made aware of the simple measures that can be taken to address the issues and how they can transform the efficiency of the business. It’s never been more important for businesses to get on board by reducing energy usage, particularly with the incentives and pressure to consider corporate social responsibility.”

The Global Industrial Energy Efficiency Benchmarking report by the United Nations has projected that by 2050, global industrial energy use will increase by 50%. “Sustainable business practices that reduce consumption of natural resources like energy are key efforts in environmental preservation,” explains Badham. “They are also important for food and drink processors because they directly tie to overall improved performance. Many in the industry are realising this fact, evidenced by a recent Deloitte study which highlighted that 49% of food and drink CFOs see a significant link between sustainability performance and financial performance.” 

Energy management strategies
“No two sites are the same,” says Hilton. “For this reason, companies need to look at their individual business and monitor specific needs. Starting the process of reducing energy consumption can be a daunting prospect. Many companies don’t know how to correctly analyse their energy consumption or understand their bulls. They may also not have the resources to implement an analysis of what needs to be actioned in order to reduce consumption and reduce budgets.”

Tom Cumberlege, Senior Consultant at The Carbon Trust agrees. “The best and most robust way to focus on energy management issues is to focus on measurement to get a good idea of where key energy hotspots are in the business. We advise businesses to get an understanding of where energy is being consumed and developing that understanding of what processes across the site give rise to that energy consumption. It’s often an area that gets overlooked and energy gets categorised as an operational cost that can’t be addressed, when in reality it’s an opportunity for food and drink processors to deliver significant financial savings with a very favourable payback from one to three years with low cost capital investment.”

You cannot manage what you cannot measure
As important as it is to invest in a metering and monitoring system for energy usage, it’s just as important to get information and act upon it. “Companies should focus on improving the efficiencies of priority areas onsite,” says Cumberlege. “Understanding, checking and improving routine maintenance is key. Looking at chillers and refrigeration on site, for example, to explore whether old pipes need to be replaced or repaired or installing insulation upgrades. Looking at whether they have a steam system to provide heat distribution, making sure that energy is not being wasted and ensuring steam distribution is adequately insulated is key.”

Heat recovery is essential in the food and drink industry. Rather than waste heat, it should be used to heat something else. When predicting energy usage, many businesses ignore the varying temperatures across different seasons and use one energy setting for the building across the whole year, resulting in excessive energy waste during the summer months. “With large spaces and areas that need different temperatures, it can be hard to maintain all of these effectively without wasting unnecessary energy and money,” Hilton points out. “Some buildings use a single switch to control heating and ventilation, which doesn’t allow variation across the different areas of the building. However, maintaining different areas manually can be labour intensive and result in high costs. An energy management system allows companies to control a huge range of areas in different ways, with one system to monitor and regulate heating throughout the building, using weather predictions and sensors to maintain the correct temperatures.”

The justification for heat integration projects is likely to be sensitive to process parameters and utility costs. 

Creative solutions
As Todd points out, there is no silver bullet when it comes to successfully implementing an effective energy management system. “There is a need to turn data into useful information, and then provide the correct information to the right people in good time,” says Todd. “Meaningful targets need to be set and processes put into place to identify and follow up on variances in performance. Whilst there is no short cut to energy management, there are a number of initiatives and approaches that have been consistently seen to deliver results at food processing sites.”

Improve accountability
“Energy management is more than just compressed air leak management and steam trap maintenance and shouldn’t be the sole responsibility of the site services manager,” says Todd. “The ‘user pays’ concept is one way of ensuring appropriate ownership of energy usage. Instead of it being the responsibility of one person, such as the engineering manager, each department head holds a budget and is recharged for their energy use. This can be an effective way to ensure that process leads look at energy cost objectively when considering process alterations.”

A prerequisite to this approach are wide meter coverage and a reliable reporting system.

Engage and empower the workforce
“It’s important that staff have a comprehensive awareness and motivation for resource efficiency onsite,” says Cumberlege. “There are significant savings to be had through wider staff engagement. Staff need to understand the goals, and to embed it into the site’s culture to drive home the importance of resource savings for the company. The most important thing about installing any energy management system is to ensure staff have the appropriate skills to engage with the system. The system itself can be used for reporting and validating on energy usage as well as to seek out more opportunities for the site. Having the appropriate skills to measure and monitor and target energy efficiency in factories is an essential component of energy management that needs to be addressed.”

Companies can go even further by nominating departmental energy champions to share responsibility. “The use of noticeboards, posters and electronic dashboards can work well but the messaging needs regular reinforcement,” says Todd. “Energy reduction competitions can be a great way to engage with and motivate staff.”

Demystifying black box processes
The good news is that there’s still a huge opportunity in process optimisation and control improvement and capital requirement is likely to be lower. “Data availability and resource are typically the biggest barriers,” Todd explains. “A good place to look for savings is black box processes. Typically complex by nature and often not looked at as long as a process parameter is being hit, these systems can be very difficult to monitor on an ongoing basis and are commonly recipe dependent. A good example in the food processing industry of a system which is worth interrogating is a clean-in-place (CIP) system. The use of advanced analytical techniques applied to high frequency data over multiple cleans will almost always lead to identified improvement opportunities.”

Top tips
Vickers Energy Group has 10 top tips for food processors to save energy.

1. Develop an environmental strategy for your corporate social responsibility
2. Identify where the problems lie within production and address them directly
3. A free audit can be a simple, cost-effective way to understand more about your energy usage
4. Install a sophisticated energy management system to centralise controls for a low-maintenance and effective way to address consumption
5. Analyse your energy bills and challenge any errors or complexities
6. Refrigeration is key to energy management in food processing; can products be stored at a higher temperature?
7. Heat recovery: recycle heat waste and use it again for a more effective process on site
8. Continue to monitor and review long-term
9. Don’t be afraid to tackle issues head on
10. Train staff and implement strategies across the whole business.

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