Two megatrends are driving industrial electrification. Companies want and need to find cost savings and reduce emissions. Replacing fossil energy sources with renewables and improving energy efficiency are their most cost-effective routes towards an emission-free future.
At the same time, the energy market is moving from combustion-based production to renewable electricity generation, primarily from wind and solar. Supply and demand are accelerating electrification together.
New electricity generation and energy savings
Investment is taking place across many sectors of Finland’s energy market. Wind farms and solar parks are being built at an accelerating pace, and the first hydrogen plants are starting up. Nuclear and hydropower remain important electricity sources.
Some electricity and heat production still relies on burning biomass. This may pose a future risk to sustainable energy production if the biomass’s origin does not support sustainability and combustion-related carbon dioxide emissions cannot be captured and utilised.
Alongside increasing electricity use, industry is making more efficient use of its energy streams. This reduces the need to purchase energy from outside.
Recovering and optimally using heat contained in process water, condensate and products can deliver significant energy savings at plants. Heat pumps can also use heat from the ground and air. Combined with smart electrification, this can save tens of per cent in annual energy costs.
Energy moves onto the management agenda
Previously, senior industrial management may have paid little attention to wasted energy or energy efficiency, because energy was seen primarily as another production input. It was available without major problems. When Russia’s war of aggression triggered an energy crisis, the issue moved much higher up companies’ and management teams’ agendas.
Investment priorities have also contributed to energy issues taking a secondary role. Industrial companies’ payback requirements may have prevented energy efficiency investments from proceeding. They have remained on the list year after year as investments directly related to the core business took precedence.
There is no need to change this situation radically: companies should continue to focus their resources on product development, improving production and developing sales.
Instead, energy efficiency development services should be agreed with an experienced energy partner. With such a partner, energy efficiency improvements can proceed as an energy service without the company making its own investment.
Understanding the energy balance is the foundation for improving efficiency
When a company starts electrifying its energy production and improving efficiency, it first works with its energy partner to establish an overall picture of its energy balance: what energy is used, where it goes and how much is wasted. The key is to identify improvements that initially deliver quick, clearly measurable results. A production plant can, for example, reduce purchased energy by improving heat recovery.
Longer-term objectives, such as emissions reductions, must not be forgotten. Actions targeting different goals should support one another. Changes should always be considered at system level, not merely as equipment upgrades.
Companies often have their own energy audits and efficiency plans that they can use with their energy service partner. Reviewing these openly often speeds up projects.
An energy service delivers savings
Once the plant’s energy balance has been established and preliminary improvements proposed, the company signs a preliminary agreement with the energy service provider. The provider then prepares a detailed project plan and cost estimate for the specific changes at the plant.
Based on the refined plans, the necessary equipment is procured and the plant’s energy system modified. These changes move the project towards jointly agreed, clearly measurable goals.
As this is a service, the customer pays for the benefits it receives. In return, it achieves clear emissions and cost savings from the day the equipment is commissioned.
Leave energy system development to a partner
Moving an energy system from combustion to electrification places entirely new demands on its management.
Electricity prices currently vary hourly, and next year they will vary every 15 minutes. Optimising production and consumption can bring substantial benefits. It is also possible to participate in electricity markets by offering demand flexibility.
Managing and optimising these different factors is best entrusted to a provider offering efficient energy operation as a service. Companies should invest above all in developing their own operations, rather than tying up resources in learning, operating and developing complex energy systems.
When improving energy efficiency, a company needs to allocate sufficient, appropriate resources, find the right partner and get to work.
In my experience, electrification and energy optimisation projects usually begin with an identified problem. This might be a rise in purchased energy costs, financiers’ requirements or even the retirement of a key person responsible for in-house energy production. Energy then moves onto the company’s agenda. A single trigger sets the company on a path towards more economical energy use and, through emissions reductions, more environmentally friendly operations.
- Perttu Lahtinen, Managing Director, Auris Energiapalvelut