As technology advances and more information about industrial energy use becomes available, the industrial energy management software and services market will evolve rapidly. According to an October 2011 report from Pike Research, under current conditions, the U.S. market for industrial energy management software and services will rise from $960 million in 2011 to $5.6 billion by 2020, which is a compound annual growth rate of 21.6 percent. The firm anticipates that the services segment will represent more than 85 percent of the total market during the forecast period.
According to Paul Scheihing, technology manager at the Department of Energy’s (DOE) Advanced Manufacturing Office, the savings potential in the industrial sector for cost-effective energy-efficiency improvements is about $30 billion per year.
“McKinsey [and Co., a global management consulting firm] estimated the savings potential would be achieved with a total capital investment of slightly over $100 billion,” he said.
For electrical contractors (ECs), “there is a very large and growing opportunity for energy management throughout the supply chain, from power generation through consumption,” said Marcia Walker, who, until recently, was the offer marketing manager at Schneider Electric’s Industrial Energy Solutions.
Several key drivers for growth in the industrial energy management software and services market include expanding populations and energy-intensive applications that increase demands on an aging infrastructure. At the same time, supply sources have become more constrained.
“Many customers are becoming concerned that the time will come when they won’t have energy when they need it,” Walker said.
Growing interest in energy management will continue as companies embrace it as a way to manage their energy costs or to meet corporate sustainability goals. Measurement and verification of energy savings also will be a major driver to qualify for financial incentives potentially offered by utilities or other energy--efficiency programs, Scheihing said.
“Supply chains are increasingly incorporating sustainability practices into their policies, and major OEMs and retailers may request their suppliers to adhere to energy management practices,” he said.
Additionally, the International Organization for Standardization (ISO) identified energy management as a priority due to the significant potential to save energy and reduce greenhouse gas emissions worldwide. According to Scheihing, the ISO 50001 standard could influence up to 60 percent of the world’s energy demand, based on its broad applicability. The standard defines the requirements for the development, implementation, maintenance and improvement of energy management systems and is designed to help organizations continuously improve the performance of both commercial and industrial buildings.
To help ensure ISO 50001 fulfills its goal to drive major improvements in U.S. energy efficiency, the DOE is working with industry to develop the superior energy performance (SEP) certification program for industrial and commercial facilities.
“Electrical contractors may be most interested in the SEP’s certified practitioner opportunities for implementing energy management systems or conducting energy-system-specific assessments,” Scheihing said.
These credentialing programs are designed to enhance contractors’ understanding of energy management systems and enable them to help their industrial customers take a systematic approach to continually improve their facilities’ energy performance.
As customers embrace energy management, they will ultimately save on energy costs, which may free up resources for investment in new equipment or other projects that benefit ECs.
“In addition, demand for value-added services may rise as customers become more knowledgeable and advanced in energy management and require more specialized assistance from contractors to identify further improvement opportunities,” Scheihing said.
As in the commercial sector, industrial energy management programs offer ECs the opportunity to promote and perform more meter and submeter installations.
“The challenge is in the variation of available meter brands and models on the market. Since each is a little different, the contractor needs to be willing to invest in some product education,” said Bill Schiel, director of energy management solutions for Invensys Operations Management, Plano, Texas.
Many technological advances revolve around integrating automation, controls, manufacturing execution systems, enterprise resource planning and smart grid systems to provide holistic energy management.
“Such an integrated approach was not possible until very recently, and although it offers great opportunities, it also requires knowledge in areas that might not be familiar, such as industrial network and communication protocols, and a more thorough understanding of the overall system of a production facility and its place in the energy ecosystem,” Walker said.
Energy management allows for reducing industrial energy use without major capital investment, and as Schiel said, ECs can create value by knowing a wide range of products, technologies and connectivity capabilities.
BREMER, a freelance writer based in Solomons, Md., contributes frequently to ELECTRICAL CONTRACTOR. She can be reached at 410.394.6966 and firstname.lastname@example.org.