Energy Efficiency Dollars and Sense: How Do You Measure Up?

November 1, 2010
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Long viewed as a distraction from throughput concerns, energy efficiency and its relation to a product’s carbon footprint are becoming priority concerns for leading food companies.

On-site calibration of meters and other instrumentation facilitates precise accounting of energy use and benchmarking. Food and beverage manufacturers are among the most enthusiastic users of Endress+Hauser’s on-site calibration service, introduced two years ago. Source: Endress+Hauser USA


Benchmarking energy consumption is like eating liver: Everyone knows it’s good for them, but most are reluctant to do it.

It’s easier to focus on low-hanging fruit found in manufacturing facilities worldwide or ignore consumption entirely until a key customer demands to see the plant’s carbon-disclosure statement. The era of carbon penalties and package-label disclosures has arrived in other parts of the world, but North American-centric companies ignore the need for a sustainable energy plan at their own risk.

Energy audits are a fundamental benchmarking tool, but less than a third of food companies conducted them in 2006, according to the Department of Energy’s (DOE) quadrennial Manufacturing Energy Consumption Survey (MECS). Beverage processors were the most likely to audit that year (43 percent), followed by 37.5 percent of dairy processors. By contrast, two-thirds of energy-intense petroleum refineries conducted audits. For all US manufacturers, fuel consumption declined 3.8 percent from 2002. In food, energy consumption was up 6.3 percent.

The cost of audits begins at zero, thanks to DOE’s program that relies on students at leading engineering schools to gather consumption data and crunch the numbers. But, despite the rock-bottom cost, few food and beverage companies have participated in the program. Lawrence Foods in suburban Chicago is one of a handful to tap into audits provided through the Illinois Institute of Technology, and though most of the recommendations have been implemented over the past three years, Vice President Marc Lawrence allows that production managers often are at the mercy of vendors for payback estimates.

High-efficiency fluorescent lighting is one example: The plant’s lighting supplier calculated a three-year payback, and in the absence of specific consumption data, the estimate has to be accepted on faith. Likewise, rejuvenation of the firm’s 35-year-old freezer that increased insulation value up to R-70 is projected to pay for itself in 18 months. And installation of a 1,000hp boiler will be coupled with an economizer project, with the boiler’s latent heat channeled to a heat exchanger that will preheat boiler feed water.

Economizers over ovens and fryers and in boiler stacks are becoming common heat-recovery projects, according to Andrew Scott, a mechanical engineer with Springfield, MA-based The Dennis Group. “Most economizers pay back within two years, and it’s even quicker if it’s part of a brand-new installation,” he says. Nonetheless, economizer projects typically proceed without any upfront benchmarking, and the driver sometimes is a third party. Scott cites the example of a client who was strongly encouraged by Wal-Mart to install a boiler economizer to lower its carbon footprint, despite the fact methane from a landfill was powering the boiler.

Wal-Mart is driving a redefinition of energy efficiency to include greenhouse gas (GHG) emissions. Its supplier sustainability assessment scores manufacturers in four areas and specifically links energy use and GHG. Participation in the Carbon Disclosure Project remains optional, but by mid-2011, it will be factored into supplier scores.

With Wal-Mart responsible for significant shares of their sales, global food and beverage companies in particular are embracing best practices in energy efficiency “to reduce costs, drive innovation and ensure access to capital,” as the retailer explains the value of sustainability. One of the most enthusiastic supporters is PepsiCo, which is following the Wal-Mart example by focusing on improving the performance of its supply chain partners, as well as its own energy practices. Factoring in carbon emissions doesn’t compromise economic savings, and the “soft” savings are sometimes surprising: By outfitting tortilla chip ovens with draft controls and heat recovery systems, Frito-Lay also realized throughput and quality improvements.

John Leslie can access real-time energy consumption data for a casino in Macau, China, from his desk in Las Vegas with Green Energy Management System, a program based on a Square D system. Energy management programs have been instrumental in benchmarking the impact of capital projects at the Mirage hotel and casino in Las Vegas.

Start small

Projects that optimize boilers and boost efficiency from the 80 to 82 percent range to 86 percent or even 90 percent can stand on their own financial merits and don’t necessarily need benchmarking, says Scott. “It would be nice to know who has the best practices and what others can learn from them,” he adds, but many food companies are content to wait for outside pressure before evaluating their practices.

Manufacturers who opt to benchmark their own energy use sometimes invest heavily in meters and tracking software without first establishing clear objectives. “Two or three years down the line, they have tons of data and no direction,” says Paul Stiller, director of energy management at Summit Energy, Cleveland, OH. Instead, plant managers should start small, beginning with electric consumption and expand “as you define the need for information. Put it into context: How much did we use, how much did we produce?” he says.

A former manager of the power and energy unit of Rockwell Automation, Stiller makes a distinction between broad benchmarking between different organizations, which yields qualitative information, and technical benchmarking, which begins with clear objectives and proceeds to “metering, measuring and monitoring efficiencies.” Data-driven benchmarks are only as good as the field instruments used, and Stiller advocates extending maintenance calibration programs to include energy-monitoring devices.

Electricity receives the most attention, but steam, compressed air and other utilities also can be monitored and controlled with temperature sensors, pressure sensors and flow meters, points out Ola Wesstrom, senior industry manager-food & beverage at Endress+Hauser USA. The Greenwood, IN instrumentation supplier is finding strong industry demand for the on-site calibration service it began offering two years ago, particularly from companies where attitudes toward utilities have shifted from a fixed overhead to a variable operating cost. “Monitoring differential pressure on the inlet and outlet of in-process equipment can result in tighter control of energy consumption,” he says. The precision of the sensors and meters is critical, however, and that requires proper calibration and, in some cases, more sophisticated instruments.

Fractions of a percent in accuracy “can make a big difference on an annual basis” for steam and other utility costs, says Wesstrom. For example, inexpensive thermocouples on a large peanut roaster caused one manufacturer to run the oil 15°F above the set point. By replacing the devices with premium thermocouples, oil temperatures were reduced 10°. The daily savings of $1,000 for gas quickly paid for the upgrade.

Physical inspection of instruments can also yield surprising results. Summit’s Stiller recalls the decaffeination plant that swore by the accuracy of data it was gathering on fluid flow. Suspicious of the findings, he went to the meter’s location and discovered it was attached to an open pipe. “They had been measuring wind for years,” he ruefully notes.


Technology’s helping hand
Declining prices and quick returns have made variable frequency drives (VFDs) one of the darlings of efficiency-upgrade efforts. “State and utility rebate programs really love VFDs,” observes The Dennis Group’s Scott, provided the manufacturer can present credible data on the energy savings realized. Chillers in particular are a focus for VFD retrofits.

Fans, pumps, HVAC and other high-voltage AC applications are natural fits for the technology, says Santiago Lentijo, who heads Siemens’ Perfect Harmony Air Cooled Drives business unit in Pittsburgh. Reduced motor maintenance is an attractive side benefit, but simple payback on energy savings is enough to justify most projects.

Most of Siemens’ retrofits have involved 480-volt chillers, but a project in the Las Vegas desert was several magnitudes larger. At the request of John Leslie, manager of building automation systems for the Mirage and MGM Grand, Siemens engineered a drive compatible with the Mirage’s 4,160-V chillers. Two of the hotel/casino’s six chillers were retrofitted with the jumbo VFDs. Rather than assume energy was being saved, engineers quantified a payback from the $180,000 drives within a year. Since then, 14 more VFDs have been installed at MGM properties around the world.

“The only reason I could do it on other properties is because I benchmark and measure every spark of electricity on every machine, every drop of water we use,” says Leslie, who started his engineering career with Prairie Farms dairy in Peoria, IL. He makes use of Eff-Track, a web-based program for chiller monitoring, engineering analysis and reporting, but that is only one of many tools for real-time measuring and benchmarking of energy use. Tying the myriad systems together was critical to improving performance at the MGM Grand in Macau, China. Earlier this year, he overlaid that property’s network with Green Energy Management System (GEMS), an enhancement of a Square D energy management system.

GEMS standardizes the reports from various programs and overlays them with data on GHG emissions, tariffs and key financials that only an accountant could love. “By looking at all the calculations,” Leslie explains, “I can tell where the plant is, and when I make an adjustment, I immediately can see the impact.” Human competence still determines effectiveness, and by eyeballing the GEMS data stream from Macau, Leslie can tell when his best engineer is on duty and, conversely, when the worst one punches in.

GEMS was developed by Glen Lewis, a former Del Monte Foods energy procurement executive who now wears multiple hats as a consultant and University of California-Davis advisor. A handful of food plants are using GEMS, including Sierra Nevada Brewing Co., Food Engineering’s 2009 Sustainable Plant of the Year. Lewis’ background is in chemistry, not marketing, but another factor in slow adoption is the absence of “energy literacy” in industry. “Most people don’t know how to benchmark energy,” he laments, “and while some know about efficiency, they typically don’t grasp demand. People don’t look at energy as holistically or strategically as they should.”


Pick a benchmark, any benchmark

For organizations ready to improve their energy management, there is no shortage of benchmarking assistance. In a Pew Center survey of 48 major corporations, four of five reported benchmarking their energy strategies against industry peers or third-party organizations in the nonprofit or government sectors. The US EPA’s Energy Star program was one of the most frequently cited.

Energy Star begins with a self-assessment in which facility operators enter gross production and energy consumption data for comparison with a reference plant, and then rate current practices on a three-point scale. Juice processing, food production and frozen French fries are among the reference plant categories.

Hixson Inc. has created an enhanced version of Energy Star’s self-assessment. Plant personnel rate their facilities on a 10-point scale for 20 criteria, such as availability of energy KPIs. The resulting rating serves as a starting point for establishing goals and strategies to reduce energy per unit of production and carbon footprint. Called the energy toolkit, the assessment was created two years ago for a client with hundreds of plants worldwide, according to Bill Sander, senior vice president-project manager at Cincinnati-based Hixson. Oftentimes, processes don’t change in sync with new product introductions, leaving plants with thermal steps and cleaning regimens that add cost without benefit.

Benchmarking energy performance is important, says Sander, but the exercise’s greater value is in making energy usage a focus of a plant’s continuous improvement culture. It also serves as a reference point for a top manager “who understands the implications and who has the organizational clout to implement improvements,” he adds. Energy is becoming a bigger factor in the cost of production, and total costs pit plants within a manufacturing network against one another. “If a copacker can make a product cheaper than a corporate plant, the copacker will get the line extensions,” warns Sander.

The steps in a process must be viewed holistically rather than as distinct operational steps such as heating, chilling, washing and rinsing, seconds Kerstin Iverson, global account manager for Cargill Process Optimizers (CPO). The grain miller formally launched CPO in June, though the efficiency assessments have evolved from analyses of both Cargill and customer facilities. Based on work with Kraft, ConAgra and other companies’ plants in the last four years, Cargill believes it can reduce energy costs 5 to 15 percent, as well as achieve reductions in effluent generation and raw materials use. Capacity boosts of 2 to 10 percent also are typical, according to Iverson.

Data collection begins with a two-day on-site visit. Rather than focusing on utilities, motors and machinery, the data are used to model the entire process. Value is derived by identifying and changing critical operational steps that impact the overall process. It takes two to three months for chemical engineers to build a plant’s customized model, which serves as a brainstorming tool, she says.

Benchmarking energy use and establishing best practices is an exercise not unlike root-cause analysis and other problem-solving tools used by engineers. Regardless of whether they have real-time data or work from monthly utility bills, production professionals know how to make sustainable energy management part of the continuous improvement program. What has changed is upper management’s interest in making it a priority, notes Rob Farris, vice president of environmental sustainable solutions at Dallas-based Hitachi Consulting Corp. He credits “the fear the Wal-Mart questionnaire puts into everybody” for making GHG reduction and energy conservation “more top of mind.” And lifecycle analysis is resulting in changes that would not otherwise have been considered. Farris cites the redesign of vending machines undertaken by Coca-Cola after lifecycle analysis highlighted the disproportionate carbon impact from inefficient refrigeration systems.

The easy and obvious projects like lighting retrofits have been done. Geothermal heat pumps and other technologies new to industry are joining VFDs and heat-recovery systems as options to improve energy efficiencies. Absent benchmarking data, facility managers must trust vendors on the savings potential of each. It’s not a scenario industry leaders are willing to accept as they prioritize projects to protect their plants from rising energy costs and potential shortages in the years to come.

For more information:
Glen Lewis, California Institute for Food & Agricultural Research, 530-405-3056, galewis@ucdavis.edu
Kerstin Iverson, Cargill Process Optimizers, 952-984-8850, kerstin_iverson@cargill.com
Andrew Scott, The Dennis Group, 413-787-2242, scott@dennisgrp.com
Ola Wesstrom, Endress+Hauser USA, 317-535-2134, ola.wesstrom@us.endress.com
Rob Farris, Hitachi Consulting, 214-665-7000, rfarris@hitachiconsulting.com
Bill Sander, Hixson Inc., 513-241-1230
Santiago Lentijo, Siemens, 724-339-9386, santiago.lentijo@siemens.com
Paul Stiller, Summit Energy, 440-498-0100, paul.stiller@summitenergy.com


Energy as a risk factor
A sound business rationale must exist before manufacturers can devise strategies focusing on energy efficiency, and the justification for the aggressive strategies of leading food and beverage companies depends on a shift toward viewing energy as a risk management issue.

In From Shop Floor to Top Floor: Best Business Practices in Energy Efficiency, analysts at the Pew Center on Global Climate Change cite the shift from energy as a cost-management issue to a strategy to mitigate the risk of escalating costs and constrained supplies as a key driver in efficiency efforts. Energy audits are effective in focusing plant-level attention on efficiency, but the gains realized and the personnel responsible tended to be facility managers and plant engineers. With the focus on risk management, 60 percent of companies surveyed have turned energy programs over to corporate managers, resulting in “broader and more consistent accountability across facilities and business units leadership.”

Energy costs typically are less than 5 percent of company revenues, the report notes; viewed in that context, company executives give energy improvement short shrift. But the end of the cheap-energy era, a focus on organizations’ carbon footprint and the competitive advantages in lowering production costs are making it a priority.

A number of soft benefits accrue to companies that measure and monitor energy usage and use the data to drive change, the report states. Employees become energized, innovation increases as people across the organization become involved, and the company’s reputation improves among both customers and investors.

The complete report, released last spring, is posted at http://www.pewclimate.org/energy-efficiency/corporate-energy-efficiency-report.

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