Amid a domestic industrial environment in which energy prices continue to increase above inflation and electricity spend constitutes up to 40% of a mining or heavy industrial company’s overall costs, energy system design firm Ensight Energy Solutions chairperson and former Australian Parliamentarian Rod Welford has asserted that it is possible for industry to uncouple energy costs and productivity.
“Are gross energy costs and production volumes linear? Not necessarily. Industry needs regular and frequent education to make it clear that electricity costs can be uncoupled from rising prices, without impacting on production volumes.
“The challenge is to assist industry to become more energy efficient, [but] it is not just about saving energy, but focusing on energy costs per unit of production.
Energy productivity, which is the [energy] cost per unit of value created, should be the new metric,” he told delegates at the 2015 Southern African Energy Efficiency Convention, on Wednesday.
Noting that domestic electricity prices would continue on an upward trajectory in the coming years, Welford argued that local firms could escape the local “profit strangle” by implementing energy cost-savings projects, such as Ensight’s flagship Energy Leadership Programme (ELP), which transformed the way in which companies used, measured and monitored energy.
Mining firms such as Palabora Mining Company, Richards Bay Minerals and Anglo American Platinum were currently implementing such long-term programmes, which, Welford asserted, had resulted in cost savings of some R140-million for Palabora Mining.
This was done through the delivery of innovative process improvements and the unlocking of production bottlenecks, he added.
The first phase of Ensight’s ELP entailed a desktop review to identify the potential “prize” – the scale of possible savings that a full ELP could deliver.
“It focuses on the key question: Is there an [energy reduction] opportunity worth senior management’s attention?,” Welford noted.
This was followed by a diagnostic review, which took the findings of the desktop review and filtered the list of conceptual energy-saving opportunities with the aim of specifically defining the scope of work to be undertaken in the core execution phase of the ELP.
The ELP itself would then be designed and implemented, focusing on a programme of projects implemented across the site.
“Project execution is supported by a close working partnership between Ensight design engineers and client staff. The programme is underpinned by high-quality financial analysis to reveal previously unaccounted for energy system losses and waste; leading to the redesign of energy systems to deliver energy services essential to cost-efficient business operation,” he concluded.