Download - Managing Electricity Costs Manufacturing
-
7/30/2019 Managing Electricity Costs Manufacturing
1/11
The Bottom Line on
Managing Your Electricity Costs:
A Guide or
Maact
-
7/30/2019 Managing Electricity Costs Manufacturing
2/11
A Guide or Manuactu
1Know How
You Are Billed
page 4
There is a wealth o expertise available to advise on the best approaches or your company. There also incentive programs to help shorten payback or investments in energy eciency. Natural ResCanada (NRCan), your local distribution companor the Independent Electricity System Operator (can be your rst stop or more inormation aboutincentive programs.
Do a top-to-bottom analysis o how your operationelectricity, understanding how much energy is usmachinery and acilities. This will help you pinpowhere to start with energy eciency initiatives.
Go or some easy, early wins to help build momenMaintaining and operating equipment properly wenergy eciencies, as will eliminating waste by t
o equipment when not in use, or turning down ttures to match actual operational needs.
There are a myriad o energy-saving technologiesavailable. The challenge is to nd the technologiwill deliver the most benets or the investment will work or your organization. Do research; talk who have used new technologies; understand payperiods; and examine careully how technology uwill contribute to your bottom line.
As a business that pays the wholesale price orelectricity, your costs are based on: how much youse; the most electricity you draw at any one timewhether or not you have an interval meter. There also a number o dierent types o charges on yobill beyond the pure commodity cost. By understthese basic components o your bill, you open theto energy savings.
2TAKe ConTrol o
Your energY use
page 8
3ind THe rigHT
TeCHnologY
page 12
4use inCenTives To
Your AdvAnTAge
page 13
A CAll To ACTionHourly Electricity Prices
A Competitive Advantage
In an intensely competitive global economy, with a
strong dollar and rising uel prices, more and more
manuacturers are learning that there are some
costs that they can control. Variable hourly electric-
ity costs have been in eect or large volume users
in Ontario since 2002 oering manuacturers an
opportunity to leverage their electricity consumption
to improve their competitive edge.
In Ontarios wholesale electricity market, operated
by the Independent Electricity System Operator
(IESO), the price o electricity is determined by the
orces o supply and demand. (For more inorma-
tion, see page 16.) For manuacturers, this concept
drives their businesses day in and day out. By
understanding how electricity consumption impacts
your business, you can use it to your advantage and
bring operational costs down.
Think o your electricity service much like any other
supplier. You choose suppliers based on price,service, quality and product availability. Electricity
supply also comes with a whole suite o options it
all depends on how fexible you are in the way you
use it.
Hourly prices fuctuate, but tend to ollow
predictable patterns. By understanding when
prices are likely to be at their highest and
lowest you can start to look at your energy use
rom a new perspective, and you may nd some
unexpected savings.
Leading the Way
Taking charge o your electricity use will also deliver
other benets. Businesses have a unique opportunity
to set an example or all Ontarians o the value
o being environmentally responsible and reducing
their environmental ootprint. For the electricity
system operator, this is good news.
Any actions that are taken will help lower the overall
demand o the province. In addition, they will
provide or more ecient use o Ontarios electricity
assets and help maintain a reliable system.
This brochure will provide you with the basics o
electricity pricing, billing and eciency programs
and help you take those rst steps toward turning
your electricity use into a competitive advantage.
Cy a g
Aa Caaa lt.:
sma cha y
b a
page 2
Ktz ectpat ic.:
gat
thh ma p
page 14
(C pht: Ktz ectpat ic.)
Hky ijct
M sytm lt.:
n y tch
ppt taabty
page 10
Zchm:
Pc atmat ppt
y cat ma
page 6
Th ipt ectcty sytm opat (ieso) a Caaa Maact & expt (CMe) ha j tth
t p maact th mat abt th ctcty makt t hp thm maa th bttm .
Th Bttm l Maa Y ectcty Ct: A g Maact
hp y a t maa ctc ty ct by ta h a h y
b ctcty. i at, a xamp h ota maact
ha tak act t maa th ctcty ct, th pt t th
bttm .
-
7/30/2019 Managing Electricity Costs Manufacturing
3/11
Managing Your Electricity Costs A Guide or Manuactu
In Brenda MacDonalds opinion, energy eciency
isnt rocket science, but it can still have
measurable results.
According to MacDonald, President and CEO
o Coyle and Greer Awards Canada Ltd., energy
eciency improvements can be made almost
anywhere. You just have to start thinking about
your products and your processes to see where
you can nd savings, she said. I youre a small
company, theres no need to use your hard-earned
dollars to hire a consultant to do a ull-out energy
audit. Enlist the help o your own sta to come
up with ideas.
MacDonald and her sta work in a 27,000
square oot school thats been converted into a
actory that produces recognition awards like
lapel pins, cast products such as medallions and
keyobs in base metal, pewter and zinc as well as
10 and 1 4 karat corporate jewellery. Located onthe outskirts o a small town between London
and Woodstock, the acility is bright and
spacious. Its rooms are fooded by natural light
thanks to the many w indows installed in this
1963-vintage school.
In the last year alone, MacDonald has been able
to shave eight per cent o her electricity costs
by making some simple changes around the
plant. Though her annual costs are quite low by
manuacturing standards total electricity costs
hover near $46,000 they still represent a
signicant cost and the money saved on
electricity can be reinvested in other areas.
One o the most important changes was the
replacement o an outdated, inecient air
compressor, which runs the hot stamping
machines. The existing 20-tonne compressor was
replaced with a high-eciency ve-tonne
compressor which meets the needs o this small
manuacturer much more eectively.
Similarly, MacDonald recognized the pl
burn-out oven, used to make castings, w
operating at ull capacity. As a result, sh
able to replace the larger oven with one
appropriately sized, which uses two-thir
energy than the larger oven.
Its not complicated stu, MacDonald
the energy eciency improvements she
to date, and its not expensive.
Over the years, she has invested in caul
insulation, window lm, programmable th
and motion sensors. While these are not
capital expenditures, they all play an im
role in helping MacDonald keep her cos
and her prot up.
Two summers ago, during the record-bre
heat and humidity o 200 5, the acility
conditioning system ailed. Thats when
MacDonald introduced a new rule aroun
lighting: to prevent heat gain, all the lig
acility were turned o until the AC was
Because o the many windows in the bu
enough natural light ltered in to allow
employees to carry on working without
interruption. To this day, overhead lights
rarely turned on in the summertime.
MacDonald is an active member o the E
Committee o CIPEC, the Canadian Ind
Program or Energy Conservation, a part
between the ederal government and ind
associations/companies representing so
per cent o all industrial energy use in C
Despite this role, MacDonalds interest
eciency is grounded in her own compa
operations. She is characteristically blu
assessment o the benets o good ener
management practices. You dont do t
un, she said. Its all about money.
y a g
Aa Caaa lt.:
ma cha y
a
i th at ya a, Cy a g h a b ab
t ha ht p ct t h ctcty ct by
mak m mp cha a th pat. Th h
th aa ct a qt by maact
taa tta ctcty ct h a $46 ,000
thy t pt a fcat ct a th my
a ctcty ca b t th aa.
-
7/30/2019 Managing Electricity Costs Manufacturing
4/11
Managing Your Electricity Costs A Guide or Manuactu
eduCing eleCTriCTY CosTsoosTs Your BoTToM line
quat at ulla eugait venibh eugait ulputem do digna autet lore
psum iure min et, conse consecte acil deliquam, quissi.
ptatue eu acilit num et ad mod dolorem zzrit lortie acidunt
nisl ea commy nostrud magniscil etueros exero dit et wis nis
loreet wismolu mmoloborem qui blam ing elis dolor suscip
liqu amcommo dolorpero dio Im quat at ulla eugait venibh
gait ulputem do digna autet lore dipsum iure min et, conse
nsecte acil deliquam, quissi. Uptatue eu acilit num et ad
od dolorem zzrit lortie acidunt venisl ea commy nostrud mag-
scil etueros exero dit et wis n is doloreet wismolu mmoloborem
i blam ing elis dolor suscip eriliqu amcommo dolorpero dio.
it t mpy a matt th m
ctcty y cm th m y
pay. wh y cm ctcty
a h mch ctcty y cm
attham tm ca a ha afcat mpact y b.
There are two main drivers that infuence
the nal price you pay consumptionand peak demand.
These two variables are used as multipli-
ers on the electricity bill which means
that you will need to manage both
consumption and peak demand in order
to bring costs down.
Cmpt: H Mch
ey Y u
The number o kilowatt hours on your bill
shows how much electricity was con-
sumed within each billing period. This is
your cmptor y charge.
Consumption is the b asis or commodity,
regulatory and debt retirement charges.
The regulatory charge covers the cost o
operating the power system reliably; and
the debt retirement charge is used to pay
down the ormer Ontario Hydro debt.
Pak dma: H at
Y Cm
dma is a measure o how ast energy
is consumed at any one time. The
highest level o demand during a billing
period is pak ma. LDCs use
demand as the multiplier or transmis-
sion and distribution charges. These
charges cover the cost o building and
maintaining the distribution and
transmission systems that deliver
electricity to your acilities.
consumption 24 hours a day, seven days a week,
or or specied periods o time, such as or 24/5(weekdays only) or 16/5 (two shits on weekdays)
and pay the hourly price during o-peak periods.
While xed-price contracts allow companies to
mitigate any potential price risks, they do so at a
premium. Beore signing a contract, be sure to
compare the prices being oered against the price
you are currently paying, and balance the value o
secure pricing against the extra costs you may
incur in a contract.
1Know HowYou Are Billed
Energy Demand Kilowatts (kW
or Kilovolt-ampere (kVA)
How ast you consume electricity also has
important infuence on electricity costs. Op
a lot o equip ment simultaneously, even o
period o time, may spike your peak dema
resulting in unnecessary charges. Running
ery in sequence will help keep demand cha
down even though you are consuming the s
amount o electricity.
The chart on the let shows how stacking u
electricity use at one particular point in tim
costly. While this companys overall deman
are low, they had an energy use spike that
their demand costs by 27 per cent.
By smoothing out demand levels, you will
reduce your distribution and transmission
As these systems must be built with enoug
capacity to meet the highest levels o dem
these charges are multiplied by your dema
not consumption.
A Word About Power Factors
I you have a low power actor (usually any
below 90 per cent), you are incurring losse
the power distribution system. LDCs will le
charge on its customers to account or the
Your electricity bill will indicate what your
power actor level is. Identiying ways to im
your power actor could open up another a
potential savings. (See Power Factor Corre
page 12.)
You cant make good decisions
without good data. Once you
have it, use the data to identify
a good roadmap to future
energy savings.
Ba C, Maa, Tchca
sc, Zchm
oer more detailed daily, weekly and monthly energy
proles in customized and password-protected
web pages.
More inormation about the hourly price is available
on page 9.
wht Aa Pc
Companies that use a conventional meter pay a
weighted average price based on the consumption
patterns o all the LDC customers who also dont
have interval meters. This means the price will be
weighted by a broader group o customers. I your
operations consume more electricity during the
lower-priced periods, it may mean that you are
paying more or electricity than you need to.
x Pc Ctact
Some manuacturers preer price stability and sign
a contract or xed rates with retailers or some or all
o their electricity consumption. There are a variety
o options available. You can contract or all your
nergy Consumption Kilowatt hours
e energy charge is based on how many kilowatts
e used each hour, kilowatt hours (kWh). I you pay
e hourly price, there are three dierent pricing
tions or the energy charge:
y ota ectcty Pc
mpanies pay the hourly price i they have an
a mt that electronically tracks their
ectricity use every 15 minutes. The hourly priceelectricity is determined in Ontarios wholesale
arket, managed by the IESO. This price fuctuates
cording to the availability o sup ply, the weather,
e time o day, week or year and the demand
it.
Cs download consumption inormation rom
ch customers interval meter and use it to
lculate that companys average hourly p rice.
is is the price that appears on th e bill as the
nergy or consumption charge. Most LDCs
DE
MAND(kW)
0
50
100
150
200
250
300
350
Increased Consumption Charge = $3.10*
Increased Demand Charge = $504**
*
**
Consumption charge includes regulatory and debt retirement charges.
Demand charge based on a charge of $6.00 per kilowatt.
WEEK 3 WEEK 4WEEK 2WEEK 1
smth ot dma Pak a sa
Consider the load prole o this company. By elimating the spike in
consumption, they could have saved over $500 on their electricity
bill or the month.
-
7/30/2019 Managing Electricity Costs Manufacturing
5/11
Managing Your Electricity Costs A Guide or Manuactu
Unlike most people, Brian Cross doesnt mind
being called a control reak.
In his capacity as Manager o Technical Services
or Zochem, Canadas largest zinc oxide
manuacturer and distributor, Cross is overseeing
the installation o sophisticated control systems
and devices at the companys Brampton plant.
And according to Cross, these technological
enhancements are already resulting in signicant
process improvements, output increases and
energy savings. We started by analyzing our
processes and then investing in the best
technology available, he said. These can be
high-cost items, but they give excellent process
control capability.
Established in 1933, Zochem is a division o an
integrated copper and zinc company, Hudson Bay
Mining and Smelting Co. Limited, which began
mining and smelting operations in Flin Flon,Manitoba in 1927. Capable o producing a
number o oxide grades, Zochem supplies a broad
range o industry sectors. Its products are used to
manuacture everything rom rubber tires, brake
pads and industrial lubricants to animal eed,
crop ertilizers and surgical tape.
Like most manuacturers, Zochem is always on
the look-out or ways to improve the eciency,
and cost-eectiveness, o its operations. While
natural gas uels most o Zochems production
stages, nearly 70 per cent o its electricity
consumption stems rom the use o induction
ans and air compressors used to clean lter
cartridges. One major change implemented in
recent months is the replacement o ve large
ans with 23 smaller ones, which allow Crosss
team to ocus the air fow exactly where its
required. More targeted air delivery has already
translated into reductions in energy consumption.
Traditional polyester elt lters in the baghouse
have also been replaced with Gore-Tex. Rather
like a gloried vacuum, the baghouse is simply a
device that removes solid particles rom exhaust
gases as they fow through a large cloth bag. A
durable, breathable, easy-to-clean material that
resists degradation at high temperatures, Gore-Tex
has improved the overall eectiveness o the
ltration process, resulting in better eciency
and ewer emissions.
Control o all major production equipme
Zochem has also been shited to program
logic controllers (PLCs). These specializ
computers are typically used in the auto
industrial processes, and allow compone
turned on and o remotely. Its extrem
wasteul i you have machines running w
theyre not required, Cross said. PLCs
allowed us to reduce our electricity usag
as our equipment maintenance and repa
Cross is also installing variable requenc
(VFDs) on the acilitys induction ans a
compressors. VFDs are electronic contro
that adjust the speed o an electric moto
modulating the power being delivered. T
provide continuous control, matching m
speed to the specic demands o the wo
perormed and allow operators to ne-tu
processes while reducing costs or energ
equipment maintenance. Ater a two-yea
period, Cross expects to see annual elec
cost reductions in the range o $30,000
typical 100 horsepower (hp) compresso
substantial savings or a company with a
electricity costs in excess o $700,000.
results will be expected when this is ap
induced ans (greater than 900 hp).
Plant operations will soon be controlled
SCADA (Supervisory Control and Data
Acquisition) system, which will allow Cr
monitor equipment status and measure
consumption at key points in the system
the cost o the SCADA system is not ins
Cross eels the investment is worthwhile
cant make good decisions without good
said Cross. By identiying which proces
consume the most energy, the SCADA sy
give us a good roadmap or how to pursu
energy savings opportunities.
Energy conservation and waste reductioabsolute priorities or the company and
management team. Environmentally,
and ethically we must take energy eci
seriously, Cross said. We cannot cont
take this critical resource or granted.
chm:
c atmat ppt
y cat ma
Zchm ta phtcat ct ytm
a c at th cmpay Bampt pat. Th
tchca hacmt a aay t
fcat pc mpmt, tpt ca
a y a.
-
7/30/2019 Managing Electricity Costs Manufacturing
6/11
Managing Your Electricity Costs A Guide or Manuactu
eduCing eleCTriCTY CosTsoosTs Your BoTToM line
quat at ulla eugait venibh eugait ulputem do digna autet lore
psum iure min et, conse consecte acil deliquam, quissi.
ptatue eu acilit num et ad mod dolorem zzrit lortie acidunt
nisl ea commy nostrud magniscil etueros exero dit et wis nis
loreet wismolu mmoloborem qui blam ing elis dolor suscip
liqu amcommo dolorpero dio Im quat at ulla eugait venibh
gait ulputem do digna autet lore dipsum iure min et, conse
nsecte acil deliquam, quissi. Uptatue eu acilit num et ad
od dolorem zzrit lortie acidunt venisl ea commy nostrud mag-
scil etueros exero dit et wis n is doloreet wismolu mmoloborem
i blam ing elis dolor suscip eriliqu amcommo dolorpero dio.
Pt y a t y pat
th ft tm a a
akabt. lk a a y may
f m y ay y a jt
by mak m ma cha.
w are you actually using electricity? Understand-
g this simple question will drive all your energyanagement initiatives.
entiy what machinery and processes are the main
nsumers o electricity and determine how much
ey cost to operate. Find out when machines are
nning what time o day they operate and whether
eir running times overlap unnecessarily. There are
ely some savings that can be achieved with little
ort or investment.
re are some examples o how you can make small
ergy savings* add up:
f you are using an air compressor to sweep the
foor, an industrial vacuum cleaner will do a better
ob at less than 10 per cent o the cost.
That old, dirty pop vending machine in the
caeteria could be costing you $550 a year in
electricity alone.
0 four-foot uorescent tubes running 24/7 cost
more than $300 a year do they really need to be
on all night?
osts are based on 2006 prices including both demand and
ergy charges)
wareness o your energy costs can be a signicantntributor to urther savings. Perorm an audit
all equipment and processes so you know where
ur energy dollar is being spent. Even posting
eration costs on each piece o equipment sends
e signal to employees to think about how electric-
is used throughout the acility. You may consider
etering within your operations to get an ongoing
cture o where the highest levels o electricity are
ing used.
Take a look at the big picture. I you have an
interval meter, your LDC can provide a demandprole that will tell you when you are using the
most electricity which you can compare with your
operation schedules. Many LDCs provide these
proles online, so you can check in on a regular
basis between billing periods to evaluate progress.
Match the Need
The key to energy management is to make sure you
use only the electricity you need and then get the
most out o the energy that you are using.
Get started by cutting out waste. Turn o equipment
thats not needed. For example, you may be running
lights, pumps, conveyors and other equipment
that arent actually being used. You may also be
losing energy through poor maintenance. There may
be leaks in your systems that are orcing your
equipment to work harder and use more electricity
just to maintain required output levels. For example,
a one-quarter inch air leak in a compressor
system could drain enough energy to run 300
60-watt lamps.
You can also cut waste by using the correct equip-
ment settings or the job. Air compressors are oten
set at the level to meet the highest need and, as a
result, produce ar too much pressure or most other
applications. Rerigeration can also be a common
culprit o energy overuse. Make sure youre not
overcooling the space and not working against
yoursel by using lighting that creates heat, making
the rerigeration equipment work even harder.
2TAKe ConTrol oYour energY use
Check that as your processes change, you adjust
energy requirements accordingly. For example, itmay be that you dont need to exhaust as much air
because new processes have become more eective
at managing contaminants.
Maximize Energy Eciency
Once youve matched your energy use to the need,
make sure you do this in the most ecient way
possible. For example, i you want to slow the output
rom a pump or a an, slow the motor down, rather
than restricting the fow as this would still require
the motor to keep working at previous levels.
Its also important to maintain and operate equip-
ment according to manuacturers specications.
Simple things such as cleaning heat exchangers,
pipes and ducts regularly reduce energy use and
increase reliability.
Once youve covered the basics, you can s
explore what retrots or new equipment arto improve eciency. Lighting retrots are
the most common energy projects. Variabl
motors and compressors give you more con
your energy use and hence more control
costs. More inormation about energy ec
technology is on page 12.
Be Aware o the Peaks
Your production schedules may also have a
impact on your bill i you schedule more ele
consumption during on-peak periods than o
periods. I this is the case, you may want to
shiting some energy use to lower-priced tim
day. For example, heating, ventilation and a
conditioning (HVAC) controls can be program
take advantage o o-peak hours. Or, as pric
be lower in the morning than in the aternoo
may be some processes that could be pero
earlier in the day or even overnight.
The very best way to get buy-in
from our operators is to put
control of electricity in the hands
of those who use it.
A acc, act Maa, Hky ijct
M sytm lt.
COST
($)
HOURS
7 am 3 pm 3 pm 11 pm
1 2 3 4 5 6 7 8 1 2 3 4 5 6 7 8 1 2 3 4 5 6 7 8
11 pm 7 am
0
20
40
60
80
100
Aa Hy Ct t 1 Mw (c ay tta)
m nmb 2006 t octb 2007
This example compares the cost o consuming 1MW during
three eight-hour shits.
-
7/30/2019 Managing Electricity Costs Manufacturing
7/11
Managing Your Electricity Costs A Guide or Manuactu
Ask Al Fiacco what it takes to implement a
major change in energy management processes
and hell give an unequivocal response: support
rom the top. Having the commitment o the
president is absolutely essential, he said.
I the president doesnt stand by the project
and make it a priority or the entire senior
management team, it will never trickle down
to the plant foor.
Fiacco is the Facilities Manager or Husky
Injection Molding Systems Ltd., a Bolton-based
manuacturer o injection molding machines
and components, hot runners, robotics and
integrated systems. Founded in 1953 by Robert
Schad, Husky is one o the worlds leading
suppliers o injection molding equipment and
services to the global plastics industry. Since
the late 1990s, Husky has broadened and
diversied its oerings to include solutions
or the packaging, automotive and
telecommunications markets.
With annual electricity costs totalling several
million dollars, good energy management
practices are an absolute priority. In act, energy
eciency is entrenched in the companys
Guiding Principles. We practice proactive
environmental responsibility, the sixth principle
reads. Energy ecient buildings,
comprehensive programs to minimize waste
and other highly visible practices demonstrate
our commitment to the environment.
This ocus on environmental responsibility
has earned Husky considerable recognition
in Canada, the United States and Europe.
The company was also eatured in Report on
Business Magazines 50 Best Companies
To Work For In Canada or ve years since
2000 alone.
Huskys Canadian headquarters are spread
across a 54-acre campus with ve buildings and
a total area o 863,000 square eet. Total
demand at the site is seven megawatts (MW),
with the three testing and machining buildings
consuming the lions share o electricity.
Fiacco says Husky has taken a proactive
approach to managing its electricity
consumption and costs. The company recently
purchased and installed an engineered
conditioning system that is showing tre
results. The system has several importa
eatures:
It improves and stabilizes voltage sup
which results in improved energy qua
equipment eciency and longevity, a
energy savings.
It shields against surges, transients a
spikes, which protects equipment at
It lters broadband harmonics, which
line losses, demand and consumptio
It improves the power factor, which o
electricity quality and eliminates cha
the LDC.
Together with lighting and HVAC retro
equipment upgrades and control system
improvements, the introduction o a po
conditioning system has helped Husky
13.7 million kWh o its annual energy
consumption. With a total investment o
than $2 million in this program, the va
energy projects have paid or themselve
in less than two years.
While technology is absolutely critical t
new-ound energy savings at H usky, the
other actors. Fiacco and Huskys Glob
Management team launched a multi-a
training initiative in late spring to help
equipment operators understand energ
eciency opportunities at the plant. O
the products emerging rom the trainin
was a detailed checklist o things to do
leaving or the night including such o
things as shutting o equipment not re
or the next shit, turning o unnecess
lights, and shutting o the exhaust and
conditioning systems.
We said to our employees, Heres whe
can help, Fiacco explained. The very
to get buy-in rom our operators is to pu
o electricity in the hands o those who
Hky ijct
M sytm lt.:
n y tch
ppt taabty
Tth th ht a HvAC tft, qpmt
pa a ct ytm mpmt, th
tct a p ct ytm ha
hp Hky ha 13.7 m kwh t a a
y cmpt.
-
7/30/2019 Managing Electricity Costs Manufacturing
8/11
Managing Your Electricity Costs A Guide or Manuactu
demand during peak periods. Ultimately these
programs contribute to the overall reliability othe system and reduce the need to build additional
generation capacity just to meet isolated spikes
in demand.
Most companies participate in demand response
programs through aggregators as their individual
contribution might not be large enough to meet
eligibility requirements.
emcy la rct Pam (elrP)
The IESO provides incentives or demand reduction
during critical peak periods. Participants in the ELRP
are notied when they are needed to be on standby to
reduce energy and will receive payment o $15 per MW.
And i called upon, they can receive up to $600 per MW
or actual measured and veried reductions. This
program reduces the need to make emergency energy
purchases and voltage reductions when the power
system is strained.
dma rp 3
The Ontario Power Authority (OPA) oers contracts
to companies to reduce load during the most valuable
100 to 200 hours o the year. Participants make
themselves available during those hours or potentialnotices to reduce load and receive payments or both
availability and actual energy reductions, in return.
rc th payback p y
y fccy pjct by patc
ct pam. o btt
cat y ct by tak
pat ma p pam
a a-ht t.
Incentive Programs
There are many options when it comes to energy
eciency incentive programs. Some are designed to
get you started, others support more costly, sophisti-
cated energy management initiatives. Here are a ew
that will help you reduce payback times or your
energy eciency projects.
Electricity Retrot Incentive
Program (ERIP)
This program, oered by LDCs in partnership with
the Ontario Power Authority (OPA), provides unding
or the purchase o energy-ecient technologies.
Eligible technologies include lighting retrots,
premium eciency motors, and ENERGY STAR
rated power transormers and air conditioning units.
Custom projects are also eligible or incentives o
$150 or each kilowatt o demand reduction.
ecoENERGY Retrot Incentive
or Industry
Natural Resources Canada will provide small and
medium-sized businesses with up to 25 per cent
o the cost o retrotting the building envelope or
existing systems and equipment, with a maximum
o $50,000 per application. Projects must have a
simple payback period o more th an a year.
Demand Response
In recent years, demand response has emerged as
another avenue or businesses to leverage their
electricity use to improve their bottom line. Today,
there are a number o demand response programs
that provide incentives or companies to reduce
4use inCenTives ToYour AdvAnTAge
oc y ha a a th
pata cha that ca b ma
t mp fccy, y ca b
t k at m btata tmt
tch.
hether its new equipment or retrotting existing
cilities, manuacturers have a number o optionsey can pursue.
nding the right technology to t your need can
a challenge, but can bring with it signicant
yback in terms o costs savings and environmental
nets. Do your homework to nd the technologies
at will help you on your way to achieving your
ergy savings targets.
res a checklist o some o the technologies you
ay want to consider as part o an energy manage-
ent plan:
ht rtft: Industrial lighting applications
e becoming increasingly sophisticated oering
gnicant savings and improved illumination.
witching rom T12 to T8 fu orescent lightbulbs can
ave 20 per cent o your lighting bill. Automated
ntrols can add to your savings by light-harvest-
g or switching o or dimming lights when natural
ht is available.
jtab sp d: Control pumps, ans and
nveyors at the source by installing adjustable
eed drives (ASD) on the motors. ASDs can ampliy
ur savings. A centriugal an or pump operating at
l speed and hal fow will require less than a
arter o the energy o a xed speed an or pump
at is dampered or throttled to the same fow.
ab sp A Cmp:Air compressors are
ronically inecient machines. They require a lot
energy or a relatively small output. Tackle this
allenge by using a variable speed air compressor.
variable speed air compressor at minimal air
livery would use a quarter o the power o a xed
eed air compressor.
HvAC Ct: Heating and cooling systems can be
amongst the most energy intensive aspects o yourbusiness. Upgrade heating, ventilation and air
conditioning systems so that you use no more or no
less than needed. Chillers and other HVAC equip-
ment can be pre-programmed to gear up during
o-peak times to take advantage o lower prices, or
scale down during price spikes to lessen the impact
o higher prices.
rat:Rerigeration machines that provide
cooling or manuacturing processes and acility
space can be signicant consumers and wasters o
energy. When its time to replace this equipment,
modern chillers can oer attractive eciency
improvements. As with other equipment, rerigera-
tion chillers can benet rom controls that sequence
multiple smaller compressors in order to moderate
demand or use speed control to vary the capacity o
the whole rerigeration system according to the need.
P act Cct: Investments in capacitors
and other equipment to improve the power actor
can reduce demand charges. This equipment helps
align current and voltage so that your acility draws
electricity more eectively rom the distribution
system. Power actor correction projects oten result
in 10 to 15 p er cent reductions in demand charges.
Energy management is not about compromising it
can enhance your processes. Nowhere is this more
evident than in adopting new technologies to
increase energy eciency.
3ind THe rigHTTeCHnologY
-
7/30/2019 Managing Electricity Costs Manufacturing
9/11
Managing Your Electricity Costs A Guide or Manuactu
Ktz ectpat ic.:
gat
hh ma p
it ta Ktz ectpat i c. t ha a
ab ppy y at a tm. Th
pmpt thm t t back-p at hch
pay m ay tha .
Its not every day you have the opportunity to
earn up to $800,000 annually by not consuming
electricity but Kuntz Electroplating Inc. is
acing that very scenario.
A amily-owned and operated business since
1948, Kuntz is one o North Americas premier
metal nishing operations or original equipment
manuacturers o steel and aluminum products.
Headquartered in Kitchener, Kuntz has 600
employees responsible or the design,
development and application o electroplating
products and specialized perormance coatings
or clients like Harley-Davidson, General Motors
and Ford.
Our business is very energy-intensive, so
electricity is a considerable cost, said Robin
Leach, Environmental Manager or Kuntz.
It is absolutely essential that we have a reliable
supply o energy at all times.
This need or reliability prompted the company
to invest heavily in back-up generation in the
mid-90s. Since that time, urther investments
have been made, and the acility now has ve
clean-burning natural gas-red generators with
a total installed capacity o 4.1 MW. Waste heat
rom the electricity-generation process is
captured through low-pressure boilers that
produce steam used or their plating process.
The generators were rst installed at a time
when natural gas was relatively inexpensive.
Since that time, Kuntzs calculations have
indicated that generating their own electricity
no longer made nancial sense. A new approach
was needed, which was provided by the OPAs
Demand Response 1 (DR1) program.
DR1 empowers customers to reduce their
electricity consumption in response to high
price conditions which can be indicative o
system peak loads or tight supply conditionson the electricity grid. Under DR1, Kuntz
generates electricity only when asked to by
the OPA, based on price and demand. The net
benet to Kuntz in the rst eight months has
approached $250,000.
Ater months o participation in the pro
Kuntz is now investigating DR3, the lat
initiative in the OPAs ongoing eorts to
stimulate demand management, conse
and generation among Ontarios high-v
electricity consumers.
DR3, Contractual Response Peak Loa
Shedding, has been designed to provi
OPA with additional contractual deman
response capability to reduce demand
power system managed by Ontarios IES
Participants, not participating through
aggregator, must have a demand respo
capability in excess o 5 MW to receive
payments or their ability to cut consum
on demand, when the IESO identies r
local or general system reliability.
While Kuntz has not yet signed on the d
line, Chie Operating Engineer Keith La
eels there is considerable upside to
participating in DR3. We have worked
closely with our demand response part
Energent, to quantiy the impact o par
in DR3, he said. On the surace, the
are pretty compelling. According to La
calculations, Kuntz stands to earn up t
$800,000 annually over a ve-year ter
For its part, Kuntz would agree to shed
load rom the provincial electricity grid
through conservation or generation, wh
requested by the IESO or a maximum
hours per year. The company would als
be on stand-by or up to 1,600 hours a
To achieve the 5 MW minimum genera
required by DR3, a considerable invest
new generation would be required. Ev
the nancial side o DR3 looks very att
Laycock said.
-
7/30/2019 Managing Electricity Costs Manufacturing
10/11
Managing Your Electricity Costs A Guide or Manuactu
A looK inside onTArios eleCTriCiTY MArKeT
ntarios Independent Electricity System Operator (IESO) is responsible or
anaging the provinces power system and operating the wholesale electricity
arket. It balances supply and demand throughout the province, 24 hours
day, seven days a week.
Hourly Price Adjustments
The hourly price is currently mitigated by a number
o adjustments such as the Provincial Benet and
the Ontario Power Generation (OPG) Rebate.
The adjustments will impact your overall electricity
costs, but you will retain the overall value o
shiting or conserving energy during high-priced
periods. More inormation about both adjustments
is available on the IESO website at www.ieso.ca/
rebates.
or More inorMATion on:
Your local distribution company
..ca/ftty
Electricity price inormation or businesses
..ca/b
Retail electricity contracts
..ca/ta
Joining the IESOs Emergency Load Reduction Program
..ca/elrP
The Ontario Power Authority
.pathty..ca
Conservation programs available province wide
.catba..ca
Natural Resources Canada Oce o Energy Eciency
..ca.c.ca
A exta 2,000 Mw 51 H
Ontarios electricity inrastructure is built
so that there is enough available generation
capacity to meet the highest d emand.
This eature is critical to ensuring reliability.
In 2006, or example, Ontario demand
peaked at 27,005 MW, but exceeded 25,000
MW or only 51 hours over the past two years.
And while the power system ably met thesedemand spikes, they did highlight the
ineciencies o having more than 2,000 MW
o power generation capacity that is only
called into production or those 51 hours
the equivalent o over two days. I these peaks
in demand are reduced, so is the pressure on
prices and the need to have extra generation
capacity just to meet a ew hours o demand.
The Independent Electricity System
Operator (IESO) manages the
provinces power system so that
Ontarians receive power when and
where they need it. It does this by
balancing demand or electricity
against available supply through
the wholesale market and directingthe fow o electricity across the
transmission system. Visit the IESO
at www.ieso.ca.
Canadian Manuacturers &
Exporters (CME) is Canadas
trade and industry associati
promotes the continuous im
ment o Canadian manuact
and exporting through engag
o government at all levels. I
mandate is to promote the ctiveness o Canadian manu
and enable the success o C
goods and services exporters
markets around the world. V
CME at www.cme-mec.ca.
a result, the price o electricity rises and alls
sed on a variety o actors such as demand,
e weather and the types o generation available.
r example:
Prices are generally lower on weekends and at
night. On weekdays, the price o electricity usually
peaks in the early evening as people arrive home
rom work.
Weather can have a tremendous impact on
demand. Extreme cold spells and heat waves oten
create surges in demand as people increase
heating and air conditioning. For example, eachdegree above 16 C creates an additional 380MW
o demand.
The amount of electricity that is available in the
market also infuences the price. Some generation
may not be available because o equipment
maintenance.
Price also depends on what types of generation
are available some cost more to operate than
others. As demand or electricity increases through
he day, the more expensive sources o electricity
are called up to meet that need.
alizing the ull benet o hourly prices will
quire a greater level o eort and understanding
electricity price patterns within your organization.
r example, ensuring that sta can respond to
treme heat alerts when the price may spike will
lp insulate your acility rom unusually high prices
d help support reliability o the system.
e IESO provides a wealth o inormation about
ectricity demand and prices at www.ieso.ca/
siness. Here you will nd current prices, as well
anticipated prices or the next day. You will also
d historical inormation that will help you
mpare your costs to what they might have been
the hourly price.
-
7/30/2019 Managing Electricity Costs Manufacturing
11/11
18 Managing Your Electricity Costs
ipt ectcty sytm opat
655 Bay Street, Suite 410
P.O. Box 1
Toronto, Ontario M5G 2K4
www.ieso.ca/business
Phone: 905.403.6900
Toll-ree: 1.888.448.7777
Fax: 905.403.6921
E-mail: [email protected]