Manufacturing AUTOMATION

Empowered: Automation puts you in control of your energy costs

March 25, 2014
By Patty Solberg

Peak power is expensive power — sometimes very expensive.

In Ontario, for example, businesses with an average peak demand over five megawatts could pay a “global adjustment” charge of $350,000 per megawatt of load they contribute to this year’s top five peaks, according to the consulting firm NRG Matters Corp. And that’s in addition to regular usage charges.

But industrial facilities are not simply at the mercy of peak power charges, and manual shutdowns are not the only option for reducing peak usage. Businesses that use an automated demand management system can cut energy costs without compromising production or quality — even when they have complex, demanding production processes.

The key is to take full advantage of a suite of demand management strategies: demand control, demand response and dynamic pricing optimization. Using technology with sophisticated analytic capabilities allows businesses to optimize each of these strategies by drilling down into the performance of specific loads, comparing current and historical data, and viewing data across the enterprise.

Managing demand peaks safely and effectively
A demand management system automatically curtails only the loads needed to meet your savings goals, rather than making large, predefined reductions (as peak demand limiters do). The ideal demand management system will integrate with your existing control systems and extend their functionality. A system that includes the following features will let you manage demand optimally without endangering critical processes or reducing overall production output:
•    Pricing intelligence: An algorithm calculates peak demand based on your utility rate schedule, avoiding needless reductions that bottleneck your processes.
•    Rule-based actions: The system lets you specify which loads it can reduce at which times — and doesn’t break them. It can prioritize loads sequentially, by group, or by process logic to optimize your energy use, and it can synchronize load shedding to achieve both savings and productivity targets.
•    Facility-wide control: Incorporating as much of your facility as possible into control actions broadens the opportunities for load shedding, letting you optimize energy use and minimize disruptions.


Such a system will not only reduce your facility’s electricity costs, it will also deliver business insights. Demand management automation gives you access to real-time data from plant equipment, and with full visibility into your facility’s energy use, you can monitor equipment efficiency, calculate product costs more accurately, anticipate equipment failures, and act on data in real time.

Essential demand management strategies
Demand control: Demand control (DC) involves preventing demand spikes, rooting out inefficiencies and shifting power demand to the lowest-rate periods. An advanced demand management system allows you to do this safely and reliably by automating strategic demand reductions over a collection of loads so that you can maintain productivity. It can prioritize loads sequentially, by group or by other conditions such as process status, type of material, time limits or when a load was last curtailed. It can also orchestrate load shedding to achieve both savings and productivity targets. Actions the system might take include:
•    Turning equipment off when there’s a process buffer;
•    Adjusting temperature setpoints;
•     Slowing or shutting down fans;
•     Reducing power to finishing equipment, such as grinders or motors, when it’s not needed;
•     Reducing wastewater treatment loads to minimize energy consumption by blowers, agitators and pumps;
•     Shutting down battery chargers; and
•     Delaying the start of vacuum tubes or grinders.

The savings can be significant. Peak-time energy use can account for as much as 40 per cent of an industrial user’s electricity bill, so avoiding these spikes can reduce the overall bill by as much as 15 per cent.

For example, one northeast foundry saved more than US$64,000 annually using demand control. Another foundry in Mexico achieved a 26 per cent decrease in kilowatt-hour usage and a 55 per cent reduction in peak demand, resulting in US$45,000 of monthly savings. And a Toronto-based food distribution operation is saving US$38,000 a year through demand management and energy efficiency measures.

Demand response: Utilities and power system operators — including those in Alberta, Ontario and Quebec — use demand response (DR) programs to relieve stress on the grid and reduce the need to build new power plants. DR programs pay electricity users to reduce consumption on demand, typically when the grid is experiencing spikes in power demand. For example, when a heat wave or cold snap causes a demand spike, a utility might call on DR participants to reduce their usage by an amount specified in their contract.

There are numerous types of DR programs with varying names and requirements. With more traditional programs, which provide advance notice of events that typically last two to four hours, businesses may participate manually by simply turning off equipment for the DR period. However, manufacturers who use a demand management system can draw on the inherent capacity in their processes to make fine-tuned reductions in power use and avoid complete shutdowns.

Canadian plants subject to global adjustment charges can use a demand management system in a similar way. Class A customers (those with an average peak demand more than five megawatts) pay the system operator a global adjustment charge — essentially their share of peak power demand — to cover power costs not covered by fixed business and residential rates. This charge has risen steadily in the past several years, and companies subject to it typically sign up for a peak advisory notification service to warn them of forecasted high peaks so that they can avoid “coincident peaks” (the ones that incur charges).

A demand management system allows manufacturers to react to those warnings with strategic, automated load-shedding actions that minimize global adjustment charges as well as production impact.

The latest DR programs require automation, and they tend to be the most lucrative. In these programs, the business’s and the utility or grid operator’s systems “talk” with each other using a standard such as Open Automated Demand Response (OpenADR), with a Smart Demand Response Automation Server (Smart DRAS) client providing a dynamic connection. The utility’s system notifies the user’s system of a DR event, and the user’s system takes action according to the energy usage rules set for that facility.

Dynamic pricing optimization: Dynamic pricing strategies, such as paying spot market costs for electricity, involve rate changes based on the market price of electricity, weather events or other conditions. An advanced demand management system lets businesses respond automatically to ongoing price fluctuations by shifting consumption to lower rate periods or reducing consumption during costly super-peak times.

Implementing such strategies, in addition to the automation to manage it all, can result in significant savings for manufacturers. Power doesn’t have to be expensive.

Patty Solberg ( is the director of product marketing at Powerit Solutions, a Seattle-based international technology company that focuses on advanced energy demand management.

This article originally appeared in the March/April 2014 issue of Manufacturing AUTOMATION.

Print this page


Story continue below