Monday, January 21, 2013

HAVE YOU ESTABLISHED YOUR SITE'S RESOURCE EFFICIENCY BASELINE?

A Resource Efficiency Baseline is a 
point of departure for your efforts to 
save energy, water and materials.

Resource efficiency is an important aspect of industrial sustainability, not least because it is an area which delivers direct financial benefits by reducing the variable costs of production. The resources referred to here are energy, materials and water, all of which are undergoing significant price increases in most parts of the world. In my country, South Africa, electricity prices as at January 2013 have roughly tripled in the last 5 years, and are set to increase at rates above inflation for the foreseeable future. Rising energy prices increase extraction and transport costs, and spill over into the cost of materials. Water scarcity is a widespread global issue. Economics aside, the life cycle benefits of resource efficiency in terms of reducing emissions, improving water security and reducing the impacts of depletion are significant. No industrial organisation should therefore be without strategies and programmes to continuously improve the efficiency with which resources are used.


Site-specific resource efficiency is not the only aspect of resource management on the industrial sustainability agenda. Through the use of approaches such as life cycle analysis and the analysis of value chains, organisations can identify hot spots in their supply chains where environmental impacts are most severe, and target these to limit the extent of their footprints.  The results of such an exercise can be very surprising – for example, SABMiller’s South African operations found that water use in the agricultural part of their value chain far exceeded that at their breweries (see the report). Life cycle analysis should also prompt companies to find alternative materials, and in some cases fundamentally change their products and processes. The lead times for making such marked changes are however fairly long, unlike typical time-frames for site-specific resource efficiency projects. They should nevertheless be pursued in parallel with site-specific resource efficiency projects, given that the scale of the benefits is potentially very large.

In tackling site-specific resource efficiency, an important first step is to establish the RESOURCE EFFICIENCY BASELINE for your site. Establishing a baseline is primarily a quantitative process, involving an assessment of the quantities of each resource that are consumed on the site, with the data disaggregated as far as possible. These quantities should be expressed in absolute terms (e.g. total kWh of energy used per annum) and then also on the basis of activity (e.g. kWh/ton of production for a given time horizon). Since individual products can also use very different amounts of resources for their production, you may want to factor product mix into your baseline assessment. This is in my view an extremely important consideration, albeit one that is not necessarily simple to incorporate, particularly where sub-metering is not in place. A workable approach is perhaps to use a reasonable allocation procedure based on sensible calculations, and ensure that the individual usages tally to the total usage. 

To understand what I mean by "disaggregated data", consider energy as a simple example. Most industrial sites I visit use at least 3 different energy carriers, sometimes more. In addition to knowing the total energy consumption, one would also want to know how much of the total energy consumption was in the form of electrical energy, how much was due to the consumption of boiler fuel (and here you would want to disaggregate the data further into individual fuel types) and so on. Within each energy carrier, you would also want to understand how much energy was used by individual process areas, and possibly by individual types of energy-consuming equipment. Hence for electrical energy, it is useful to have a sense of how much energy is consumed by induction motors, how much by heating, how much by lighting etc. and to do this by area as far as possible. To do so may require some measurement (always the best option), or where this is not possible, some intelligent estimates. 

You may also want to delve deeper into specific areas, adding some qualitative data into the baselining exercise. For example you may choose to quantify the total number of induction motors on site, their capacities and other details such as the nature of their drive systems. Some of this information may already reside in your computerised maintenance management system (CMMS) should you have one, though often the information captured for preventive maintenance purposes may be short of details applicable to resource efficiency. This aspect of the baseline is not so much a case of using the data to establish trends as it is a case of building up a profile/technological footprint for the site, and providing context. Think of this profile as a living record that can be updated over time as circumstances change and more detailed information is gathered.  It really is up to you in terms of how detailed your analysis is, and as a rule, the more information you can gather, the better. Over time, you will begin to establish linkages between performance and the nature of the assets employed, facilitating problem solving.

The more meaningful you can make the baseline in terms of the richness of the data, the more focused you can be in choosing areas for the subsequent processes of opportunity identification and development. Consider that resource efficiency opportunities can involve technology, work practices, process optimisation, operating procedures and other factors. This should be reflected in the type of data you gather in constructing your baseline. The process is also instructive in terms of determining the nature of the routine reporting that should be taking place as regards resource efficiency. 

Many organisations propose and report on specific goals in terms of energy efficiency, emissions, water use and other indicators of resource efficiency in their sustainability reports. Their intentions are no doubt noble, but without a well-constructed baseline, formulating such goals, actively pursuing them and monitoring progress against them is virtually impossible.