The Top 5 Industrial Energy Efficiency Projects for Maximum Payback

Energy efficiency projects are slowly gaining traction and working their way “upwards” through organisations, gaining both strategic importance and recognition. As energy efficiency projects move away from sitting solely with the “lowly” facilities manager, and arrive at the desk of the CFO, we’ve compiled our list of the projects that will be of most interest at a senior level.

(1) Data and Energy Management Systems

As a wave of regulatory driven energy audits sweep across both Europe and North America, it is clear the starting point for any action is information and data. Audits provide a valuable snapshot but are, by their nature, frozen in time. What is required is intelligence, and intelligence is gained from the capture, application and manipulation of data points over time to determine trends, spot outliers and help monitor and measure progress.

Consequently, it is widely considered that the starting point for a capital investment is in the creation of a data collection process or system. A vast myriad of solutions exist from basic processes recorded in Excel to varying degrees of complex systems that can cope with multi-vector, multi-site inputs that can help determine a project pipeline of actions from “soft” human “change behavior” campaigns to hardware and large capital investments.

Many companies have implemented Energy Management Systems but as their businesses change, as software changes and the scope for implementation also changes, ensuring the EMS is fit for purpose is a project in itself. The EMS should help both generate and prioritise the Industrial Energy Manager’s pipeline of projects.

(2) Monitoring and Leakage Detection

Voltage Icon Symbols. Multicolored Paper Stickers. VectorSub metering is a well-established approach to measuring the electrical flows and losses around large plants and sites. Now we are entering a period of huge technology change, specifically in the monitoring and detection of leakages from all the major energy vectors in real-time and in a cost effective way. Sensor technology has the potential to make a big difference in this field and at this time is becoming increasingly competitive. Energy Management Systems are becoming more granular in detail (see point 1) and have a myriad of operating benefits beyond identifying losses and making a system more energy efficient. Anomalies in voltage and harmonics can help predictive maintenance and lower outages and downtime, thereby improving productivity. Other vectors such as steam, water/condensate, fuel and compressed air can be brought together to provide a holistic approach and give a thorough check on entire processes. When measuring flow, a number of possible technologies can be installed depending on the required accuracy and potential savings.

Beyond continual monitoring even simple leakage detection audits, especially in energy intensive vectors such as steam and compressed air, can yield impressive results. For example the air compressor company, Mattei, have recorded improvements of over 80% and payback on new compressors of less than 12 months simply by monitoring compressed air pipes. As is often remarked – this is a similar business to one’s health, problems are only identifies through testing.

(3) Variable Speed Drives and Smart Motor Control Systems

Industrial electricity consumption has been steadily rising and statistics from the ABB Global Trends in Energy Efficiency Report show that industrial electricity consumption now represents over 25% of total global electricity demand. Drilling down to examine that usage further, an IEA Report estimates that electric motors use ‘between 43% and 46% of all global electricity consumption’, there are several hundred million industrial electric motors installed globally and they are the single largest source of electricity use in the world.

A huge 90% of these motors are run at total full speed and use mechanical means to regulate output. This is similar to driving with your foot on the accelerator whilst simultaneously braking!

Variable Speed Drives (VSDs) often use large industrial electric motors whose speed can be adjusted by means of an external controller. They are becoming prevalent in process control and help saving energy in plants that use many powerful electric motors and are especially effective in saving energy in pump and fan applications. By better matching speed to application, energy savings of up to 30% can be gained. The CAPEX cost of motors can be as little as 8% of the life cycle costs of a motor (92% is the operational OPEX cost of the electricity) which means there is a strong business case for investing immediately because ROI can be achieved in less than 12 months.

(4) Waste Heat & Cogeneration

Heat and specifically the utilisation of waste heat through a variety of evolving technologies is a typically overlooked opportunity. Modern heat exchangers, cogeneration microturbines and even thermal de-stratification blowers that work by blowing heat down from ceilings can all assist in creating valuable energy savings. Thermal imaging surveys are often used to reveal the quantities and sources of waste heat.

The biggest capital investment can be around a CHP cogeneration plant, these range in size from mini 250 KW units to large scale 10 MW. These onsite power plants can be configured as cogeneration plants which use waste heat to heat boilers or as trigeneration plants where they can also use the heat to run absorption chillers which in turn can drive HVAC systems. Or even modern quadgeneration plants which combine electricity, heat and cooling with the additional recovery of carbon dioxide from the exhaust gas. This carbon dioxide is scrubbed and can be used in many industrial processes, especially in the food/drinks industry or even to enhance the growth of plants in greenhouses etc. This CO2 could even be sequestered to reduce carbon emissions.

(5) Lighting

Lighting consumes around 20% of total global power consumption. Much has been written and driven by the movement away from fluorescents and sodium metal halides to LEDs and induction lighting. Great savings have been well documented by the movement to modern lighting solutions. There are however multiple options available depending on the type of lighting required, location, usage, switching cycles. Sensor activation is an obvious way to reduce wastage, some LEDs can be sought to fit existing fittings, induction lighting can be more suitable and free lighting can even be better accessed with the regularly cleaning of windows or skylights.

Light BulbsWhen presenting lighting investments an often under reported benefit is that LEDs have a much better uniform effect improving low lit/high lit areas. Safety and employee health also benefit and recent studies have shown that employees are no longer exposed to the colour spikes emitted by fluorescent lighting.

Lighting comparisons, supplied by Challoch Energy

Type of Lighting Watts Average Service
Sodium metal halide 400W 8000 hrs
Induction lamps 200W 65,000 hrs
LED 150W 35,000 hrs

In addition it is important to use full lifecycle costs for lighting projects including both CAPEX and OPEX costs. Within OPEX it is important to factor in maintenance, changing light bulbs and understanding loss factors such as high temperatures. For example induction lighting often provides lower total lifecycle costs but higher capital costs. LEDs work well in cooler environments but they burn brighter (and thus shorter life) when kept at 35 degrees in the ceilings. It is important to include the labour cost of changing bulbs as some large installations of say 50-100,000 lights can require pure lighting staff, whose primary task is simply replacing bulbs.


There is clearly scope for massive technology and cultural change within the industrial sectors. McKinsey state in their Greening the Future Report 2015  that “operational and behavioural improvements can reduce energy consumption by 10-20% and investments in energy efficiency technologies can boost that to 50% or more”. The projects that we have identified will contribute significantly to energy efficiency but will deliver the most benefit when executed as part of a company-wide energy transformation that includes cultural, technical and operational change.

Contributor: Nad