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What savings for industrial/commercial and institutional energy users are there (at low cost or no cost) to be captured using energy management "tools"?

Rafael Herzberg's picture
Consultant energy affairs, Self employed

Rafael Herzberg- is an independent energy consultant, self-employed (since 2018) based in São Paulo, Brazil* Focus on C level, VPs and upper managers associated to energy related info, analysis...

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  • Jan 8, 2023

(1) Up to 5%
(2) From 5% to 10%
(3) Above 10%
(4) I don't know

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Hi Rafael, We developed energy optimization algorithms and tools and in my experience i've seen improvements (talkin about operative margins here) between 2% and 20% depending on the assets mix, the size of the application and the flexibility allowed to run everything (sometimes security contracts or other policies requires machines to be always ON reducing the flexiblity margin)

Some companies tend to run with a business as usual approach because they don't have the bandwidth to really analyze and apply models to improve efficiency. When they do they usually have higher returns as there are many aspects that you can look at to optimize the system. 

Larger companies, with more resources working on different aspects, have already optimized some aspects leaving less room for improvement. Consider though that a 2% savings in fuel costs for a large utility managing a power plant it's probably worth more than a 10% improvements in smaller plants so it's kind always worth looking at solution to optimize the system. 

I hope this gives you some perspective. 

Rafael Herzberg's picture
Rafael Herzberg on Jan 26, 2023

Thanks! Totally agree!

To be completely objective, the question is -  “no cost/low cost” compared to what?

Should you replace a 1.4 kW per ton cooling system for one that is 0.33 kW per ton; or replace a 70% efficient steam heating system with a new hydronic condensing boiler system that is 95% efficient? Much of the time the question is how much will it cost you if you don't?

In these eco-political times, it is often a question of how much money can you get from the federal government, or you can get from the state in tax benefits, or cash, to retrofit or replace your energy systems. In addition, what cash rebates can you get from the local utility through the local programs for a particular retrofit?

Not to be forgotten, what subsidies can be tapped (EPAct, TCJA, IRA) for energy retrofits, also renewable energy such as solar, wind, and geothermal heat pump systems? Solar panels will continue their growth and evolution into the energy economy, and heat pumps will replace many of the fossil fuel heating systems where they are practicable. Heat pumps will hasten the electrification of heating systems (which should be of interest to electric power producers) shifting away from fossil fuels in anticipation of new sources of electrical energy, besides renewables - such as nuclear fusion. - to supply the grid and facilitate electrification and support charging of EVs, etc.

 So – what can you afford NOT to do?

Rafael Herzberg's picture
Rafael Herzberg on Jan 16, 2023

In my consulting experience, more often than not, there is a list of low hanging fruits. A few examples:

1st) Programming the use of important (kW wise) loads) as opposed to "just let them go "business as usual". The differences may be super significant. A super cheap timer of if there is an energy management system in place, it is only about setting the times os use according to what's needed avoiding waste.

2nd) Be very diligent about when closing power prices for future delivery (deregulated power markets). Using tools such as moving average, marginal cost of expansion and relative strength index allows very robust decisions!

3rd) Arbitration cost tools such as using more than one energy source - being able to have a "mix" of energy sources available and choosing the best combination all the time!

4th) Make the best of time of use rates, by programming selected loads depending on the time of the day and associated rates (wire fees and energy).

5th) Go for Demand Response programs and "capture super savings

6th) Control demand using an available energy management system. Usually reducing 1 standard deviation (Maximum demand - Average demand is typically 3 standard deviations apart) is a very easy challenge because the associated frequency of observations is super low.


Rafael Herzberg's picture
Rafael Herzberg on Jan 26, 2023

Vytau K. Virskus

I loved your ending  "So – what can you afford NOT to do?" - that's really a very valuable question!  Super thanks!

Question is very broad, not sure of the definition of energy management "tools"? If the organization has done no previous energy management work, saving should be >10%.

Rafael Herzberg's picture
Rafael Herzberg on Jan 16, 2023

Thanks Gary! 

In my experience, just a very few companies/institutions are super committed to energy cost reductions. It's not their core business and more often than not they will say their plate if really full and they do not have the time to go for it. 

I asked this question because most of my experience is in Brazil (although many clients are/were multinational companies) and I would love to hear your (American) perspective!

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