Manufacturers link energy management to competitiveness

Industrial companies have yet to realize the full potential of operational advantages they could gain through energy efficiency initiatives, a Pike Research report suggests.

There is a reason you read a lot about what U.S. manufacturers are doing to cut energy consumption: they use almost one-third of the electricity that powers up the country on an annual basis. This is about green in the economics 101 sense, improving the bottom line.

But a new report from Pike Research suggests that manufacturers and companies in the industrial supply chain need to accelerate their energy efficiency initiatives even more if they are to remain competitive.

"New technologies are allowing great insight into energy procurement and use, as well as the management of energy as an input to the industrial process," said Pike Research vice president Bob Gohn, in a statement. "At the same time, a variety of assistance programs, plus new standards and certifications, are helping to drive energy performance intiatives into the organizational cultures of companies wishing to gain efficiencies in their industrial processes."

Energy management technology spending by manufacturers and other industrial companies will reach about $5.6 billion in 2020, compared with $960 million in 2011, according to the Pike Research report, "Energy Management Systems for Industrial Markets." That is a compound annual growth rate of more than 20 percent.

Unilever is one example of a global manufacturer putting a stake in the ground when it comes to locating its plants in places that offer good energy options and opportunities to use water more wisely. The company feels so strongly about the operational practices used for its new plant in Mexico , for example, that its plans to emulate them in more than 250 locations around the world.

Intel's LEED Silver certified plant in Ocotillo, Ariz., also offers another example of leadership that not only plays nice for the environment but that provides demonstrable operational paybacks for the giant technology company.

Overall, I think that most businesses don't realize that by incorporating issues that have traditionally been associated with corporate sustainability -- such as energy costs, water considerations, transportation alternatives -- are missing out on a potential goldmine of operational savings.

(Image by Asif Thebes, courtesy of Stock.xchng)

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This post was originally published on Smartplanet.com