What is the size of the opportunity for manufacturing?
Productivity, in its most basic form, is the ratio of output produced to input used.
Doubling Australia’s energy productivity by 2030 has been estimated to equate to an increase in GDP from $219/GJ to $438/GJ of final energy demand. When forecast savings from minimum equipment performance standards are incorporated, this equates to a reduction in final energy consumption in 2030 of 1147 PJ compared with forecast demand.
The manufacturing sector could reduce energy use by 280 PJ per annum by 2030 compared with baseline levels of consumption, at an estimated value of $5 bn per annum by 2030.
What are the elements of an energy productivity program?
1. ‘Traditional’ energy management – using more energy-efficient equipment and processes, as well as implementing technology improvements. Energy productivity aims to capture the ‘multiple dividends’ accruing from investment in more efficient plant and equipment including reduced maintenance costs, reduced downtime, and, in some cases, improved product quality and fewer rejects.
2. Systems optimisation – focusing on the energy aspects of supply chain optimisation, lean manufacturing, as well as other capacity optimisation and waste reduction strategies (for example, onsite heat recovery). There are many process changes and optimisation programs that may be implemented to achieve broader productivity improvements, but greater value can be created by focusing on energy usage.
3. Business model transformation – this element relates to the energy aspects of fundamental longer term business change. It refers to improved product design and manufacturing processes, including production of greater value-added products.
Note: The text above is an extract from the A2SE's "Doubling Australia’s energy productivity by 2030: Re-energising Australian manufacturing". Energetics' Jonathan Jutsen and Anita Stadler co-authored this paper.
Access the report: 2XEP Manufacturing Sector Overview
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Case studies in energy management excellence
Drive to improve energy management delivers significant benefits quickly for iconic Australian food brand
In just under 12 months, Ingham’s management and operations staff, with guidance from Energetics, collaborated to achieve energy c
onsumption savings across the business of 6% - a significant accomplishment for an energy management program’s first year. When compared with resource management programs for similar sized organisations, which typically build up 10% to 15% savings over five to eight years, the result places this iconic poultry producer as a top performer.
Ingham’s success was based on a thorough, structured program with regular meetings, on-going technical and corporate funding support. With significant energy savings due to equipment replacement or upgrade, broader benefits are also realised with lower maintenance and labour costs. Ingham also achieved production and quality improvements from process changes in the business’ feed mills.
Looking to the energy program’s second year, Ingham recognises the longer term and strategic value in energy management, with expected further savings and value created, particularly in improved plant utilisation.
Simplot Australia demonstrates the business benefits year after year of pursuing energy management excellence
Multi-award winning Simplot Australia enjoys wide recognition as a leading example of a company that embraces energy management as a source of competitive advantage.
At the heart of Simplot Australia’s national energy efficiency program is the conviction that all projects are energy productivity projects: “energy is in everything we do”.
Driven from the leadership team, awareness of the importance of energy efficiency and energy productivity is woven throughout the company’s culture, processes, communications, training programs, systems. All decisions at Simplot Australia are made with reference to 5 major pillars of its national energy efficiency strategy.
1. Capital projects: “Energy efficiency will be a key design parameter for all capital projects.” Capital projects require an assessment of the effects on site energy intensity. All projects must consider how an applied technology will improve energy intensity, and equipment selection must consider energy efficiency in selection criteria and how waste energy can be used.
2. Maintenance: “All base plant will be reviewed to ensure optimum performance and energy efficiency.”
3. Culture: “We will engender a culture of energy awareness and conservation”
4. Measure and manage: “Information gathering and reporting will be the cornerstone of continuous improvement in energy efficiency.”
5. Compliance: “Through relentless waste elimination across the value chain, achieve reliable service at the desired quality and lowest possible cost.”
Ultimately the way energy is managed is pivotal in Simplot’s business plans. Energetics has been a proud partner and technical adviser throughout Simplot Australia’s energy management journey.
Watch Graham Bryant's presentation at the World Resources Forum in June 2015