Managing Electricity Costs Manufacturing

7/30/2019 Managing Electricity Costs Manufacturing

1/11

The Bottom Line on

Managing Your Electricity Costs:

A Guide or

Maact


2/11

A Guide or Manuactu

1Know How

You Are Billed

page 4

There is a wealth o expertise available to advise on the best approaches or your company. There also incentive programs to help shorten payback or investments in energy eciency. Natural ResCanada (NRCan), your local distribution companor the Independent Electricity System Operator (can be your rst stop or more inormation aboutincentive programs.

Do a top-to-bottom analysis o how your operationelectricity, understanding how much energy is usmachinery and acilities. This will help you pinpowhere to start with energy eciency initiatives.

Go or some easy, early wins to help build momenMaintaining and operating equipment properly wenergy eciencies, as will eliminating waste by t

o equipment when not in use, or turning down ttures to match actual operational needs.

There are a myriad o energy-saving technologiesavailable. The challenge is to nd the technologiwill deliver the most benets or the investment will work or your organization. Do research; talk who have used new technologies; understand payperiods; and examine careully how technology uwill contribute to your bottom line.

As a business that pays the wholesale price orelectricity, your costs are based on: how much youse; the most electricity you draw at any one timewhether or not you have an interval meter. There also a number o dierent types o charges on yobill beyond the pure commodity cost. By understthese basic components o your bill, you open theto energy savings.

2TAKe ConTrol o

Your energY use

page 8

3ind THe rigHT

TeCHnologY

page 12

4use inCenTives To

Your AdvAnTAge

page 13

A CAll To ACTionHourly Electricity Prices

A Competitive Advantage

In an intensely competitive global economy, with a

strong dollar and rising uel prices, more and more

manuacturers are learning that there are some

costs that they can control. Variable hourly electric-

ity costs have been in eect or large volume users

in Ontario since 2002 oering manuacturers an

opportunity to leverage their electricity consumption

to improve their competitive edge.

In Ontarios wholesale electricity market, operated

by the Independent Electricity System Operator

(IESO), the price o electricity is determined by the

orces o supply and demand. (For more inorma-

tion, see page 16.) For manuacturers, this concept

drives their businesses day in and day out. By

understanding how electricity consumption impacts

your business, you can use it to your advantage and

bring operational costs down.

Think o your electricity service much like any other

supplier. You choose suppliers based on price,service, quality and product availability. Electricity

supply also comes with a whole suite o options it

all depends on how fexible you are in the way you

use it.

Hourly prices fuctuate, but tend to ollow

predictable patterns. By understanding when

prices are likely to be at their highest and

lowest you can start to look at your energy use

rom a new perspective, and you may nd some

unexpected savings.

Leading the Way

Taking charge o your electricity use will also deliver

other benets. Businesses have a unique opportunity

to set an example or all Ontarians o the value

o being environmentally responsible and reducing

their environmental ootprint. For the electricity

system operator, this is good news.

Any actions that are taken will help lower the overall

demand o the province. In addition, they will

provide or more ecient use o Ontarios electricity

assets and help maintain a reliable system.

This brochure will provide you with the basics o

electricity pricing, billing and eciency programs

and help you take those rst steps toward turning

your electricity use into a competitive advantage.

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3/11

Managing Your Electricity Costs A Guide or Manuactu

In Brenda MacDonalds opinion, energy eciency

isnt rocket science, but it can still have

measurable results.

According to MacDonald, President and CEO

o Coyle and Greer Awards Canada Ltd., energy

eciency improvements can be made almost

anywhere. You just have to start thinking about

your products and your processes to see where

you can nd savings, she said. I youre a small

company, theres no need to use your hard-earned

dollars to hire a consultant to do a ull-out energy

audit. Enlist the help o your own sta to come

up with ideas.

MacDonald and her sta work in a 27,000

square oot school thats been converted into a

actory that produces recognition awards like

lapel pins, cast products such as medallions and

keyobs in base metal, pewter and zinc as well as

10 and 1 4 karat corporate jewellery. Located onthe outskirts o a small town between London

and Woodstock, the acility is bright and

spacious. Its rooms are fooded by natural light

thanks to the many w indows installed in this

1963-vintage school.

In the last year alone, MacDonald has been able

to shave eight per cent o her electricity costs

by making some simple changes around the

plant. Though her annual costs are quite low by

manuacturing standards total electricity costs

hover near $46,000 they still represent a

signicant cost and the money saved on

electricity can be reinvested in other areas.

One o the most important changes was the

replacement o an outdated, inecient air

compressor, which runs the hot stamping

machines. The existing 20-tonne compressor was

replaced with a high-eciency ve-tonne

compressor which meets the needs o this small

manuacturer much more eectively.

Similarly, MacDonald recognized the pl

burn-out oven, used to make castings, w

operating at ull capacity. As a result, sh

able to replace the larger oven with one

appropriately sized, which uses two-thir

energy than the larger oven.

Its not complicated stu, MacDonald

the energy eciency improvements she

to date, and its not expensive.

Over the years, she has invested in caul

insulation, window lm, programmable th

and motion sensors. While these are not

capital expenditures, they all play an im

role in helping MacDonald keep her cos

and her prot up.

Two summers ago, during the record-bre

heat and humidity o 200 5, the acility

conditioning system ailed. Thats when

MacDonald introduced a new rule aroun

lighting: to prevent heat gain, all the lig

acility were turned o until the AC was

Because o the many windows in the bu

enough natural light ltered in to allow

employees to carry on working without

interruption. To this day, overhead lights

rarely turned on in the summertime.

MacDonald is an active member o the E

Committee o CIPEC, the Canadian Ind

Program or Energy Conservation, a part

between the ederal government and ind

associations/companies representing so

per cent o all industrial energy use in C

Despite this role, MacDonalds interest

eciency is grounded in her own compa

operations. She is characteristically blu

assessment o the benets o good ener

management practices. You dont do t

un, she said. Its all about money.

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4/11


eduCing eleCTriCTY CosTsoosTs Your BoTToM line

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There are two main drivers that infuence

the nal price you pay consumptionand peak demand.

These two variables are used as multipli-

ers on the electricity bill which means

that you will need to manage both

consumption and peak demand in order

to bring costs down.

Cmpt: H Mch

ey Y u

The number o kilowatt hours on your bill

shows how much electricity was con-

sumed within each billing period. This is

your cmptor y charge.

Consumption is the b asis or commodity,

regulatory and debt retirement charges.

The regulatory charge covers the cost o

operating the power system reliably; and

the debt retirement charge is used to pay

down the ormer Ontario Hydro debt.

Pak dma: H at

Y Cm

dma is a measure o how ast energy

is consumed at any one time. The

highest level o demand during a billing

period is pak ma. LDCs use

demand as the multiplier or transmis-

sion and distribution charges. These

charges cover the cost o building and

maintaining the distribution and

transmission systems that deliver

electricity to your acilities.

consumption 24 hours a day, seven days a week,

or or specied periods o time, such as or 24/5(weekdays only) or 16/5 (two shits on weekdays)

and pay the hourly price during o-peak periods.

While xed-price contracts allow companies to

mitigate any potential price risks, they do so at a

premium. Beore signing a contract, be sure to

compare the prices being oered against the price

you are currently paying, and balance the value o

secure pricing against the extra costs you may

incur in a contract.

1Know HowYou Are Billed

Energy Demand Kilowatts (kW

or Kilovolt-ampere (kVA)

How ast you consume electricity also has

important infuence on electricity costs. Op

a lot o equip ment simultaneously, even o

period o time, may spike your peak dema

resulting in unnecessary charges. Running

ery in sequence will help keep demand cha

down even though you are consuming the s

amount o electricity.

The chart on the let shows how stacking u

electricity use at one particular point in tim

costly. While this companys overall deman

are low, they had an energy use spike that

their demand costs by 27 per cent.

By smoothing out demand levels, you will

reduce your distribution and transmission

As these systems must be built with enoug

capacity to meet the highest levels o dem

these charges are multiplied by your dema

not consumption.

A Word About Power Factors

I you have a low power actor (usually any

below 90 per cent), you are incurring losse

the power distribution system. LDCs will le

charge on its customers to account or the

Your electricity bill will indicate what your

power actor level is. Identiying ways to im

your power actor could open up another a

potential savings. (See Power Factor Corre

page 12.)

You cant make good decisions

without good data. Once you

have it, use the data to identify

a good roadmap to future

energy savings.

Ba C, Maa, Tchca

sc, Zchm

oer more detailed daily, weekly and monthly energy

proles in customized and password-protected

web pages.

More inormation about the hourly price is available

on page 9.

wht Aa Pc

Companies that use a conventional meter pay a

weighted average price based on the consumption

patterns o all the LDC customers who also dont

have interval meters. This means the price will be

weighted by a broader group o customers. I your

operations consume more electricity during the

lower-priced periods, it may mean that you are

paying more or electricity than you need to.

x Pc Ctact

Some manuacturers preer price stability and sign

a contract or xed rates with retailers or some or all

o their electricity consumption. There are a variety

o options available. You can contract or all your

nergy Consumption Kilowatt hours

e energy charge is based on how many kilowatts

e used each hour, kilowatt hours (kWh). I you pay

e hourly price, there are three dierent pricing

tions or the energy charge:

y ota ectcty Pc

mpanies pay the hourly price i they have an

a mt that electronically tracks their

ectricity use every 15 minutes. The hourly priceelectricity is determined in Ontarios wholesale

arket, managed by the IESO. This price fuctuates

cording to the availability o sup ply, the weather,

e time o day, week or year and the demand

it.

Cs download consumption inormation rom

ch customers interval meter and use it to

lculate that companys average hourly p rice.

is is the price that appears on th e bill as the

nergy or consumption charge. Most LDCs

DE

MAND(kW)

0

50

100

150

200

250

300

350

Increased Consumption Charge = $3.10*

Increased Demand Charge = $504**

*

**

Consumption charge includes regulatory and debt retirement charges.

Demand charge based on a charge of $6.00 per kilowatt.

WEEK 3 WEEK 4WEEK 2WEEK 1

smth ot dma Pak a sa

Consider the load prole o this company. By elimating the spike in

consumption, they could have saved over $500 on their electricity

bill or the month.


5/11


Unlike most people, Brian Cross doesnt mind

being called a control reak.

In his capacity as Manager o Technical Services

or Zochem, Canadas largest zinc oxide

manuacturer and distributor, Cross is overseeing

the installation o sophisticated control systems

and devices at the companys Brampton plant.

And according to Cross, these technological

enhancements are already resulting in signicant

process improvements, output increases and

energy savings. We started by analyzing our

processes and then investing in the best

technology available, he said. These can be

high-cost items, but they give excellent process

control capability.

Established in 1933, Zochem is a division o an

integrated copper and zinc company, Hudson Bay

Mining and Smelting Co. Limited, which began

mining and smelting operations in Flin Flon,Manitoba in 1927. Capable o producing a

number o oxide grades, Zochem supplies a broad

range o industry sectors. Its products are used to

manuacture everything rom rubber tires, brake

pads and industrial lubricants to animal eed,

crop ertilizers and surgical tape.

Like most manuacturers, Zochem is always on

the look-out or ways to improve the eciency,

and cost-eectiveness, o its operations. While

natural gas uels most o Zochems production

stages, nearly 70 per cent o its electricity

consumption stems rom the use o induction

ans and air compressors used to clean lter

cartridges. One major change implemented in

recent months is the replacement o ve large

ans with 23 smaller ones, which allow Crosss

team to ocus the air fow exactly where its

required. More targeted air delivery has already

translated into reductions in energy consumption.

Traditional polyester elt lters in the baghouse

have also been replaced with Gore-Tex. Rather

like a gloried vacuum, the baghouse is simply a

device that removes solid particles rom exhaust

gases as they fow through a large cloth bag. A

durable, breathable, easy-to-clean material that

resists degradation at high temperatures, Gore-Tex

has improved the overall eectiveness o the

ltration process, resulting in better eciency

and ewer emissions.

Control o all major production equipme

Zochem has also been shited to program

logic controllers (PLCs). These specializ

computers are typically used in the auto

industrial processes, and allow compone

turned on and o remotely. Its extrem

wasteul i you have machines running w

theyre not required, Cross said. PLCs

allowed us to reduce our electricity usag

as our equipment maintenance and repa

Cross is also installing variable requenc

(VFDs) on the acilitys induction ans a

compressors. VFDs are electronic contro

that adjust the speed o an electric moto

modulating the power being delivered. T

provide continuous control, matching m

speed to the specic demands o the wo

perormed and allow operators to ne-tu

processes while reducing costs or energ

equipment maintenance. Ater a two-yea

period, Cross expects to see annual elec

cost reductions in the range o $30,000

typical 100 horsepower (hp) compresso

substantial savings or a company with a

electricity costs in excess o $700,000.

results will be expected when this is ap

induced ans (greater than 900 hp).

Plant operations will soon be controlled

SCADA (Supervisory Control and Data

Acquisition) system, which will allow Cr

monitor equipment status and measure

consumption at key points in the system

the cost o the SCADA system is not ins

Cross eels the investment is worthwhile

cant make good decisions without good

said Cross. By identiying which proces

consume the most energy, the SCADA sy

give us a good roadmap or how to pursu

energy savings opportunities.

Energy conservation and waste reductioabsolute priorities or the company and

management team. Environmentally,

and ethically we must take energy eci

seriously, Cross said. We cannot cont

take this critical resource or granted.

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6/11


eduCing eleCTriCTY CosTsoosTs Your BoTToM line

quat at ulla eugait venibh eugait ulputem do digna autet lore

psum iure min et, conse consecte acil deliquam, quissi.

ptatue eu acilit num et ad mod dolorem zzrit lortie acidunt

nisl ea commy nostrud magniscil etueros exero dit et wis nis

loreet wismolu mmoloborem qui blam ing elis dolor suscip

liqu amcommo dolorpero dio Im quat at ulla eugait venibh

gait ulputem do digna autet lore dipsum iure min et, conse

nsecte acil deliquam, quissi. Uptatue eu acilit num et ad

od dolorem zzrit lortie acidunt venisl ea commy nostrud mag-

scil etueros exero dit et wis n is doloreet wismolu mmoloborem

i blam ing elis dolor suscip eriliqu amcommo dolorpero dio.

Pt y a t y pat

th ft tm a a

akabt. lk a a y may

f m y ay y a jt

by mak m ma cha.

w are you actually using electricity? Understand-

g this simple question will drive all your energyanagement initiatives.

entiy what machinery and processes are the main

nsumers o electricity and determine how much

ey cost to operate. Find out when machines are

nning what time o day they operate and whether

eir running times overlap unnecessarily. There are

ely some savings that can be achieved with little

ort or investment.

re are some examples o how you can make small

ergy savings* add up:

f you are using an air compressor to sweep the

foor, an industrial vacuum cleaner will do a better

ob at less than 10 per cent o the cost.

That old, dirty pop vending machine in the

caeteria could be costing you $550 a year in

electricity alone.

0 four-foot uorescent tubes running 24/7 cost

more than $300 a year do they really need to be

on all night?

osts are based on 2006 prices including both demand and

ergy charges)

wareness o your energy costs can be a signicantntributor to urther savings. Perorm an audit

all equipment and processes so you know where

ur energy dollar is being spent. Even posting

eration costs on each piece o equipment sends

e signal to employees to think about how electric-

is used throughout the acility. You may consider

etering within your operations to get an ongoing

cture o where the highest levels o electricity are

ing used.

Take a look at the big picture. I you have an

interval meter, your LDC can provide a demandprole that will tell you when you are using the

most electricity which you can compare with your

operation schedules. Many LDCs provide these

proles online, so you can check in on a regular

basis between billing periods to evaluate progress.

Match the Need

The key to energy management is to make sure you

use only the electricity you need and then get the

most out o the energy that you are using.

Get started by cutting out waste. Turn o equipment

thats not needed. For example, you may be running

lights, pumps, conveyors and other equipment

that arent actually being used. You may also be

losing energy through poor maintenance. There may

be leaks in your systems that are orcing your

equipment to work harder and use more electricity

just to maintain required output levels. For example,

a one-quarter inch air leak in a compressor

system could drain enough energy to run 300

60-watt lamps.

You can also cut waste by using the correct equip-

ment settings or the job. Air compressors are oten

set at the level to meet the highest need and, as a

result, produce ar too much pressure or most other

applications. Rerigeration can also be a common

culprit o energy overuse. Make sure youre not

overcooling the space and not working against

yoursel by using lighting that creates heat, making

the rerigeration equipment work even harder.

2TAKe ConTrol oYour energY use

Check that as your processes change, you adjust

energy requirements accordingly. For example, itmay be that you dont need to exhaust as much air

because new processes have become more eective

at managing contaminants.

Maximize Energy Eciency

Once youve matched your energy use to the need,

make sure you do this in the most ecient way

possible. For example, i you want to slow the output

rom a pump or a an, slow the motor down, rather

than restricting the fow as this would still require

the motor to keep working at previous levels.

Its also important to maintain and operate equip-

ment according to manuacturers specications.

Simple things such as cleaning heat exchangers,

pipes and ducts regularly reduce energy use and

increase reliability.

Once youve covered the basics, you can s

explore what retrots or new equipment arto improve eciency. Lighting retrots are

the most common energy projects. Variabl

motors and compressors give you more con

your energy use and hence more control

costs. More inormation about energy ec

technology is on page 12.

Be Aware o the Peaks

Your production schedules may also have a

impact on your bill i you schedule more ele

consumption during on-peak periods than o

periods. I this is the case, you may want to

shiting some energy use to lower-priced tim

day. For example, heating, ventilation and a

conditioning (HVAC) controls can be program

take advantage o o-peak hours. Or, as pric

be lower in the morning than in the aternoo

may be some processes that could be pero

earlier in the day or even overnight.

The very best way to get buy-in

from our operators is to put

control of electricity in the hands

of those who use it.

A acc, act Maa, Hky ijct

M sytm lt.

COST

($)

HOURS

7 am 3 pm 3 pm 11 pm

1 2 3 4 5 6 7 8 1 2 3 4 5 6 7 8 1 2 3 4 5 6 7 8

11 pm 7 am

0

20

40

60

80

100

Aa Hy Ct t 1 Mw (c ay tta)

m nmb 2006 t octb 2007

This example compares the cost o consuming 1MW during

three eight-hour shits.


7/11


Ask Al Fiacco what it takes to implement a

major change in energy management processes

and hell give an unequivocal response: support

rom the top. Having the commitment o the

president is absolutely essential, he said.

I the president doesnt stand by the project

and make it a priority or the entire senior

management team, it will never trickle down

to the plant foor.

Fiacco is the Facilities Manager or Husky

Injection Molding Systems Ltd., a Bolton-based

manuacturer o injection molding machines

and components, hot runners, robotics and

integrated systems. Founded in 1953 by Robert

Schad, Husky is one o the worlds leading

suppliers o injection molding equipment and

services to the global plastics industry. Since

the late 1990s, Husky has broadened and

diversied its oerings to include solutions

or the packaging, automotive and

telecommunications markets.

With annual electricity costs totalling several

million dollars, good energy management

practices are an absolute priority. In act, energy

eciency is entrenched in the companys

Guiding Principles. We practice proactive

environmental responsibility, the sixth principle

reads. Energy ecient buildings,

comprehensive programs to minimize waste

and other highly visible practices demonstrate

our commitment to the environment.

This ocus on environmental responsibility

has earned Husky considerable recognition

in Canada, the United States and Europe.

The company was also eatured in Report on

Business Magazines 50 Best Companies

To Work For In Canada or ve years since

2000 alone.

Huskys Canadian headquarters are spread

across a 54-acre campus with ve buildings and

a total area o 863,000 square eet. Total

demand at the site is seven megawatts (MW),

with the three testing and machining buildings

consuming the lions share o electricity.

Fiacco says Husky has taken a proactive

approach to managing its electricity

consumption and costs. The company recently

purchased and installed an engineered

conditioning system that is showing tre

results. The system has several importa

eatures:

It improves and stabilizes voltage sup

which results in improved energy qua

equipment eciency and longevity, a

energy savings.

It shields against surges, transients a

spikes, which protects equipment at

It lters broadband harmonics, which

line losses, demand and consumptio

It improves the power factor, which o

electricity quality and eliminates cha

the LDC.

Together with lighting and HVAC retro

equipment upgrades and control system

improvements, the introduction o a po

conditioning system has helped Husky

13.7 million kWh o its annual energy

consumption. With a total investment o

than $2 million in this program, the va

energy projects have paid or themselve

in less than two years.

While technology is absolutely critical t

new-ound energy savings at H usky, the

other actors. Fiacco and Huskys Glob

Management team launched a multi-a

training initiative in late spring to help

equipment operators understand energ

eciency opportunities at the plant. O

the products emerging rom the trainin

was a detailed checklist o things to do

leaving or the night including such o

things as shutting o equipment not re

or the next shit, turning o unnecess

lights, and shutting o the exhaust and

conditioning systems.

We said to our employees, Heres whe

can help, Fiacco explained. The very

to get buy-in rom our operators is to pu

o electricity in the hands o those who

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Tth th ht a HvAC tft, qpmt

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y cmpt.


8/11


demand during peak periods. Ultimately these

programs contribute to the overall reliability othe system and reduce the need to build additional

generation capacity just to meet isolated spikes

in demand.

Most companies participate in demand response

programs through aggregators as their individual

contribution might not be large enough to meet

eligibility requirements.

emcy la rct Pam (elrP)

The IESO provides incentives or demand reduction

during critical peak periods. Participants in the ELRP

are notied when they are needed to be on standby to

reduce energy and will receive payment o $15 per MW.

And i called upon, they can receive up to $600 per MW

or actual measured and veried reductions. This

program reduces the need to make emergency energy

purchases and voltage reductions when the power

system is strained.

dma rp 3

The Ontario Power Authority (OPA) oers contracts

to companies to reduce load during the most valuable

100 to 200 hours o the year. Participants make

themselves available during those hours or potentialnotices to reduce load and receive payments or both

availability and actual energy reductions, in return.

rc th payback p y

y fccy pjct by patc

ct pam. o btt

cat y ct by tak

pat ma p pam

a a-ht t.

Incentive Programs

There are many options when it comes to energy

eciency incentive programs. Some are designed to

get you started, others support more costly, sophisti-

cated energy management initiatives. Here are a ew

that will help you reduce payback times or your

energy eciency projects.

Electricity Retrot Incentive

Program (ERIP)

This program, oered by LDCs in partnership with

the Ontario Power Authority (OPA), provides unding

or the purchase o energy-ecient technologies.

Eligible technologies include lighting retrots,

premium eciency motors, and ENERGY STAR

rated power transormers and air conditioning units.

Custom projects are also eligible or incentives o

$150 or each kilowatt o demand reduction.

ecoENERGY Retrot Incentive

or Industry

Natural Resources Canada will provide small and

medium-sized businesses with up to 25 per cent

o the cost o retrotting the building envelope or

existing systems and equipment, with a maximum

o $50,000 per application. Projects must have a

simple payback period o more th an a year.

Demand Response

In recent years, demand response has emerged as

another avenue or businesses to leverage their

electricity use to improve their bottom line. Today,

there are a number o demand response programs

that provide incentives or companies to reduce

4use inCenTives ToYour AdvAnTAge

oc y ha a a th

pata cha that ca b ma

t mp fccy, y ca b

t k at m btata tmt

tch.

hether its new equipment or retrotting existing

cilities, manuacturers have a number o optionsey can pursue.

nding the right technology to t your need can

a challenge, but can bring with it signicant

yback in terms o costs savings and environmental

nets. Do your homework to nd the technologies

at will help you on your way to achieving your

ergy savings targets.

res a checklist o some o the technologies you

ay want to consider as part o an energy manage-

ent plan:

ht rtft: Industrial lighting applications

e becoming increasingly sophisticated oering

gnicant savings and improved illumination.

witching rom T12 to T8 fu orescent lightbulbs can

ave 20 per cent o your lighting bill. Automated

ntrols can add to your savings by light-harvest-

g or switching o or dimming lights when natural

ht is available.

jtab sp d: Control pumps, ans and

nveyors at the source by installing adjustable

eed drives (ASD) on the motors. ASDs can ampliy

ur savings. A centriugal an or pump operating at

l speed and hal fow will require less than a

arter o the energy o a xed speed an or pump

at is dampered or throttled to the same fow.

ab sp A Cmp:Air compressors are

ronically inecient machines. They require a lot

energy or a relatively small output. Tackle this

allenge by using a variable speed air compressor.

variable speed air compressor at minimal air

livery would use a quarter o the power o a xed

eed air compressor.

HvAC Ct: Heating and cooling systems can be

amongst the most energy intensive aspects o yourbusiness. Upgrade heating, ventilation and air

conditioning systems so that you use no more or no

less than needed. Chillers and other HVAC equip-

ment can be pre-programmed to gear up during

o-peak times to take advantage o lower prices, or

scale down during price spikes to lessen the impact

o higher prices.

rat:Rerigeration machines that provide

cooling or manuacturing processes and acility

space can be signicant consumers and wasters o

energy. When its time to replace this equipment,

modern chillers can oer attractive eciency

improvements. As with other equipment, rerigera-

tion chillers can benet rom controls that sequence

multiple smaller compressors in order to moderate

demand or use speed control to vary the capacity o

the whole rerigeration system according to the need.

P act Cct: Investments in capacitors

and other equipment to improve the power actor

can reduce demand charges. This equipment helps

align current and voltage so that your acility draws

electricity more eectively rom the distribution

system. Power actor correction projects oten result

in 10 to 15 p er cent reductions in demand charges.

Energy management is not about compromising it

can enhance your processes. Nowhere is this more

evident than in adopting new technologies to

increase energy eciency.

3ind THe rigHTTeCHnologY


9/11


Ktz ectpat ic.:

gat

hh ma p

it ta Ktz ectpat i c. t ha a

ab ppy y at a tm. Th

pmpt thm t t back-p at hch

pay m ay tha .

Its not every day you have the opportunity to

earn up to $800,000 annually by not consuming

electricity but Kuntz Electroplating Inc. is

acing that very scenario.

A amily-owned and operated business since

1948, Kuntz is one o North Americas premier

metal nishing operations or original equipment

manuacturers o steel and aluminum products.

Headquartered in Kitchener, Kuntz has 600

employees responsible or the design,

development and application o electroplating

products and specialized perormance coatings

or clients like Harley-Davidson, General Motors

and Ford.

Our business is very energy-intensive, so

electricity is a considerable cost, said Robin

Leach, Environmental Manager or Kuntz.

It is absolutely essential that we have a reliable

supply o energy at all times.

This need or reliability prompted the company

to invest heavily in back-up generation in the

mid-90s. Since that time, urther investments

have been made, and the acility now has ve

clean-burning natural gas-red generators with

a total installed capacity o 4.1 MW. Waste heat

rom the electricity-generation process is

captured through low-pressure boilers that

produce steam used or their plating process.

The generators were rst installed at a time

when natural gas was relatively inexpensive.

Since that time, Kuntzs calculations have

indicated that generating their own electricity

no longer made nancial sense. A new approach

was needed, which was provided by the OPAs

Demand Response 1 (DR1) program.

DR1 empowers customers to reduce their

electricity consumption in response to high

price conditions which can be indicative o

system peak loads or tight supply conditionson the electricity grid. Under DR1, Kuntz

generates electricity only when asked to by

the OPA, based on price and demand. The net

benet to Kuntz in the rst eight months has

approached $250,000.

Ater months o participation in the pro

Kuntz is now investigating DR3, the lat

initiative in the OPAs ongoing eorts to

stimulate demand management, conse

and generation among Ontarios high-v

electricity consumers.

DR3, Contractual Response Peak Loa

Shedding, has been designed to provi

OPA with additional contractual deman

response capability to reduce demand

power system managed by Ontarios IES

Participants, not participating through

aggregator, must have a demand respo

capability in excess o 5 MW to receive

payments or their ability to cut consum

on demand, when the IESO identies r

local or general system reliability.

While Kuntz has not yet signed on the d

line, Chie Operating Engineer Keith La

eels there is considerable upside to

participating in DR3. We have worked

closely with our demand response part

Energent, to quantiy the impact o par

in DR3, he said. On the surace, the

are pretty compelling. According to La

calculations, Kuntz stands to earn up t

$800,000 annually over a ve-year ter

For its part, Kuntz would agree to shed

load rom the provincial electricity grid

through conservation or generation, wh

requested by the IESO or a maximum

hours per year. The company would als

be on stand-by or up to 1,600 hours a

To achieve the 5 MW minimum genera

required by DR3, a considerable invest

new generation would be required. Ev

the nancial side o DR3 looks very att

Laycock said.


10/11


A looK inside onTArios eleCTriCiTY MArKeT

ntarios Independent Electricity System Operator (IESO) is responsible or

anaging the provinces power system and operating the wholesale electricity

arket. It balances supply and demand throughout the province, 24 hours

day, seven days a week.

Hourly Price Adjustments

The hourly price is currently mitigated by a number

o adjustments such as the Provincial Benet and

the Ontario Power Generation (OPG) Rebate.

The adjustments will impact your overall electricity

costs, but you will retain the overall value o

shiting or conserving energy during high-priced

periods. More inormation about both adjustments

is available on the IESO website at www.ieso.ca/

rebates.

or More inorMATion on:

Your local distribution company

..ca/ftty

Electricity price inormation or businesses

..ca/b

Retail electricity contracts

..ca/ta

Joining the IESOs Emergency Load Reduction Program

..ca/elrP

The Ontario Power Authority

.pathty..ca

Conservation programs available province wide

.catba..ca

Natural Resources Canada Oce o Energy Eciency

..ca.c.ca

A exta 2,000 Mw 51 H

Ontarios electricity inrastructure is built

so that there is enough available generation

capacity to meet the highest d emand.

This eature is critical to ensuring reliability.

In 2006, or example, Ontario demand

peaked at 27,005 MW, but exceeded 25,000

MW or only 51 hours over the past two years.

And while the power system ably met thesedemand spikes, they did highlight the

ineciencies o having more than 2,000 MW

o power generation capacity that is only

called into production or those 51 hours

the equivalent o over two days. I these peaks

in demand are reduced, so is the pressure on

prices and the need to have extra generation

capacity just to meet a ew hours o demand.

The Independent Electricity System

Operator (IESO) manages the

provinces power system so that

Ontarians receive power when and

where they need it. It does this by

balancing demand or electricity

against available supply through

the wholesale market and directingthe fow o electricity across the

transmission system. Visit the IESO

at www.ieso.ca.

Canadian Manuacturers &

Exporters (CME) is Canadas

trade and industry associati

promotes the continuous im

ment o Canadian manuact

and exporting through engag

o government at all levels. I

mandate is to promote the ctiveness o Canadian manu

and enable the success o C

goods and services exporters

markets around the world. V

CME at www.cme-mec.ca.

a result, the price o electricity rises and alls

sed on a variety o actors such as demand,

e weather and the types o generation available.

r example:

Prices are generally lower on weekends and at

night. On weekdays, the price o electricity usually

peaks in the early evening as people arrive home

rom work.

Weather can have a tremendous impact on

demand. Extreme cold spells and heat waves oten

create surges in demand as people increase

heating and air conditioning. For example, eachdegree above 16 C creates an additional 380MW

o demand.

The amount of electricity that is available in the

market also infuences the price. Some generation

may not be available because o equipment

maintenance.

Price also depends on what types of generation

are available some cost more to operate than

others. As demand or electricity increases through

he day, the more expensive sources o electricity

are called up to meet that need.

alizing the ull benet o hourly prices will

quire a greater level o eort and understanding

electricity price patterns within your organization.

r example, ensuring that sta can respond to

treme heat alerts when the price may spike will

lp insulate your acility rom unusually high prices

d help support reliability o the system.

e IESO provides a wealth o inormation about

ectricity demand and prices at www.ieso.ca/

siness. Here you will nd current prices, as well

anticipated prices or the next day. You will also

d historical inormation that will help you

mpare your costs to what they might have been

the hourly price.


11/11

18 Managing Your Electricity Costs

ipt ectcty sytm opat

655 Bay Street, Suite 410

P.O. Box 1

Toronto, Ontario M5G 2K4

www.ieso.ca/business

Phone: 905.403.6900

Toll-ree: 1.888.448.7777

Fax: 905.403.6921

E-mail: [email protected]

Date post:	14-Apr-2018
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