Tag Archives: energy

The energy and utilities industry is in the midst of change.

Businesses are facing pressure from the government and consumers alike for more renewable energy while also balancing that with grid reliability and traditional energy sources. Meanwhile, electricity demands are expected to skyrocket. Other wild cards are supply chain disruption, labor shortages and more.

But within those challenges, we always see opportunities. Let’s take a closer look into the outlook for energy.

Continued focus on renewables. The demand for clean energy will continue to rise. Governmental regulations are mandating the focus on clean energy and decarbonization, including enacting green-friendly legislation and incentives for companies to transition to cleaner sources like solar and wind. The industry made great strides in solar power and the energy storage it necessitates in 2023, but more is needed and the focus will continue in 2024 and beyond. Consumers are demanding it as well, with climate change among people’s top concerns. All of it has led many companies to push the timeline to cut carbon emissions by 80% from 2050 up to 2030.

Energy storage. The push for solar requires an enormous amount of battery storage capacity to, in very simple terms, store all of that energy for times when the sun’s not shining. It means innovation in battery technology, and 2023 saw much of that, with storage capability doubling in 2023 and set to nearly double again in 2024.

Electricity surge. According to industry sources, the demand for electricity is expected to triple by 2050. It means planning now for this increased load on what is likely aging infrastructure, resulting in costs to shore up that infrastructure to ensure grid reliability. It’s also necessary to consider expanding the grid to meet that demand.

Aging grids + extreme climate.  We all saw the worst-case scenario play out in Texas when their grid failed when the state experienced a rare deep freeze. But weather extremes are becoming the norm, with heat, wildfires and drought on the one hand, floods and record snowfall on the other. The industry is modernizing the grid, and made progress in that area in 2023, but reliability is still a large concern.

Supply chain uncertainty. The recent geopolitical unrest in Ukraine and the Middle East has underscored the need to reshore this nation’s oil supply.

Labor shortages. Like many industries today, energy is battling a labor shortage and facing the double whammy of their most experienced workers retiring and taking institutional knowledge with them, and having too few younger people in the pipeline to pick up where they left off.

It’s a full plate for the energy sector in the coming years, that’s clear. But within these challenges, we see opportunities to bolster processes, making operations more efficient and guard against supply chain snafus. Reducing operating costs, improving productivity and increasing efficiency will help the industry navigate these challenging times.

This is where USC can help

Management Operating Systems. A solid Management Operating System is a must for efficiency, time savings, employee productivity and so much more. For a real-world example on how USC helped an energy producer save time and money by implementing an MOS, read “Energy Producer Generates Savings with Smarter Labor Practices.”

Reskilling employees. All of this innovation and growth in renewables, not to mention AI entering the mix, requires more workers with new skills. This can be very good news for your current employees, who can move up the food chain with new training, and the ability to attract highly qualified workers.

Resource planning. If you know anything about our company, you know we are great proponents of SIOP – Supply, Inventory and Operations Planning. It gives companies a roadmap to the future, so they’re not reacting to events, they’re anticipating them. With the exponential growth of the energy and utilities sector in the coming years, solid planning for the resources needed for that growth, like increased storage capacity and grid strength, is a must.

Bottom line, delivering reliable, affordable and sustainable energy is the goal for the energy and utility industry. It takes efficient operations, a handle on resources, and a clear eye toward the future. Contact us today to find out more about how USC Consulting Group can help.

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The story of continuous improvement in U.S. energy has two alternate endings. Depending on the topic of conversation, the sector is either a poster child for CI or a cautionary tale for what happens without it.

How can the energy sector learn from its mistakes, double-down in its successes, and chart a course for better CI implementation in the future?

CI in energy: The good, the bad and the ugly
Over the last decade, the United States has surpassed Russia as the No. 1 natural gas-producing nation in the world, according to the Central Intelligence Agency. Additionally, the Energy Information Administration recently reported that, since 2008, crude oil production has nearly doubled to just over 9,100,000 barrels per day. As much as advantageous global economics drive this prosperity, these wins cannot happen without sustained logistical excellence afforded through continuous improvement programs and expert deployment throughout the industry.

On the other hand, the troubles in the production, generation and transmission arms of the energy sector at times outweigh all the good found upstream. These sections have widely struggled to update legacy infrastructure well-past its prime, integrate the latest renewable energy technology into their operations sustainably, and safeguard the grid from cyberattacks. Although deeper dives may reveal success stories in one or two of these problems, the industry is far from where it ought to be and much can be attributed to a failure to adapt intelligently with the times.

Without a deeply rooted culture of continuous improvement, the future of the energy sector could be bleak.

With so much to be done, the energy sector must learn to adapt quickly but sensibly, a lesson offered by the very best continuous improvement practices. Thinking about implementing or improving upon CI at your energy firm? No matter where your company resides on the energy continuum – exploration, extraction, production/generation, transmission, or distribution – it’s time to get serious about your methodology for identifying, engaging in and optimizing improvements across all areas of your business.

How can companies in the energy sector build lasting appreciation for and adherence to continuous improvement to meet its challenges head on?

Question everything, even the best problem-solving
Writing for Finance Magnates, Grant Eggleton, vice president of Global Production Solutions at P2 Energy Solutions, made a compelling point, perhaps unintentionally, about CI in his discussion of big data and surveillance in oil extraction.

At the surface, predictive forecasting through the acquisition of large data sets resolves many issues upstream oil has faced throughout its existence: safety, shortages of skilled labor, and cost-effective asset management that supports uninterrupted uptime. However, unless surveillance data fuels a greater, more specific mission, extractors run the risk of producing a glut of information with little to no insight or actionable intelligence.

How then does a continuous improvement team treat a great idea with a high risk potential? By defining all CI projects with limits and exceptions that gauge their usefulness. Once the established projects fall short of these qualifications, the team must reassess and possibly restructure the system. Remember: A great idea in desperation may not be a good idea in times of success. Always self-evaluate and put the criteria for evaluation in concrete terms.

Strive for cross-departmental buy-in
Previous posts have stressed the importance of creating a diverse CI project management team. As valuable as that is on a project-to-project basis, CI is also a holistic enterprise philosophy. It touches all corners of a business regardless of industry, and even small pockets of reluctance can dismantle the entire undertaking.

If, however, leaders feel as though they are forcing CI initiatives onto unwilling workers, they must stop immediately and re-examine their approaches. Employees are not to blame. This friction is, more often than not, evidence that management has failed to put together a department specific value proposition for CI.

Where this is most common is in industries like energy with complex regulatory frameworks undergoing massive transitions. Sometimes, CI teams may feel as though paving the fastest route to compliance involves steamrolling right through one department, making extra work or mandating unexplained changes.

Fight that urge. Remediation of this problem and advocacy from all will require a stronger balance between the letter of the law and discussions with departmental stakeholders.

Always leave room for motivation
Continuing from our last point, how does a CI team instill the importance of an improvement whose value is not readily understood or directly derived from the actions of a single department?

How, for example, does an energy transmission company meaningfully articulate the gravity of behavior-based safety protocols to its maintenance technicians? By demonstrating, in no uncertain terms, the many consequences suffered by injured workers, co-workers, end users and the greater business. Moreover, CI teams must express how these frontline employees are the strongest defense the company has against these problems. The successes or failures of the employer hinge entirely on those willing to take on this enormous responsibility.

The same method should be applied to every CI project, from incorporating new cybersecurity standards to training for reporting on new efficiency retrofits. Once intangible benefits are placed in tangible terms, any subset of the energy sector can drive CI for anything. Building this motivation into the project, however, takes finesse and planning.

For information and guidance on how to approach specific CI projects in energy, contact the project management experts at USC Consulting today.

All businesses retain value one of two ways: capturing revenue at the right moment or avoiding costly risk before it hits company coffers. What opportunities and dangers on the horizon should U.S. glass manufacturers strive toward or veer away from?

1. Mind energy efficiency innovations and their industrial applications
Far and away, glass manufacturing is one of the most energy-intensive industries in the industrial sector. According to research from the Energy Information Administration, U.S. glassmakers consume about 200 trillion British thermal units of energy annually, primarily derived from 143 billion cubic feet of natural gas. A quarter of total consumption, however, comes from electricity.

The EIA estimates energy reductions to melting, refining, and possibly forming processes, depending on the product under manufacture, could yield a sizeable return of 20 to 25 percent. Companies interested in energy-efficient operations should watch out for progress in science surrounding direct current field technology, which, among other things, lowers the melting point of glass for more cost-effective production.

Is energy efficiency on the horizon for glass manufacturing?

2. Envision a world with stricter glassmaking regulations
Last year, glass producers across the country were the subjects of federal scrutiny after the Environmental Protection Agency caught several companies using highly toxic materials to tint their products. More to the point, these facilities also lacked the appropriate filtering and ventilation technology to protect workers, the surrounding neighborhoods and the environment from the toxic, even carcinogenic, byproducts of consumed cadmium and other heavy metals.

Time will tell what will happen in the aftermath of this discovery. Current political ambiguity has pushed the matter off the EPA’s plate for now. However, glassmakers everywhere should take heed while there’s still time. What regulators find when the investigation reopens could spur new oversight and mandates throughout the industry. Are your operations agile enough to accommodate possible changes? Does your business possess enough capital to invest in additional safety measures should they be required of you? Will your processes withstand audits from the EPA?

3. Enter new markets with confidence
There’s market share and wallet share, but have you ever heard of “building share”?

No? Well, it’s only a matter of time before this concept takes off. As the U.S. toys with entrance into a new era of infrastructure spending and widespread construction projects, glass manufacturers must follow the innovative trends set forth by sister industries like concrete and steel to grow more valuable in the eyes of developers and contractors. The next architectural generation will define itself through greener, more energy-conscious building materials.

For glassmakers, this means not only consuming energy more efficiently, but also diversifying product portfolios and creating valuable partnerships to capitalize on offerings like photovoltaic glass, which, when installed, converts solar energy into usable electricity. In 2015, customers around the world bought 580 million square meters of PV glass, according to RnR Market Research.

In addition, many glass manufacturers have also begun formulating smart glass, which becomes more transparent or opaque on command. By restricting or exploiting direct sunlight and its heat, buildings enjoy energy cost savings from both lighting and HVAC systems.

With that said, to build long-lasting partnerships with new suppliers, glass manufacturers must demonstrate their operations are up to snuff. Just as important, these same businesses must ensure the vendors they work with won’t hold them back either. Consider both sides when entering into negotiations with suppliers, and never sacrifice a legacy of success for an uncertain future.

4. Train staff for 21st-century duties
In the past 30 years, U.S. manufacturing has lost about one-third of its jobs for myriad reasons, according to the Brookings Institution. Many rightly fear the effect automated glass manufacturing processes will have on employment. The entire industrial sector is currently undergoing a perfect storm of issues, automation among them, that are having a corrosive effect on hiring. This challenge also includes a sizeable swath of retiring baby boomers and difficulty finding eager and highly skilled applicants to fill open positions.

An investment in professional development and training can and should be a viable solution for any glassmaker. All it takes is leveraging human capital in such a way that long-time line workers become next-gen technology leaders. If done right, businesses prevent operational disruption and develop knowledgeable teams with ideal job experience. After all, these workers will already know everything about not only glass production, but what’s unique about glass production at the business that trained them.

However, training is and will forever be an ongoing process. As automated technology advances, so too must the businesses utilizing it. Through cross-functional collaboration and professional consulting, glassmakers should optimize and lean down as best they can to transform wasted costs into investment opportunities in the future of their workforces.

What challenges do glass manufacturers face as they attempt to reduce their energy consumption? Where might they turn to achieve significant results?

Troubles with energy efficiency in glass manufacturing as a sector, true to its product, are as transparent as they’ve ever been in this age of sustainability and eco-conscious private sector leadership. For the sake of the environment and operational costs, the glass industry has sought ways to rectify the matter.

Glass production: Portrait of an energy-intensive industry
According to data from the U.S. Energy Information Administration, glass manufacturing – the production of glass containers, flat glass, fiberglass, etc. – accounts for 1 percent of the U.S. manufacturing sector’s total energy consumption, placing it on par with other energy-intensive industries like steel and cement. However, as the EIA stipulates, glass manufacturing throughput volumes are much lower than others of its consumptive caliber, thus making it all the more inefficient in terms of energy use per unit.

“Melting processes consume 65% to 75% of energy required by glassmakers.”

Furnace operations represent the majority of energy expenses for glass manufacture across all subcategories, according to a study from the International Energy Agency. Depending on region of product, end product, and utilization of processes like sintering or cullet agglomeration, melting limestone, silica sand, or soda ash consumes anywhere from 65 to 75 percent of energy required by a given glassmaker. With so much riding on energy expended for direct production, any optimization efforts glass manufacturers undertake run the risk of compromising the integrity of the product and further complicate matters.

Nearly three-quarters of fuel usage for glass production in the U.S. relies on natural gas, with the final quarter primarily coming from electricity by way of “boosting.” In a pinch, electric boosting technology can increase production dramatically – but it comes at a cost to efficiency as manufacturers trade additional operating costs for immediate results to keep up with demand.

Although these challenges may be great, in what ways have some glassmakers already begun turning energy-intensive operations around?

Furnace upgrades and process changes retain heat and long-term value
Innovation will ultimately resolve the glass industry’s high energy consumption, especially as it pertains to the technology charged with controlling combustive fuels and heat transfer in glass-producing furnaces.

Glass manufacturing requires a light touch, both in forming products and controlling fuel.

First, any industry utilizing natural gas as a fuel source is bound to run into trouble with inconsistent diluent and hydrocarbon makeup. The result is an inability to predict or react to intensity increases or decreases within the burner, sometimes leading to resource overuse. Should glassmakers invest in technology capable of balancing the flow of natural gas into their furnaces regardless of composition or steading their air-to-fuel ratios, they will effectively reduce energy consumption at a traditionally wasteful process point.

Furthermore, while it may offer glass manufacturers greater market agility, electrical boosting technology can defeat its own purpose of meeting demand increases by adding considerably to energy costs, thus mitigating or negating revenue. Instead, the U.S. Department of Energy recommends outfitting outdated furnaces with waste heat capture retrofits for process heating. This technology captures lost heat and returns it to the furnace before electrical boosting occurs, priming the materials inside and reducing the amount of boosted energy required to raise the temperature to an actionable degree.

In fact, minimizing heat loss at any opportunity throughout the entire glass manufacturing process would also help immensely. Efficiency gains may only require operators to close furnace doors as often as possible or initiate a preventative maintenance program to ensure all energy-reliant assets stay in good working order. Never underestimate these little optimizers – they can really make a difference.