Industrial energy conservation: issues for improving industrial operations

With the opening up of the Indian economy during the early nineties, the industrial sector has awaken to the need of reducing the cost of production thereby trying to make their products more competitive in the market. Energy has become one of the crucial areas where cost reduction is targeted. Efforts in this direction have lead to positive results. The specific energy consumption of some of the energy intensive sectors reflects this change. While these (there ?) are reasons for the industries to feel proud of this positive change, a comparative analysis shows that the same industries are way behind their international competitors There are essentially two approaches to improving energy efficiency in Indian industries?the first involves adoption of new and energy efficient process and the second involves improving operating efficiency of the existing systems and methods. Acquiring new technology requires financial, technical, and institutional resources. There are several instances of such changes already taking place in some of the energy intensive sectors. However, there is still an enormous efficiency gain possible by improving operations. TERI?s experience shows that at least 10% to 15% reduction in the energy cost is possible through improved operations. Improved operation primarily refers to retrofitting parts of the operating process, improving maintenance practices?still less resource intensive as measures, than acquiring new technology. This article throws light on some of these issues that needs to be addressed for achieving the desired goal. Though competition in the liberalised markets are forcing industries to cut energy costs, certain attitudes and mindsets act against this change towards more efficient production systems for improved operations. Production is assigned greater importance with scant regard for operating efficiency. This attitude is not only prevalent, but appears dominant in industry. As a result, there is in general a reluctance for any modification in a production system even when it improves the energy efficiency of a process. There is a fear that any disruption in the production process could cost the industry and amount to financial losses. This is often reflected in the form of oversized and inefficient production systems. It is possible to have optimized and reliable production processes, provided energy efficiency measures are implemented in the correct way. There is hence, critical concern regarding the understanding of application issues involved in retrofitting. This essentially means the changes which might take place in the performance of the system or the machine, while carrying out retrofitting for improved energy efficiency. For example, when replacing an oversized motor by the right sized motor for improving the energy efficiency?will the replaced motor be able to start and operate the machine? Even if there are slight risks of motor burnout, then implementing such a change would actually cost a huge amount to the industry by way of production loss. One can cite many examples to highlight this concern. It is through the understanding of the application issues that these industrial reliability concerns can be addressed. Therefore, case studies of successful retrofitting highlighting the critical issues could be a useful exercise in this direction. This could be done through insistence of post implementation audits. Computer simulation of systems and processes could also help in resolving the application issues involved in process modification. The role of other players in this area namely the equipment suppliers and the energy consultants, assume great importance in creating examples of successful energy efficiency projects. Equipment suppliers have been playing a major role in demonstrating energy savings through retrofitting inefficient system in industries. They have in turn gained from such aggressive campaigns and also contributed to creating awareness of energy efficiency in Indian industries. This however, has taken place in a few instances only. Manufacturers believe that the market is not yet ready for energy efficiency and hence limited opportunities for business. One of the reasons cited for this belief is the buyer?s concern to minimize the initial investment. The role of consultants is to establish the energy efficiency of existing systems and suggest measures to improve the same. Therefore, precision measurements and in-depth analysis are ingredients for successful energy efficiency studies. Energy consultants are few in number and there are still fewer people who actually have the technical resources and expertise to handle problems of energy efficiency. It is heartening to see that there are efforts made by the Government of India to create a pool of quality energy consultants now. However, there remains an urgent need for quality experts in this area. Energy services companies (ESCOs) are supposed to be single point providers of energy solutions to the industry. In the area of energy efficiency the ESCOs are supposed to carry out energy audits, identify the feasible options for saving energy, arrange finance and implement energy efficiency projects. This would eventually help understand energy needs of industrial clients and come up with solutions that can be implemented without the clients incurring production losses. Therefore ESCOs allow clients to minimize financial risks associated with energy efficiency projects. However, the growth of ESCOs has not taken off in India, primarily because industries are wary of fly-by-night operators who are only keen to maximize their profits without sufficient dedication to services they would provide. While for ESCOs problems of establishing baselines would make risks associated with energy efficiency projects high. Total commitment by top level management is necessary to achieve ?best practices? in energy management. Top-level management commitment to energy efficiency can help create incentives for greater risk taking. Though industries are reasonably aware of the importance of energy efficiency to compete better in the market, yet there seems to be a lack of urgency to carry out any improvements. This can be attributed to the lack of accountability of how energy is used or to the lack of benchmarks with which to compare the present performance with. Moreover, most enterprises are still averse to the idea of outsiders intervening in factory activities and would prefer that the in-house personnel be trained to conduct energy efficiency activities. Priority is most often given to the production chain, as there is an inadequacy of qualified personnel who are aware of energy efficiency issues which are hence neglected. Therefore, understanding the conceptions and commitment of management at the highest level is extremely important. Once the top management is convinced, it is relatively easy to bring in outside expertise to look at plant energy performance. Experience shows that the industries are generally reluctant to invest in energy efficiency for monetary benefit alone. At times, added benefits are sought which may provide a lead over competitors, in the form of higher productivity, improved production quality, higher self-sufficiency in terms of energy needs and the projection of a better ?market image?. It is clear that even though industries realize the importance of energy conservation as an area to minimise production cost there are number of obstacles which hinder the rational use of energy. These are inhibiting attitudes, insufficient technical know-how, market distortions, capital shortage etc. There is hence a need to design interventions in terms of policies and institutions which address these issues and create incentives for energy conservation in such industries.