Adjusting production schedules to lower energy costs

Industrial manufacturing businesses can save over 30% on electrical bills, and cut greenhouse gas emissions by over 5%, by adjusting production schedules, according to US research.

“Manufacturing enterprises can take advantage of critical peak pricing (CPP), a demand response technology, in the transition towards smart electric grid to significantly lower their energy cost,” said Yong Wang, assistant professor of systems science and industrial engineering at Binghamton University’s Watson School of Engineering and Applied Science. “They can do all of this while contributing to reducing greenhouse gas emissions, too.”

Wang’s results will be published in the August edition of Applied Energy in a paper titled ‘Critical peak electricity pricing for sustainable manufacturing: Modeling and case studies’.

The researchers studied electrical CPP rates over the last 10 years in California for business applications, with a focus on industrial manufacturing customers. They determined that in cases with one- or two-shift productions, a company could save 30.45% on its electric bill by rescheduling work patterns around announced critical-peak (high-demand) electrical events, like hot summer afternoons. A byproduct of less electrical demand is a cut in greenhouse gas emissions of 5.63%.

CPP is a flexible method of pricing electricity. Specific dates for a critical-peak event (there is a maximum that can be scheduled in a year) are announced to customers 24 hours before the event occurs. During the critical-peak event, electricity use rates can be 10 times higher; however, customers are offered discounted prices during other days of the year. Setting work schedules to use as little machinery and electricity as possible during CPP events enables businesses to significantly reduce their total electric bill.

“It is challenging to simultaneously coordinate production activities, energy consumption and environment impacts to achieve manufacturing sustainability. With the new development of smart grid technologies, new financial and environmental opportunities have emerged,” said Wang.

Despite the potential benefits for one- and two-shift productions, Wang advocates for a case-by-case analysis before implementation — the average electric bill and vicarious diminished emissions output of three-shift production sites cannot be lowered through rescheduling the whole block of production only. He indicates that intelligent scheduling strategies that involve delicate adjustments of individual processes may create additional production flexibility and make these benefits achievable.