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Four key drivers for energy management in manufacturing

24 July 2024

Capacity, decarbonisation, resilience, and cost are four key drivers in today’s energy market, explains David Bean

INFLATION, HIGHER interest rates, overseas competition and price shocks in the energy market have put UK manufacturers under considerable strain in recent years. However, there remains cause for optimism. 

Last year, the government announced £4.5bn in funding for eight sectors of UK manufacturing, with some £960m set aside for clean energy provision. 

Whilst, it’s difficult to say if this investment will materialise given we are in an election year, the announcement is useful as it points to one of four key drivers in today’s energy market. Understanding these drivers - and how to manage them - will be key for maintaining healthier margins in production environments. 

Four Key Drivers 

Capacity is arguably the most important driver, with McKinsey suggesting power consumption is set to double by 2050. Whilst this is an issue that extends far beyond the next year, the strain this will place on high energy users is undeniable. Not least because the grid is already struggling. 

Decarbonisation and resilience are also shaping how manufacturers use energy. The overall contribution from renewables to the UK grid is increasing, however the intermittency inherent to this process means mains power is no longer as dependable as it once was. 

This is partly why distributed energy resources are growing in popularity. These technologies allow businesses to generate, trade and consume electricity in a way that’s simply not possible when relying on a traditional centralised grid, limiting exposure to the type of market shocks seen over 2021-2022. 

And this leads to the final driver; cost. Whilst energy market conditions appear to be returning to something resembling ‘normal’, this does not guarantee protection from further disruption. So, what can be done? 

Towards Continuous Improvement 

Smart energy solutions, such as Mitsubishi Electric’s energy management portfolio, are able to address some of the challenges posed by the four key drivers. 

Take decarbonisation. Research shows many businesses are confident in their ability to deliver a sustainability programme, yet the managerial and operational processes needed to make this transition a success are often lacking. 

This is where digitalisation is critical. Digital tools make it easier to optimise and execute energy strategies based on trends from real-time manufacturing data. Without this level of insight, it’s impossible to know whether energy is being used effectively and if there are assets requiring attention.

Smart energy management also makes it easier for businesses to integrate distributed energy resources as they become available, such as microgrids and battery energy storage systems. 

Whilst we are still some way off a fully decentralised energy network, the direction of travel is clear. This model provides better energy resilience and the opportunity to make use of green energy infrastructure. Given the government’s £960m pledge, ‘now’ appears to be an opportune time for manufacturers to explore these opportunities.   

David Bean is solutions group manager at Mitsubishi Electric Automation Systems Division

For more information: 

gb.mitsubishielectric.com

Tel: +44 (0)1707 / 28 87 80

 
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