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Energy savings in buildings, offices, and manufacturing plants has the potential to benefit your business, the economy, and the environment. By incorporating energy-efficient technology into your building design, maintenance, and operations, you can meet your benefit from the services provided by energy while saving money. More importantly, these measures and initiatives also contribute to a change in the way that economic growth impacts the environment. 

According to data by the United Nations Act Now, the energy supply sector contributes 35% of the total greenhouse gas emissions in the world. However, due to continued efforts to raise awareness of the impacts of energy use on the planet, the rate of growth in global greenhouse gas emissions has slowed. And in many countries, there is also a drop in overall greenhouse gas emissions. Data from the US Environmental Protection Agency (EPA) show a decrease of 7% in total US greenhouse gas emissions from 1990 to 2020. This change shows the positive impact of environmental efforts, including energy efficiency.

Meanwhile, energy efficiency is also beneficial to your business and the economy. Almost every building has the potential to cut its energy bills through energy conservation and the deployment of energy-efficient technologies. New buildings, designed to be highly energy-efficient, can have zero net energy use with the use of solar PV.

These savings can help increase your business’s profitability. Furthermore, taking action on energy efficiency creates economic activity and jobs. The Building Performance Institute Europe estimates that every 1 million euros invested in deep building energy efficiency retrofits create 18 jobs on average.

This report provides information about energy savings in buildings, offices, and manufacturing plants; strategies and tips are also listed.

Infographic of the most polluting countries in 2022

Why Is Saving Energy Important

If you’re a manager or owner, you must be wondering, “Why is saving energy important?” To answer this, you need to look at its implications for your business, the economy, and the environment. Focusing on energy efficiency in the design and operation of buildings provides a win-win solution. 

Data from the US ENERGY STAR show that a commercial building wastes 30% of its purchased enegry. These numbers translate into a higher utility bill for the energy that isn’t used. When you invest in energy-efficient building design, appliances, and fixtures and follow best practices, it leads to savings. Energy savings consequently lead to lower operational costs and more opportunities for profitability. Energy-efficient businesses have a higher profit margin, giving them more elbow room to either increase their prices or lower them to gain market share. 

Here are some of your business’s potential savings when you prioritize energy efficiency:

The importance of energy savings in the commercial and industrial sectors has greater implications than mere profit. Another reason why energy-saving is important is its significant contribution to sustainability efforts. Lower energy use leads to a drop in greenhouse gas emissions, less dependence on coal-fired power plants, conservation of resources, and reduced pollution.

According to 2020 data from the EPA, over 13% of total greenhouse gas emissions came from offices, commercial and residential buildings. These figures represent the potential impact of energy-saving technology due to sustainability efforts. As more companies recognize the benefits their businesses can reap by cutting energy costs, the more significant their impact will be in reducing greenhouse gas emissions that cause climate change. 

To understand why is saving energy important, here are some of the significant achievements made by the US ENERGY STAR‘s energy-efficiency program in 2019: 

  • It saved 230 billion kilowatt-hours of energy consumption.
  • It lowered over 170 million metric tons of greenhouse gas emissions.
  • It led to a cut of over $14 billion in energy bills.
 Infographic about increasing your house's resale value by hiring an energy auditor

Why Industrial Energy Savings Is Even More Important

If the commercial and residential industries can bring in a big change in sustainability efforts, imagine what the industrial sector could do. The US Energy Information Administration’s (EIA) report shows that the industrial sector accounted for 33% of US energy consumption in 2020. Unfortunately, a great deal of this energy is wasted through inefficient use. This wasted energy costs companies money, resources, and profit. Hence, energy efficiency should be a crucial part of the strategic energy management of all industrial facilities. 

To illustrate why industrial energy savings is even more important, let’s look at its impact on global energy demand during the COVID-19 pandemic when industrial and manufacturing operations were partially halted. The EIA made some of these crucial points:

  • Overall global energy demand decreased by 3.8% in 2020, considered the most significant drop in the past 70 years.
  • While many factors contributed to the decline, one factor is shifting energy demand from industrial and commercial to increased residential energy use.
  • The lockdown partially suspended economic activity, which dropped industrial electricity demand by 21% and reduced commercial electricity demand by 15%.

Furthermore, this reduction in industrial energy demand resulted in a significant positive impact on our environment. Here are two:

  • Global carbon emissions reduced by 5% in 2020.
  • Global coal demand plummeted with a reduction of 8% in 2020.

These changes show how much industrial energy use affects our global energy demand and the environment. So, when we support energy-saving initiatives in the industrial sector, we help  giant industrial companies save money while also making the environment a better place to live. 

Data on Energy Consumption in Industrial Sector

The industrial sector is an important player in global end-use energy consumption. Industrial facilities require massive amounts of energy to operate their machinery and equipment for production and manufacturing. In addition, they need more power for their lighting, heating, cooling, and other office operations. All these contribute to making an industrial building into a huge energy-using facility. 

Here is some data on energy consumption in the industrial sector. The first table shows the energy consumption of the four major industries according to USA’s Annual Energy Outlook Reference 2020.

Industry typePercentage shares of total industrial energy consumption
Manufacturing77%
Mining12%
Construction7%
Agriculture5%

The second table shows how an average manufacturing facility uses electricity, based on data from the EPA.

Uses in a manufacturing buildingPercentage of electricity consumption
Machinery50%
Direct uses (heating, cooling, ventilation, and other electrochemical processes)29%
Other non-processes17%
Boiler fuel2%
Not reported end-use2%
Infographic of the average US household electricity consumption

Reducing Energy Costs Fundamentals for Buildings, Manufacturing Plants, and Factories

This section provides you with strategies for reducing energy costs in buildings, manufacturing plants, and factories

1. Building Energy Benchmarking 

Energy benchmarking is a tool that several countries implement as it helps building owners assess the relative energy performance of their buildings. It compares your energy usage to similar buildings, looks at your energy history, and may evaluate if it passes state or local government standards, such as a building energy code. Furthermore, energy benchmarking is an effective way to evaluate if your building uses energy efficiently. It helps you identify if wastage is high, and some benchmarking tools may provide advice on how to improve energy performance. 

Building energy benchmarking can be done internal to an organization or with an external focus. Internal benchmarking is an assessment done in multiple buildings within one company or organization. Meanwhile, external benchmarking compares your building’s energy performance to other similar buildings. Internal benchmarking aims to identify which buildings you need to focus on to improve energy efficiency. External benchmarking helps you understand if you should be making investments in energy efficiency to remain competitive with your competitors while also showing the potential for improvement.

Benefits:

  • Annual energy saving of around 2.4%, based on ENERGY STAR’s benchmarking program.
  • It helps you determine and replicate energy-saving best practices carried out in energy-efficient buildings.
  • State and local governments can help identify facilities that need improvement in their energy management systems. It also allows officials and stakeholders to improve their metrics and standard performances, such as building energy codes.
  • By disclosing their energy usage, high-efficiency buildings receive rewards and recognition. ENERGY STAR-certified buildings have increased their valuation by 31%. In addition, building owners can charge premium rentals and still have high occupancy rates.
  • Energy-efficient buildings contribute to sustainability efforts by reducing greenhouse gas emissions and decreasing pollution.

Challenges:

  • Collecting data from different utility companies or meters can be tedious and time-consuming.
  • Depending on what the building is used for, it may be hard to find a benchmarking tool to use.
  • The data presented is mainly numerical and does not consider the direct and indirect factors that contribute to the success of energy-efficient buildings. A higher budget for new technology, the company’s sustainable core principles, and so on are examples of these factors.

2. Use of Energy-Efficient Equipment and Machinery

Industrial and manufacturing plants consume around 50% of their energy use on heavy machinery and equipment. Petroleum refining and the manufacturing of bulk chemicals, paper, and metals are considered the most energy-intensive industries. 

By using advanced technology, it’s possible to reduce the consumption of energy-intensive processes. Some examples of energy-efficient equipment and machinery use and their potential benefits and challenges:

Challenges:

  • High cost of energy-efficient machinery and equipment.
  • It may require changes to the entire processing system.
  • New solutions may be needed to retrofit existing machines with energy-efficient components.
Infographic of the examples of energy efficient equipment and machinery

3. Use of Energy-Efficient Lighting and HVAC

Lighting, heating, and cooling systems consume most of a building’s energy. In US commercial buildings, lighting uses 17% of the total electricity used. Switching to energy-efficient options like LED lighting helps you save on utility costs by lowering energy use. Furthermore, industrial facilities like factories require a safe and cost-effective lighting system that operates. Hence, industrial facilities can benefit from industrial-grade LED lighting systems. 

Energy-efficient heating, ventilation, and cooling (HVAC) systems also offer energy savings in buildings, offices, and manufacturing plants. Selecting a cost-effective HVAC system in commercial and industrial buildings can increase productivity, promote a safer workplace, and reduce pollution. Here are some of the benefits and challenges of using energy-efficient lighting and HVAC systems:

Benefits 

  • LED lighting can reduce lighting energy use in industrial buildings by 40% to 80%.
  • Commercial LED lighting fixtures last much longer than traditional light sources.
  • LED lighting also has a lower impact on the environment and ecosystems. 
  • Commonly HVAC energy usage can be reduce by 30% through energy efficiency measures.
  • Tax credits, incentives, and rebates are available when using ENERGY STAR-certified LED lights and HVAC systems.

Challenges

  • Initial up front investment required.
  • Equipment upgrades may be disruptive to normal operations
  • Few businesses look at total cost of ownership over the lifetime of equipment, and are more inclined to buy the cheapest product, not necessarily understanding how higher operating costs decrease profitability.

4. Use of Renewable Sources of Energy

It is expected that the commercial and industrial sectors will increase their energy demand in the coming years. Hence, there’s an urgency for commercial and industrial facilities to take advantage of renewable energy to reduce costs and contribute to sustainability efforts. 

Data from the EIA shows a growing interest in renewable energy. In the USA, renewable energy production accounted for a record high 11.7% of total energy production. The increase was mainly driven by solar and wind energy. In 2021 in the state of South Australia, wind and solar energy sources accounted for 65.7% of total energy consumed.

The United Nations Development Organization (UNIDO) has set a goal that by 2050, up to 21% of the energy used in manufacturing should come from renewable sources. Here are the potential benefits and challenges of switching to renewable energy:

Benefits:

  • Solar cells can produce electricity with zero contribution to noise and air pollution. They also requires little maintenance. 
  • Commercial solar modules are gradually improving in efficiency, meaning a panel of the same size produces more power.
  • Reduces energy costs.

Challenges:

  • High up front capital costs.
  • Site constraints, such as shading, can limit the potential benefits of solar PV.
  • Wind farms need more space and area, while solar cells are dependent on weather conditions and location.
  • In areas with high renewable energy penetration, significant investment in energy storage and transmission networks is required to make effective use of the energy produced.

5. Following Energy-Saving Best Practices

Benefits:

  • Energy-efficiency measures become a concerted effort within the organization.
  • Opportunity to increase awareness of sustainability and energy efficiency.
  • It may facilitate employee engagement.
  • It may encourage teamwork and can produce better results. 

Challenges:

  • Consistency in implementing best practices can be hard to maintain. 
Infographic of easy energy savings practices

Energy Savings and Industrial Competitiveness Act

The Energy Savings and Industrial Competitiveness Act of 2013 is a US bill that aims to promote energy efficiency in residential, commercial, federal, and industrial buildings. The goal is to promote energy-efficient technologies to pave the way for a more sustainable industrial sector.

The bill aims to reduce energy waste, provide jobs, and reduce carbon emissions. According to the American Council for Energy-Efficient Economy (ACEEE), the potential impacts of the provision by 2050 are:

  • It could lead to savings of around $50 billion.
  • It can reduce carbon emissions by about 1.3 billion tons.
  • It has the potential to cut down energy waste by 32 quadrillion btu.
  • It could create more than 100,000 jobs.

Some of the crucial provisions of the act that are beneficial to industrial and commercial buildings are: 

Building Energy Codes

Building energy codes are considered to have large long-time benefits when it comes to commercial energy efficiency. The act directs the Department of Energy (DOE) to develop building energy codes focused on various energy-saving measures, technology, and design. The targets will be based on the highest potential energy savings from high efficiency appliances, fixtures, and equipment. The energy codes should also be cost-effective and not compromise the quality and performance of buildings. The adoption of building energy codes will remain voluntary and will be at the discretion of state and local governments.

The DOE will provide technical and financial support in developing a “stretch code.” It’s defined as another level of energy efficiency that commercial and residential buildings can use instead of a building energy code. The stretch code provides a higher level of standards and is expected to achieve more significant energy savings than the building energy code.

Strengthen DOE Industrial Assessment Centers (IACs)

The Energy Savings and Industrial Competitiveness Act also directs the DOE to expand its Building Training and Assessment Centers as venues to create technologies and enhance opportunities for energy saving. These centers will assist institutions, and train officials, professionals, and managers in improving the energy management systems of facilities. It will also allow training of students on how to perform successful energy audits at small and medium-sized manufacturing facilities.

Promotes Industrial Efficiency and Competitiveness

Under this section are more measures that promote sustainable manufacturing standards and goals. Among the crucial points are: 

  • The DOE will be available, upon the request of manufacturing owners, to conduct on-site assessments on their energy management system.
  • Establish a Supply STAR program to certify and recognize energy-efficient products, practices, methods, and technologies.
  • Provide competitive tax credits and incentives such as the Energy Saving Motor Control Rebate Program and the Energy Efficiency Transformer Rebate Program.
  • The DOE will provide funding to encourage states to promote energy efficiency measures for retrofitting existing large facilities, typically used for commercial, multi-family, and other mixed-use purposes.
Infographic of how much Energy Savings in Buildings with an energy audit

Are Energy Audits Worth It

With all these energy-saving benefits, you might be asking, “Are energy audits worth it?” Energy audits are crucial to the energy management systems of industrial and commercial facilities. They provide a comprehensive assessment of your building and facilities’ energy use. They can help determine which areas or parts produce the most energy waste and help you identify suitable energy-saving measures. 

When well done, energy audits provide a tailored business case for using less energy, which will lower energy bills and reduce greenhouse gas emissions without compromising the quality or performance of your building. In addition, energy audits may also identify potentially dangerous deficiencies in a building’s ventilation, wiring, and electrical systems. For example, buildings and facilities may also be prone to ventilation problems, may foster the growth of the dangerous legionella bacteria, and may have sub-standard electrical switch boards. Regular energy audits can significantly improve your industrial and commercial facilities’ overall energy management. 

How to Undertake Investment-Grade Energy Audits

If you’re now convinced that energy audits are worth it, you must also ask, “How to undertake industrial-grade energy audits?” 

To help you undertake industrial-grade energy audits, you need expert in-house staff and professionals or external consultants to drive your building’s energy efficiency program. Even if you have enough data, your energy audits may not be useful if you don’t have credible and knowledgeable staff or consultants. It’s best to seek an expert energy advisor or auditor to maximize the benefits of an energy audit. If you have in-house engineers, having them attend training courses can help ensure successful energy audits. 

Building overlaid with text: energy saved is energy generated

The Sustainability Education Academy offers a comprehensive course on the process of energy audits specific to commercial and industrial facilities. It will guide your advisors on the principles of a successful energy audit. In addition, the course also presents a process that helps deliver an Investment Grade Audit (IGA) or Detailed Feasibility Study (DFS). Professionals who have earned a certification demonstrate can only do so by demonstrating competence and expertise in energy auditing. This course will help ensure that your energy audits are successful and serve their purpose.

Through the years, energy efficiency has quietly but effectively saved trillions of dollars, and whilst it hasn’t saved the planet, it has helped avoid a great deal of environmental harm. It proves that profit and sustainability can go hand in hand. Energy-efficiency helps building owners and operators both achieve their business goals, and contribute to a more sustainable environment.

Let’s remember that every building impacts our future. The greener we make our buildings, the more we help ensure a better and more sustainable world for everyone. 

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