Reducing energy consumption does not always yield savings
A food manufacturer closely tracks their energy use from year-to-year and actively works to reduce their energy use with various energy reduction projects. Their finished goods production decreased by 2% year-over-year and that was accompanied by a 4% reduction in consumption. However, their energy cost actually increased by 15% year-over-year.
Energy Analytics Explained
The Plant Manager did not consider the utility tariff structure or Demand Factor of the facility. Further, the energy efficiency projects themselves, did not consider Demand vs. Time-of-Use Billing. In any event, the type of projects undertaken would have had little or no effect on demand charges anyway.
Although they proactively implemented energy reduction projects, their project goals were based on reducing energy not Energy Cost Reduction. Consequently, no mechanisms were employed to verify actual savings, leading to ROI miscalculations and disappointing cost savings. Energy monitoring with accurate cost evaluations would have provided them the information needed to ensure successful energy cost savings.