When Scaling Back Production, Energy Cost Per Unit Spirals Upward Without Careful Planning

Without reducing fixed energy cost, a company that scales back manufacturing and other operations will actually see increased energy costs as a percentage of total expenditures.

A column in IndustryWeek tells the tale of a production facility that last fall reduced output by 65 percent yet saw only a 10 percent decrease in energy usage. The end result was a 257% increase in energy per unit of production, the column stated. For that particular company, the analysis, performed in October, showed that 69 percent of energy used came while the plant was idle.

The column states that factories generally waste energy in:

• Building ventilation
• Compressed air
• Space heating and cooling
• Lighting

Companies that reduce fixed energy costs as much as possible will be able to weather the economic downturn the best, the column noted.

Coca-Cola, Boeing and General Mills are among companies saying that green and sustainable measures are a must during the economic downturn. Yet other companies say the recession is delaying sustainability initiatives, many of which include plans to reduce energy usage.