Productivity
Efficiency leads to productivity gains in particular by lowering maintenance costs and increasing production yields per unit of input. In addition, improvements in operation and process reliability, which can result from efficiency gains, lead to reductions in equipment downtime, shutdowns or system failures. Optimising processes to enhance efficiency can also reduce staff time required to enhance operations and scheduling while reducing the risk of human errors.
More benefits are possible in an Efficient World
Between 2000 and 2017, energy intensity – final energy consumption per unit of gross value added (GVA) – in the industrial sector decreased by 25%. Greater productivity gains are still possible from the adoption of cost-effective energy efficiency measures, as described by the IEA Efficient World Scenario (EWS). By 2040, manufacturing industries could produce nearly twice as much gross value-added from each unit of energy use (Figure 1).
Figure 1. Industrial energy intensity and productivity trends in IEA member countries and major emerging economies, 2000-16 [1]
Energy use Gross value added Energy intensity 2000 100 100 100 2001 99.02105475 99.5979895 99.42073655 2002 99.85898197 102.0115805 97.88984887 2003 103.517971 106.9213293 96.81695105 2004 111.7295976 114.8977746 97.24261244 2005 118.4723442 120.7531695 98.11116741 2006 122.7713847 131.2322172 93.55277798 2007 127.2349646 141.2123635 90.10185896 2008 128.5532013 146.1589663 87.95437224 2009 125.3910584 141.3435336 88.71368584 2010 137.3481537 155.0341891 88.59217084 2011 143.0660192 165.2773391 86.56118251 2012 143.79 169.85 84.66 2013 144.77 173.43 83.48 2014 145.99 179.00 81.56 2015 145.27 180.75 80.37 2016 144.35 186.82 77.27 2017 146.95 195.37 75.22
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NPS EWS 2017 100 100 2018 98.40665671 98.10630194 2019 96.45964796 95.7465197 2020 94.23702052 93.184447 2021 92.22610029 90.84039591 2022 90.19911798 88.46952474 2023 88.21409474 86.11047826 2024 86.25941525 83.7555329 2025 84.35416388 81.43151436 2026 82.46745093 79.13707177 2027 80.62359072 76.87580364 2028 78.83711356 74.650399 2029 77.10655653 72.46829039 2030 75.4485966 70.33572782 2031 73.86995542 68.31190804 2032 72.37537728 66.39823403 2033 70.96547241 64.60530623 2034 69.63513367 62.92987046 2035 68.38481445 61.3675845 2036 67.20307137 59.90859261 2037 66.08297381 58.53532091 2038 65.01772413 57.24060482 2039 64.00330641 56.01904379 2040 63.03666815 54.87423077
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Notes: Includes ISIC divisions 10-18, 20-23 and 25-32 and excludes mining and quarrying, manufacture of coke and refined petroleum products and construction. Excludes non-energy use (i.e. feedstocks). Countries covered for trends from 2000-17 are IEA members plus Argentina, Brazil, China, India, Indonesia, Russian Federation and South Africa. Industry energy intensity in the NPS and EWS is calculated on the basis of energy use per unit of gross value added (GVA), measured on a purchasing power parity basis in 2016 US dollars.
Energy management systems enable productivity benefits for industry
An energy management system creates the structure and processes for a company to monitor energy consumption and improve efficiency. In addition to energy savings, the adoption of an energy management system can lead to industrial productivity gains by improving energy performance and overall system efficiency. Other benefits can include enhanced production and capacity utilisation, reduced resource use and pollution, and lower operation and maintenance costs – all of which result in increased value generation, and thus improved competitiveness.
Results from companies participating in the United States Superior Energy Performance (SEP) Program provide an indication of the energy efficiency and productivity benefits obtained from the implementation of an energy management system. SEP is a voluntary program in which companies implement ISO 50001 (the global energy management system standard) and energy-saving projects, in order to show that efficiency has improved in accordance with established targets.
In 2015, the energy performance improvement of certified Schneider Electric sites was over 60% greater than non-certified sites. This additional improvement is also demonstrated through quarterly energy savings achieved by SEP certified companies. Quarterly energy savings prior to certification averaged 3.2% and increased to 7.5% in the four quarters after certification and 14.2% in quarters five to seven. In all cases, the improvements observed for certified sites increased over time, illustrating that the benefits of energy management can grow as sites became more knowledgeable and experienced.
Figure 2. Energy performance improvement of ISO 50001 and SEP certified Schneider Electric sites compared to non-certified sites, 2012-15 (left) and verified average quarterly energy savings from SEP certified companies, pre- and post-certification (right)
Note: Based on data analysis conducted by Schneider Electric
Source: IEA (2018), Energy management systems and digital technologies for industrial energy efficiency and productivity
The United Nations Industrial Development Organisation (UNIDO) works with companies in developing economies to implement energy management systems in line with ISO 50001. Data from nine of these companies reveals that on top of savings resulting from the implementation of efficiency projects, they achieved additional “energy management system unique” savings, linked to improvements in staff awareness of energy efficiency; energy management capability; daily routine operations; and staff accountability. Following the implementation of an energy management system in these nine companies, projects were implemented that led to electricity savings of over 26 GWh. However, there were also an additional 8 GWh of “energy management system unique” savings, which accounted for between 1% and 19% of total electricity use in the companies analysed and 12% to 80% of the total savings (Figure 3).
Figure 3. Comparison of project and energy management enabled savings
Source: UNIDO (personal communication 21 June 2018).
Quantifying multiple benefits
While translating non-energy benefits into strategic and financial outcomes may be challenging, some companies have been able to do so successfully.
A Swiss surface treatment company, for example, was able to improve dramatically the business case for an energy efficiency project by factoring in non-energy benefits. When project planners considered only energy savings of a project to optimise the performance of rectifiers, they calculated a simple payback of 6 years. However, when the planners considered financial outcomes derived from non-energy benefits – such as lower maintenance costs, reduced cooling water use and other operational improvements – the simple payback plummeted to less than 1 year.[2]
[1] Adapted from IEA (2017), Energy Efficiency Indicators (database), www.iea.org/statistics/topics/energyefficiency/.
[2]Cooremans C., Eco’Diagnostic, Monney L., Greenwatt, Canton of Vaud Energy audit program, Presentation of 31 May 2016. www.vd.ch/fileadmin/user_upload/themes/environnement/energie/fichiers_pdf/EE_centre_de_profit_201606.pdf.