Manufacturing News

Innovative thinking needed

The need to reduce our carbon footprint is hard to deny and represents a new set of challenges for Australia’s manufacturing industry, as Derek Parker reports.

THERE has been a sea-change in the Australian manufacturing sector, and environmental issues, especially the use of energy and the emissions of carbon, have moved from a peripheral concern to a first-order issue.

Some of the reasons relate to the soaring costs of energy seen in 2007 and 2008, the high media profile of carbon-related issues, the move towards an emissions trading system, and new rules for corporate reporting on environmental matters.

Ben Hamilton, GM for Corporate Strategy with Country Energy, a NSW government business enterprise serving around 870,000 customers, is seeing an increasing number of customers turning to the company for advice on using energy more efficiently.

Among the country’s leading energy suppliers, Country Energy has probably done the most to encourage the best use of energy.

“That says a lot about how this issue has moved up the business agenda. We have seen a lot more companies recruit people dedicated to sustainability issues, including emissions, and much more involvement from people on the financial side,” he told Manufacturers’ Monthly.

“Our response is led through a separate unit – Energy Answers – which provides advice and audit services, including technology such as thermal imaging to identify sources of heat loss.

“It might seem odd for an energy company to be helping customers use less energy, but we see it as a demand management issue, and of course there is the point that the environment is an issue for everyone.”

For many companies seeking to reduce their carbon footprint, energy auditing is often the crucial first step, to both establish their existing profile and to chart the course ahead.

Energy auditing is hardly new but until recently it largely had an engineering focus, aimed at helping large companies lower their energy bill by buying off-peak power or negotiating better deals with power companies.

While this remains one aspect of the energy auditing sector, a more common purpose now is to look at the larger picture of environmental impact.

Danin Kahn, owner and director of Todae, a Sydney-based firm that specialises in energy auditing, notes that several of his clients became serious about the subject when they have began expansion plans, only to be told by their electricity provider that additional power could only be obtained at great cost or by setting up their own generator. As a result, those companies began to look for ways to use power more effectively, so more could be done with the same input.

“The idea of power availability being a constraint on growth is going to become more pronounced in the future,” said Kahn.

“And we have found, when we went in to do the audit, that in many cases they could not only reduce their power use sufficiently to afford the expansion, but even more.”

Kahn and Hamilton agree that very common sources of energy waste are poorly-managed heating and cooling systems, and lighting which does not use energy-efficient globes and tubes. Some of the biggest benefits come from changes in behaviour, such as turning off unused lights and machines.

“Much can be done with staff training, which usually does not entail a lot of expenditure,” Hamilton said.

“In fact, Country Energy set up an internal awareness program, encouraging energy efficiency in the workplace. We saw it as important to have our own house in order – that’s 4000 employees – if we were going to give advice to others. Both with our own people and in the companies that we have assisted, we have found employees to be very receptive to the idea of reducing their company’s carbon footprint,” Hamilton said.

Measure to manage

Kahn emphasises that even while reducing emissions is important as an end in itself, he is very aware that companies have to meet a financial bottom line.

“When we prepare a report, we look at the anticipated return on investment,” he said.

“A common outcome is to show that savings of 10% could be made through behavioural change or through small, simple investments, which we describe. Then we provide a list of recommendations for the longer term, which might relate to purchasing or upgrading of equipment.

“Generally, larger outlays to reduce energy use will pay for themselves within a year. The cost of an energy audit is recouped very quickly – in fact, it really should be seen as an investment rather than a cost.

“I think it is important to put things in terms that company decision-makers can readily understand. We will measure a client’s power use against industry standards, and against best practice.

“We also try to explain it in ways that are relevant to people’s experience. Expressing a company’s energy use through an equivalent number of extra cars on the road, and the reduction in the number of cars due to particular remedial actions, is a picture most people can get.

“It’s an old rule, more relevant than ever when you’re talking about reducing energy use: what gets measured well, gets managed well.”

New-gen thinking

An area often overlooked in plans to reduce emissions is plant and equipment, even though machinery can be a key factor in a company’s carbon footprint.

“It can be difficult to measure the energy profile of equipment if you don’t have the right expertise and the correct instruments,” says Max Light, Sales Director of CompAir, a major provider of equipment for the manufacturing sector.

“In particular, a lot of air compressors currently in use were designed decades ago, when energy use was hardly a concern. They tend to become a forgotten utility, but they can be incredibly costly in energy and money.”

Light points out that CompAir has introduced a service that has provided some clients with cost savings on compressed air by up to 30 per cent.

The service, called Airnergy Analysis, is a complete systems approach based on a comprehensive demand-side audit of a business’ compressed air usage with a full measurement of energy use, airflow rates and pressures.

From this, a management plan is developed, as well as comprehensive independent report on leak correction, maintenance upgrades, system operations and utilisation.

The payback period from implementing the report recommendations, according to Light, can be as short as one to two years. An added benefit can be the reduction in overcapitalisation of equipment as a result of upgrading or expansion, based on the intelligence provided by the Airnergy Analysis.

“We have also introduced a new generation of equipment which is much more energy-efficient than traditional options,” Light says.

“For example, our new Quantima variable speed compressor has no gearbox and no oil, and operates with only one moving part spinning in a magnetic field. A 300kw Quantima can cut carbon dioxide emissions by nearly 2000 tonnes over 10 years.

“One of our major customers, the Murray Goulburn Co-operative, installed a Quantima system at its Leongatha plant in Victoria, after an audit. In five months, carbon emissions were down by 1900 tonnes, and energy and maintenance costs had been cut by $147,000. That shows how well it can pay to apply some innovative thinking to these issues.”

Assistance available

For manufacturing firms seeking funding assistance to their attempts to reduce their carbon footprints, an option that might be considered is the Commonwealth government’s $75m program, Re-Tooling for Climate Change. Administered by AusIndustry and designed for small and mid-sized firms, it provides grants of between $10,000 and $500,000, up to a maximum of one-third of the cost of each project.

An eligible applicant must be a non-tax exempt manufacturing company, with an annual group turnover of less than $100m in each of the three financial years before the year of application lodgement, and must be able to fund the costs of the project not met by the grant.

The third round of grant applications will open in June.

The Re-tooling for Climate Change program is one component of the Clean Business Australia initiative. Other programs in the initiative are the Climate Ready program, supporting the development of technologies that provide solutions for climate change, and the Green Building Fund, which will help building owners to improve the energy efficiency of existing commercial office buildings.

Another area of assistance is a set of tools for self-auditing, provided by the Department of the Environment as part of the AGO’s Greenhouse Challenge Plus program.

The downloadable tools are designed to assist with reporting of energy use through KPIs, together with worksheets and templates for the recording of data and improvements.

“As far as I can see, the new attitude towards energy and emissions is now institutionalised in company practice,” said Hamilton.

“Customers are looking to integrate innovative solutions and technologies into new premises to better manage energy use and carbon footprints in the same way that other customers are looking at improving existing operations and facilities. One way or another, the new way of thinking about carbon footprints is here to stay.”

Information about obligations under the National Greenhouse and Energy Reporting Act 2007 is available from the Department of Climate Change website, www.climatechange.gov.au/reporting/guidelines

The Greenhouse Challenge Plus energy audit tools can be obtained from website www.environment.gov.au/settlements/challenge/index.html

Information about the Re-tooling for Climate Change program can be obtained through the AusIndustry website, www.ausindustry.gov.au, tel 13 28 46 or by email at hotline@ausindustry.gov.au

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