Managing Energy Costs in Manufacturing Facilities

Manufacturing Facilities

The industrial sector accounts for approximately 31 percent of all energy consumption in the United States—consuming just over 21,000 trillion Btu annually—and much of this energy is used for manufacturing processes. On average, manufacturing facilities use 95.1 kilowatt-hours (kWh) of electricity and 536,500 Btu of natural gas per square foot annually, though actual consumption varies widely depending on the subsector. Figure 1 shows a breakdown of energy use for the five manufacturing subsectors that consume the most overall energy. The petroleum and coal subsector is the largest consumer of energy, accounting for 25 percent of the entire manufacturing sector’s energy use. The chemicals subsector is second, consuming about 20 percent of the sector’s energy. The paper subsector accounts for about 10 percent of sector energy use, followed by primary metals and food, each of which represent about 5 percent of consumption.

Average energy use data

Figure 1: Manufacturing end-use energy consumption by subsector
Process heating, drivepower, cogeneration, and conventional boiler use generally consume the most energy in manufacturing facilities, regardless of subsector.
Top technology uses

Although the energy consumption of these manufacturing subsectors varies, there are four common categories identifying the top energy users for the manufacturing sector as a whole. Process heating, drivepower, cogeneration, and conventional boiler use collectively account for over 85 percent of the energy used in the top five subsectors. Facility HVAC and lighting are the next-largest categories of energy consumers, and, though both account for less than 4 percent of total energy consumption, these categories offer proven improvement opportunities for energy efficiency that won’t interrupt plant processes.

To better manage your facility’s energy costs, it helps to understand how you are charged for energy. Most utilities charge manufacturing facilities for their natural gas based on the amount of energy delivered, in therms. Electricity, on the other hand, can be charged based on two measures: consumption and demand. The consumption component of the bill is based on the amount of electricity (in kWh) that the building uses during a month. The demand component is based on the highest (or peak) usage in kilowatts (kW) occurring within the month, or, for some utilities, during the previous 12 months. Demand charges can range from a few dollars to upwards of $20 per kilowatt-month. Because energy costs can be a considerable percentage of your bill, care should be taken to reduce peak demand whenever possible. As you read the following recommendations for energy cost management, keep in mind how each one will affect both your consumption and your demand.

Quick Fixes
Longer-Term Solutions

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