October 2009- Paying the power bill is a necessary annoyance of day-to-day life, but imagine if that power bill was $3 million.
For some metal foundries, annual power costs can be that dizzying, making energy consumption a perpetual concern. Energy-reduction strategies are useful for any business looking to cut costs, but many times, these strategies are poorly thought out or hastily implemented, resulting in negligible savings.
EnerNOC, Boston, an energy-management firm, which serves commercial, industrial and institutional clients, seeks to maximize a company's energy-saving potential through demand response. Demand response is a voluntary reduction of energy during periods of peak energy demand. For their cooperation and compliance, participating companies receive monetary compensation, which is determined by the utilities in the region that set incentive prices. Compensation is given quarterly, as well as after each demand response event, based on the amount of energy returned to the grid. So not only is money being saved, money is also being made.
"Demand response isn't necessarily a new concept," says Sarah McAuley, senior communications manager for EnerNOC. "For example, interruptible rates are a blunt-force form of demand response--whereby for a discounted year-round rate, large energy users agreed to shut down completely at requested times."
As McAuley explains, the drawbacks of interruptible rates are that only a select few of the largest energy users are eligible; there's resistance from companies when it comes to actually shutting down; and because utilities can't negotiate with individual customers, the strategy is often used as tool to attract business with little expectation it would actually ever be implemented.
"Whereas interruptible rates were a form of demand response with a machete, Internet-enabled demand response, like the kind EnerNOC does, is like a laser," says McAuley. "Instead of shutting down completely, businesses can reduce smaller amounts of nonessential electricity. As a portfolio, the aggregated reductions have the same effect. The Internet enables a high level of automation and remote dispatch, so it's far more scalable and verifiable than interruptible rates."
For foundries, the benefits of demand response extend beyond the monetary compensation. It also helps them decrease environmental footprints by reducing the need to burn fossil fuels during peak times, it keeps energy rates low by eliminating the need for companies to make spot purchases on wholesale electricity markets, and it fosters customer and employee satisfaction.
Foundries such as Bridesburg Foundry, Whitehall, Pa., and AB&I Foundry, Oakland, Calif., have implemented EnerNOC's demand response strategy by creating backup generation to maintain business when called upon to reduce power-consumption levels.
Of course, a top concern of any company implementing a new power strategy is its potential effect on production.
"With EnerNOC demand response, a foundry's work continues ahead uninterrupted," says McAuley. "The foundry is able to make changes in ways that are almost invisible to its team members. Demand response doesn't affect daily operations, since many of the changes take place behind the scenes. The iron in a foundry's furnaces may be a little cooler at times, but overall, it has little impact on production and zero impact on the quality of the metal. By participating in EnerNOC's demand response program, a foundry is able to monitor its ongoing energy use more carefully and discover opportunities to reduce energy that it may not have noticed before. For example, a foundry can run compressors less often, which reduces energy use without affecting operations."
Ultimately, the biggest incentive to implement demand response is the positive effectsÑboth expected and unexpectedÑit can have on a company's bottom line.
"Metal foundries, like all businesses, fight to protect margins," says McAuley. "Energy efficiency equals operational efficiency. Doing demand response is a straight-up good business decision." MM