Case Study: Energy Management Helps Ceramic Manufacturer Put Power on the Plate
Steelite International is finding multiple benefits by implementing some simple energy management strategies.
All energy-intensive industries—including ceramics—are vulnerable to massive unilateral increases in UK energy and carbon costs. As companies compete internationally, they need a level playing field. As such, energy management and decarbonization technologies are becoming a key issue across boardrooms.
With the help of approximately 800 employees, ceramics giant Steelite International plc produces around 1.6 million pieces of crockery every month. Steelite products are exported to more than 120 countries worldwide, including the U.S., Canada, Australia, the Far East, and Africa. Customers include TGI Fridays, Hilton Hotels, Pizza Express and Tim Hortons. In 2012, the company achieved £70 million (approximately $116.1 million) in sales. With an annual usage of some 2.6 million therms of gas supplying 13 kilns on one site in Stoke-on-Trent and 12 GWh of power, energy consumption and efficiency are boardroom issues for Steelite.
Steelite has continually met the government targets associated with the Kyoto Climate Change agreement, with an overall carbon reduction of 6%. The firm already recycles some 98% of its waste and is hoping to hit the 100% mark later this year. Reject crockery, for example, is reprocessed by a local firm to be put into floor tile.
Like all successful businesses, Steelite is careful to select suppliers that can support its goals. “For gas, we have been with DONG Energy Sales for a number of years,” said Davin Bates, management accountant. “On entering the power market, they made a concentrated effort to understand and assess our needs on the power side. For example, their ability to provide us with a flexible product offering small clip sizes with no fee is important to us—and not something we were offered by other suppliers.”
Purchasing and Demand Strategies
The regulatory framework for energy management is in place in the UK. However, some companies can find it difficult to make the cultural adjustments needed within their organization as additional meter reading business standards are introduced. Yet companies like Steelite are examples of the benefits available when a company takes advantage of the data-based solutions aspect of energy management and begin to implement beneficial purchasing and demand strategies.
Automated meter reading (AMR) technology is a key part of effort. AMR devices sit alongside the gas meter and generate a pulse that is captured via mobile phone technology and displayed on a website so that customers and suppliers can review it. It is the interpretation of this data and data-based decision making that makes sound energy management possible.
“We have found that improved data and efficient monitoring of energy usage is the first, and most significant, step toward managing it,” said Bates. “In particular, AMR has been a great addition to our energy management strategy. We can review our usage, see what is firing and when, and if there are any problems. It’s helping us manage a number of our manufacturing processes and informing commercial decisions.”
The impact of AMR devices on energy management is significant. By giving manufacturers a much deeper appreciation of the base load and volatility of their energy consumption, AMR allows them to work with their supplier in an informed way to select the most appropriate contract. This provides customers with the flexibility in consumption they need to operate their business with minimal risk of penalties.
Efficient invoicing is also vital. By partnering with a supplier that understands their need for granularity and transparency, customers can use billing as a valuable tool.
“It’s great getting such an open, transparent and detailed bill from an energy supplier,” said Bates. “Our invoice from DONG Energy Sales shows us all the charges for each element in sections. This gives us the ability to assess what time of day our charges are being incurred and informs our demand management. I’ve never had to query anything on our bills. With so much mistrust in the energy market, I’m glad it’s not something I have to worry about.
“We have found that improved data and efficient monitoring of energy usage is the first, and most significant, step toward managing it. Flexible elements of the contract are also key, as this enables us to implement a hedging strategy that optimizes our spend while managing the level of risk the business opts for.”