Industrial Energy Efficiency: A Short Paper#

Arvind Gupta, PhD student,

Center for Sustainable Technologies, IISc Bangalore

Introduction
Industrial energy efficiency can be understood as the amount of energy used to produce
one unit of a commodity. This is determined by the factors like type of processes used
in the production of commodity, the performance of the equipment used, and the
efficiency of production, including operating conditions. Energy intensity varies between
products, industrial facilities, and countries depending upon these factors.
In recent decades, the development of any country has been identified to be coupled
with inherent implications on our environment. And, unequivocally, the overall
development cannot be imagined without strides in industrial sector. Industrial sector
amounts to rise in the energy consumption. As per the statistics, industries are the
largest consumer of the energy, all over the world. Industries account for more than one
third of global primary energy consumption and industrial sector has been estimated to
grow annually at the rate between 1.8 per cent and 3.1 per cent for coming 25 years [1].
Being the largest consumer of the energy its emission contribution is huge as the larger
fraction of energy comes from fossil fuel based power plants. Manufacturing industries
are highly energy intensive, they almost contribute to one third of global energy demand
and carbon dioxide emission. The data says, manufacturing sector accounts for 75% of
global coal consumption, 44% of global natural gas consumption and 20% of the global
oil consumption [2]. Figure 1 show the share of different sectors in energy consumption.

Fig.1. Sector wise global energy consumption pattern [3]

In the race of economic development the environment is often neglected. The market
competition and economic development goals can be equally blamed for the
negligence. There must be a balance between the development and the environment,
and this makes it crucial to focus on and study the way the energy is consumed in the
industries. Study shows that this sector has the potential to decrease its energy intensity
and emissions by up to 26 per cent and 32 per cent providing a striking 8 per cent and
12.4 per cent reduction in total global energy use and CO2 emissions (IEA). The
development cannot be compromised and hence the energy must be consumed in the
most efficient way. This builds the basis for the industrial energy efficiency. The
industrial energy efficiency also narrows down the huge gap between the rising energy
demand and the constrained energy supply in developing countries.
In brief, industrial energy efficiency is the most important way to achieve the three goals
of energy policy:
i. security of supply,
ii. Environmental protection,
iii. and economic growth.
In industries, the energy loss can be mainly attributed to equipment inefficiencies, and
mechanical and thermal limitations. With optimization of energy usage and equipments
tonnes of CO2 emission can be prevented. This can be achieved by employing latest
technology, efficient equipments and regular energy audits. Energy management in
industry must be encouraged to achieve the goals of energy security, environment
protection and growth.

A brief sectorial review [4]

Chemical and petrochemical
The chemical and petrochemical industry accounts for 30% of global industrial
energy use and 16% of direct CO2 emissions.
In final energy terms, the savings potential ranges from 5 to 11 EJ per year,
including process energy efficiency, electric systems, recycling, energy recovery
from waste and CHP.
Iron and Steel
The iron and steel industry accounts for about 19% of final energy use and about
a quarter of direct CO2 emissions from the industry sector. The CO2 relevance is
high due to a large share of coal in the energy mix.
The iron and steel industry has achieved significant efficiency improvements in
the past twenty-five years. Increased recycling and higher efficiency of energy
and materials use have played an important role in this positive development.

The identified primary energy savings potential is about 2.3 to 2.9 EJ per year
through energy efficiency improvements
This sector has the potential of CO2 emissions reductions in the range 220 to
360 Mt CO2 per year.

Cement
The non-metallic mineral sub-sector accounts for about 9% of global industrial
energy use, of which 70 to 80% is used in cement production.
The efficiency of cement production is relatively low.
In primary energy terms, the savings potential ranges from 2.5 to 3 EJ per year,
which equals 28 to 33% of total energy use in this industry sector.
Cement production is an important source of CO2 emissions, accounting for 1.8
Gt CO2 in 2005.
Pulp, Paper and Printing
The pulp, paper and printing industry accounts for about 5.7% of global industrial
final energy use.
CO2 reduction potentials in the pulp and paper industry are limited due to the
high use of biomass. However, the more efficient use of biomass still makes
sense from an energy systems perspective, as it frees up scarce wood resources
which could provide savings elsewhere.
In primary energy terms, the savings potential ranges from 1.3 to 1.5 EJ per year,
which equals 15 to 18% of total energy use in this sub-sector.
Aluminium
Aluminium production is electricity intensive. Global average electricity use for
primary Aluminium production is 15 300 kWh per tonne (kWh/t).
With existing technology, energy use in the key steps of Aluminium production
can be reduced by 6 to 8% compared with current best practice, which equals
0.3 to 0.4 EJ per year in primary energy equivalents.
Industrial energy efficiency and sustainability
Industrial energy efficiency can contribute hugely to the sustainable growth of the nation
and hence, of the globe. Investing in energy efficient technologies, systems and
processes can help us achieve environmental, economic and social sustainability and
thus to achieve green growth.
1. Economic sustainability: The cost saved by using efficient techniques and
machines the energy input and cost can be saved, but this is not a
straightforward concept. The cost incurred to such machines and technology can
be staggeringly huge. In efforts to save the environment and save energy the
economics can never be ignored. The industry must make profits. The

investments made in this respect should justify the costs involved by generating
enough profits. From improved energy efficiency the cost savings can be
substantial but variations in energy prices and subsidies across countries and
industries affect potential cost savings. The profitability of energy efficiency
projects in developed countries is well established. The reports demonstrate that
huge potential is there in developing countries as well. Findings suggest that any
energy-efficiency projects perform significantly better than the most lucrative
financial investments. Of 119 industrial energy-efficiency projects that UNIDO
assessed in developing countries, the average internal rate of return was slightly
more than 40 percent for those with an expected lifetime of five years. The
profitability was found to be highly sensitive to the time horizon of investments
[5]. The projects with smaller investments have high profitability in comparison to
the projects that need heavy investments involving replacements of equipments
and technology.

Fig. 2 Internal rate of return with expected lifetime of 5 years [5]

2. Social sustainability: Inefficiencies in energy usage in industries can cause in
higher operating costs. The inefficiencies can also cause energy wastage and
material wastage. Improvements in energy efficiencies in such industries can
have huge social implications. The saved material and energy though
employment of most efficient techniques and machines can be directed toward
the poorer segment of the society. This saved energy can elevate the living
conditions of the excluded sections of population and developing and
underdeveloped nations can achieve a higher human development indices.

This can be best possible way of utilizing resources. Energy efficiency

improvements can help save resources to setup a new machines and thus
expanding the business which can boost the production and generate fresh
employments. This growth improve the wages to workers also. The efficient use
of energy helps in reducing the emission thus the health of the workers can be
better. The health condition of the population in the vicinity will be better.
3. Environmental sustainability: Industrial sector has direct and significant impact
on the environment. The effluents from industries pollute the land water and air.
The CO2 emission causes the greenhouse effect and increases the average
temperature of the planet. The emissions also cause the acid rain. The
particulate matters and other harmful gases disturb the ecology and pollute the
natural resources and are the source of various human health complications. The
efficiency improvements in usage of energy can help reduce the energy input to
the industry significantly. Since, the energy requirement is largely fulfilled by
burning fossil fuels, the detrimental effects on the environment can be greatly
abated. Cogeneration, energy recovery, water recycling etc. can help achieve
these goals. The industrial energy efficiency can help save the environment is
justified broadly by the two reasons:
A. Industry accounts for about 25 percent of greenhouse gas emissions from all
sources globally, and
B. Industry is a major user of natural resources and could contribute
substantially to mitigating resource depletion.

Challenges in industrial energy efficiency improvements [6]

(a) First and foremost barrier is the ignorance. Many industrialists believe that they
are energy efficient even when the profitable improvement options are available.
Lack of knowledge and lack of research and evaluation opportunities among the
producers add to it.
(b) Secondly, uncertainties in energy prices poses constraints in investments.
(c) Perceived risks among the producers in adopting new technology is also a
deterrent.
(d) Optimization of industrial system for energy efficiency is not taught to engineers
at the university which would help them gain awareness.
(e) Lack of incentives and subsidies to encourage energy efficient technologies is
also one of the barriers.

Target setting agreements

These are the agreements used by number of governments as a mechanism to promote
energy efficiency within the industrial sector. A survey published in 2005 identified 23

such programs in 18 countries [6]. Such programs include activities from benchmarking,
energy audits, training workshops etc. Key programme elements can be listed as:
Target setting;
Identifying energy saving technologies and measures;
Benchmarking current energy efficiency practices;
Establishing an energy management plan;
Energy efficiency audits;
Developing an energy saving action plan;
Developing incentives and supporting policies;
Monitoring progress toward targets;
Programme evaluation.

Conclusion
Industrial energy efficiency projects can prove to be a boon in various fronts by helping
reduce emissions, saving extra costs and can improve the human development index. It
must be encouraged by the policymakers and governments by introducing incentives
and subsidies. The stakeholders must be educated of the importance of sustainable
growth. The engineering education should be made embedded with the courses on
energy efficiency in industries and optimization. As the energy consumption in the
sector is huge, the changes that can be brought by implementing industrial energy
efficiency is enormous.

References
1. http://www.unido.org/en/what-we-do/environment/energy-access-for-productiveuses/industrial-energy-efficiency.html
2. http://www.diva-portal.org/smash/get/diva2:328/FULLTEXT02
3. http://www.iea.org/media/training/presentations/Day_4_Session_1a_Energy_Effi
ciency_Industry.pdf
4. https://www.iea.org/publications/freepublications/publication/tracking_emissions.
pdf
5. http://www.unido.org/fileadmin/user_media/Publications/IDR/2011/UNIDO_FULL
_REPORT_EBOOK.pdf
6. https://www.unido.org/fileadmin/media/documents/pdf/Energy_Environment/ind_
energy_efficiencyEbookv2.pdf

#submitted as a take-home exercise