Significant untapped potential for electricity savings is available to the manufacturing industry across the globe, reveals new research from Siemens Financial Services (SFS). The study estimates the industrial electricity-efficiency potential, which is defined as the proportion of current electricity consumption that could be saved if more electricity-efficient equipment were installed. Amongst the examined geographies, the figures for potential energy savings range from circa 14% to levels approaching 20%. In the UK, the industrial electricity-efficiency potential is about 14.2%. Together with Spain (14.2%), it ranks among the leading countries in industrial electricity-efficiency, followed by Germany (14.5%) and France (15.1%). The electricity-efficiency potential is greater still in developing economies such as China (17.2%) and Russia (19.1%).

Although the figures attest to a high level of electricity efficiency in UK manufacturing, further potential to reduce electricity consumption remains, particularly in production processes where production control systems and variable speed motors can radically cut electricity usage. Spain’s leading ranking can be partly attributed to Spanish manufacturers being particularly active in generating solar power onsite to subsidise their electricity requirements. In Russia, the established industrial sector is often characterised by less energy-efficient, older equipment. There are therefore ample opportunities for electricity- efficiency gains from plant upgrades and replacement.    

As electricity makes up a growing proportion of industrial energy use, the issue of optimising electricity consumption is becoming an increasing challenge for the manufacturing sector. Electricity usage in manufacturing has risen three times faster than overall energy use over the last 40 years. It now represents over a quarter of industrial energy consumption. At the same time, the unit cost of that electricity has increased significantly over the last decade. Reducing electricity consumption is therefore vital to the economic health of manufacturing.   

Across the globe manufacturers are increasingly keen to focus on installing more electricity-efficient equipment to reduce the consumption and cost of electricity. These can range from optimised motor-driven and automation systems to the recovery of heat from production processes for electricity generation.

“Investing in electricity-efficiency technologies not only helps cut energy bills, manufacturing costs and carbon emissions,” commented Brian Foster, Head of Industry Finance, Siemens Financial Services. “New equipment often brings productivity and capacity improvements as an added bonus, improving business performance and competitiveness.”

As financial sustainability is becoming an increasingly important consideration for technology investments, asset financing techniques are establishing themselves as cost-effective, affordable methods of funding energy-efficient equipment investments and upgrades. Designed to offset the monthly cost of the new equipment against the energy savings that the equipment delivers, this form of ‘pay-as-you-save’ financing will prove fundamental to the expansion and development of the energy-efficiency market in global manufacturing.