Lessons from an Industrial Company that Increased Energy Efficiency in its Operations by 10 Percent
By: Keith Sultana, Senior Vice President of Global Operations and Integrated Supply Chain, Ingersoll Rand
Energy efficiency measures were once limited to large organizations with deep resources, but time has proven that all companies can take undertake them. Today, in every industry, organizations are setting greenhouse gas (GHG) emission reduction targets as part of corporate sustainability goals.
By taking a stepwise approach, including assessing the carbon footprint of your operations, coordinating with your facilities to implement appropriate upgrades, and engaging your supply chain partners in your goals, manufacturers of all sizes can achieve impactful emissons reductions and set a foundation for further sustainability initiatives down the road.
Environmental sustainability is core to how we run Ingersoll Rand. In 2014, we made a global climate commitment to increase energy efficiency and reduce GHG emissions related to our operations and products.
Two years ahead of our 2020 target, we’ve increased energy efficiency across our operations by 10 percent, and we continue to progress toward new goals like increasing the use of renewable energy. This experience has provided many learnings which can be used as a guide for other industrial companies as you set and pursue your own energy efficiency and GHG reduction targets.
The first step in approaching energy efficiency goals is to audit and benchmark current operations to see where GHG emissions can be reduced. One of the best ways to evaluate the energy use of physical operations is to install a building energy management system to gather and analyze energy data.
An energy management system provides a roadmap of energy use at each facility. It will also identify anomalies in system functions, helping local facility managers understand where upgrades could have the greatest impact.
With this information, facility managers should propose retrofit and upgrade needs based on priorities for their operations. Company leaders can, in turn, evaluate and approve proposals — whether for a single facility or several — based on contributions to reduction targets. The retrofit and upgrade projects should be organized on a timeline and prioritized based on cost, speed of impact and return on investment.
Focus on High-Impact Projects First
Each facility has its own needs and it is important to listen to those needs when making adjustments to increase efficiency. Rather than approach an entire facility at once, focus on projects that will have the quickest and most measurable impact as determined by the energy audit of your operations.
In our experience, the best payback projects are lighting if you are using anything other than LED, HVAC system upgrades and sub-metering with equipment. But your audit should inform your specific plan. Turning systems off at night should also be standard practice. Ultimately, good energy management across your facilities will ensure you have your bases covered as you take the next important steps toward energy efficiency.
At Ingersoll Rand, we conducted an energy audit of our large facilities and upgraded air conditioning systems, building controls and lighting, and eliminated energy leakage from compressed air systems.
After measuring, validating and reporting the results, we reduced energy use by 109,000 MM BTUs and electricity consumption by 22,000 MWh. This is the equivalent of not burning 26 million pounds of coal and powering 1,750 homes for one year.
Partner with Your Suppliers
Any industrial organization seeking to reduce its GHG footprint must engage its supply chain in solving the challenge. Suppliers who have similar environmental priorities and who provide materials, products and services that are most effective in helping your further your footprint reduction efforts should receive preference.
At Ingersoll Rand, we created a Global Supplier Council to set policies around energy efficiency, sustainability and safety. We measure where our suppliers stand today and we help them get started. Eighty-seven percent of our suppliers are willing to collaborate with us on sustainability initiatives and we are committed to helping them pursue sustainability goals so it’s mutually beneficial.
Evaluate New Energy Sources, Including Renewables
Once your company has implemented an operations strategy to reduce existing energy use, determine if a renewable energy investment makes sense for your long-term goals.
Begin by identifying which of your facilities are in the best locations for renewable energy sources like solar and wind. To do this, you need a solid understanding of your footprint, your current spend on energy and projections for use, and who your suppliers are. You also want to understand the opportunity based on where your facilities are geographically located as this impacts paybacks and incentives you can expect to receive across regions.
From there, determine the best financial model that can be applied to each location. This requires collaboration with legal, procurement and finance. You should also engage experts who have experience with investments in renewables to help you navigate the complexities, especially with the technical accounting. In addition to providing valuable insight into how to make the business case for new sources of energy, external partners can help you expedite progress.
In many cases, your first foray into renewables will be an investment in on-site renewable resources. Down the line, after meeting 10 to 15 percent of a facility’s demand with on-site renewable resources, look to scale outward with off-site transactions. Green tariffs, virtual power purchase agreements and virtual net metering are all strategies your company can explore to scale its global investment in renewable energy.
At three large manufacturing sites in the U.S. and China, Ingersoll Rand initiated or commissioned on-site solar installations to address 15 percent of the energy load at these locations. We took the next step in our renewable strategy through a PPA for wind energy. The PPA provides 100,000 MWh of wind power annually to replace 32 percent of the company’s U.S. electricity use with green energy.
Setting Down the Path
Every company’s path to energy efficiency and emissions reduction will be different, but the fundamental aspects of our journey serve as a good guide for any manufacturing company pursuing a sustainability strategy.
The undertaking can be daunting, underscoring the importance of adopting a methodical approach. By assessing the opportunities for greatest impact and payback, then breaking the effort down into manageable projects with timelines and expectations, you will have a clear roadmap for success.
One final piece of advice: don’t let your size or scale be a limiting factor. Companies of all sizes can, and should, engage in the effort to reduce emissions locally and globally. It’s not only good for the environment, but has become a factor for recruiting and retaining the best talent and, above all, it’s good for your business.
About the Author
Keith Sultana was appointed senior vice president of global operations and integrated supply chain and member of Ingersoll Rand’s enterprise leadership team in October 2015. Ingersoll Rand’s family of brands includes Club Car®, Ingersoll Rand®, Thermo King® and Trane®.
The global integrated supply chain (GISC) team under Keith’s leadership has responsibility for Operational Excellence; Global Sales, Inventory & Operations Planning (SIOP) & Materials Management; Global Procurement; Advanced Manufacturing Engineering (AME) & Quality; and Environmental, Health & Safety.
Keith began his Ingersoll Rand career in November 2008 as vice president, GISC for Industrial Technologies. His career progressed to include vice president, GISC for Climate Solutions, vice president, GISC for Trane North America and EMEA (Europe, Middle East and Africa), and vice president, Global Procurement. Prior to Ingersoll Rand, Keith was with General Electric for 17 years where he held various operations and distribution leadership roles. Keith has a bachelor’s degree in mechanical engineering from Michigan State University.