As we all know and experience, there is an increasing social push for sustainable transformation. The latest IPCC report is highlighting the fact that human caused climate change is creating weather extremes and that this is just the beginning of the adverse effects that will come if we don’t act now. Currently we are at 1.1 degrees celsius of warming and with current climate policies it is estimated we will reach 3.2 degrees celsius by 2100. To keep us within the key limit of 1.5 degrees celsius, we need to reduce emissions by at least 43% by 2030 compared to 2019 levels. This is not a small task.
From 2023 the EU requires large and listed companies to report on their environmental and social impact (the CSRD). This aligns with a global shift towards increased transparency on ESG impact of large corporations. A secondary trend that comes with this is companies committing to ‘carbon neutral’, ‘net zero’, ‘climate positive’, or a myriad of similar sounding but slightly differing goals. The defining of these different terms requires an article in itself. But what it all comes down to, is a need to
Understand the Environmental and Social impact of your business
Be able to report on this Environmental and Social impact in a transparent and accurate way.
In this article, I want to focus on environmental impacts and deep-dive into utilities usage (energy, water, gas etc). Specifically focusing on an approach and strategy for monitoring and reducing scope 1 and 2 emissions. Scope 1 emissions come from sources that an organization owns and controls directly. E.g. in the context of industry - water usage in your production line, or burning of fuel in a furnace or boiler. Scope 2 are emissions that a company causes indirectly and come from where the energy it uses is produced. E.g. electricity for the lights in a factory being produced by a coal fired electric plant versus a wind energy farm.
A company wide standard for energy monitoring and management has multiple benefits. Not only does it allow you to save costs through uncovering leakages or equipment that is underperforming. But it can give you the foundation on which you can accurately measure your emissions and create structure and transparency for sustainability reporting.
Below I outline a high level approach for successful deployment of an enterprise energy monitoring solution in the context of a manufacturing company.
1. Get an understanding of your current energy data availability.
Sadly in many cases the available data a company has relating to its energy use is the bill from the energy provider at the end of the year. If you are a large manufacturer and this is the case, then it is time to invest in energy monitoring meters and sensors along with a central BMS or Historian to gather and store that data.
2. Gather the data
Now purchasing utility meters and a BMS or Historian might seem like a daunting and large up front investment, but there are ways to mitigate this. For starters, it is not necessary to have each utility's flow and piece of equipment connected to a utility meter (although this would be your ideal end state scenario). Start for example at site/factory/building level, metering the inflow and outflow of electricity, gas, water etc. There are even providers of energy meters that work with ‘as-a-service’ models, meaning you pay a monthly amount for the equipment rather than a fixed up front capital expense.
3. Understand Energy Use in Real-Time
Once data is being captured, it’s time to start making that data accessible and integrating it with a streamlined and cross company standardized measurement and reporting tool. The goal is a core enterprise solution for utilities monitoring, containing standard reports, best way dashboard, visual management tools highlighting KPIs.
Ideally showing the utilities use at site, building and area level in order to support identifying the areas of high utilities usage and allow for data consolidation for company wide reporting. Depending on the metering infrastructure, potentially it will be possible to dive to equipment level. This doesn’t necessarily mean all of your equipment needs to be connected to smart meters. If you have 10 boilers, with only one being metered, you can create virtual meters for the remaining 9 based on the knowledge of the utilities usage of the first boiler. This approach won’t be able to capture leakages from the 9 boilers though, but will still give you a more detailed view of your utilities usage.
4. Contextualize the Data
An important next step is to contextualize all this data coming into your utilities monitoring platform. The goal is for normalized reporting that incorporates external data to factor for e.g. weather and production (in the case of an industrial manufacturer or engineering company). Often companies will compare the utilities usage from one day to the next using a static limit. An approach which is near useless. Energy usage for heating a building will always be higher when the weather is colder. Similarly, the electricity usage will be higher if all machines within a building are running during a period of increased operations. It is important to incorporate these factors into the monitoring tool in order to be able to normalize the data to allow for more accurate data representation with the ability to correctly identify the underlying utilities trends.
5. Optimize Equipment and Processes to Reduce Emissions
Now that exhaustive and accurate data is being fed into the monitoring tool, it is time to start identifying new opportunities for reductions in emissions / energy usage. With the data now available, let’s focus on optimizing equipment and processes to reduce emissions. Here it is important to focus first on the large consumers of utilities. For example, HVAC (Heating, Ventilation and Air Conditioning). In industrial settings, modern HVAC systems will often have a number of data points available within their system that can be used to accurately measure and monitor energy use and in turn CO2 output. In order to support incorporating such systems into the utilities monitoring tool it is beneficial to create templates for gathering the data and formulas for accurately calculating the energy use from the available data.
6. Analytics with Automated Alerting and Actions
What is a monitoring tool without the ability to track actions and automatically alert utilities engineers to problems. This will be the next stage in development. Ensure alarms are configured to alert engineers to potential problems so that they can react quickly and prevent e.g. leakages. This may need to be set up in collaboration with maintenance engineers if data is available at equipment level. A peak in energy use by a piece of equipment could be an indicator that it is time for some preventative maintenance. Taking this into consideration, combining utilities data with production data can assist with predictive insights into not only future energy use (if we combine with production planning data), but also predictive maintenance use cases. Additional analytics to drive forecasting and intelligent optimization recommendations can add a lot of value to the solution.
7. Utilities Operations Data Use Culture
This point should really be taken into consideration from day 1. Along with deploying a utilities monitoring tool, it is imperative to ensure a utilities operations data use culture is cultivated. An embedded culture of using the developed tools, reports and the dashboard. Initial steps that can be taken towards this include;
Highlighting the need to reduce utilities usage from a sustainability perspective.
A strategic vision and guiding organization for utilities monitoring and reduction
Incorporating utilities monitoring into existing processes/meetings/reporting streams
Highlighting and celebrating early wins
Including reviewing utilities reports can also become an additional activity in existing Operational Excellence meetings, Lean Six Sigma Gemba walks, or other daily meetings involving operators from the shop floor, supervisors and management.
8. AI/Machine Learning for Load Shedding / Peak Shaving
With an energy network that is becoming overloaded with demand, it is important to take load shedding / peak shaving into consideration, not just for financial reasons. Keeping that Net Zero goal in mind, the ability to shift energy usage to a moment of increased availability of renewable energy is a great way to accelerate reaching set targets. This is even more important in the case of a production site that is generating its own renewable energy through solar panels, wind energy or geo-thermal. In an ideal world, utilities data combined with forecasting for availability of renewable energy would feed into production planning to achieve this.
9. Intelligent Lights Out Factories.
Lights out manufacturing is the ability to fully automate production whereby no human presence is required on site. While this may seem like a situation we are not anywhere near to, there are multiple lights-out factories in existence. Just turning the lights off though won’t be enough to reach that Net Zero target. But we can take a step back and incorporate some of the underlying industry 4.0 concepts in the case of our utilities monitoring system. For example, we could work towards a predictive digital twin style solution, that incorporates predictive analyses and extended reality visualization to react to and plan for utilities issues/projects. Incorporating advanced automation, we can work towards a closed loop control adaptive energy management system that adjusts itself and automatically directs engineers to where their help is needed.
10. What next?
Achieving Net Zero. The above 9 steps can help a company gain control over its utilities usage, but this is merely a small piece in the puzzle towards achieving net zero. Achieving net zero will involve shifting to renewable energy sources, re-examining what we produce, how we produce it, and what it’s produced from. This will involve extensive collaboration with suppliers, customers and potentially at times competitors.
This article is bought to you by
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Accenture
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