Industrial productivity


Efficiency leads to productivity gains in particular by lowering maintenance costs and increasing production yields per unit of input. In addition, improvements in operation and process reliability, which can result from efficiency gains, lead to reductions in equipment downtime, shutdowns or system failures. Optimising processes to enhance efficiency can also reduce staff time required to enhance operations and scheduling while reducing the risk of human errors.

More benefits are possible in an Efficient World

Between 2000 and 2017, energy intensity – final energy consumption per unit of gross value added (GVA) – in the industrial sector decreased by 25%. Greater productivity gains are still possible from the adoption of cost-effective energy efficiency measures, as described by the IEA Efficient World Scenario (EWS). By 2040, manufacturing industries could produce nearly twice as much gross value-added from each unit of energy use (Figure 1).

Figure 1. Industrial energy intensity and productivity trends in IEA member countries and major emerging economies, 2000-16 [1]

	Energy use	Gross value added	Energy intensity
2000	100	100	100
2001	99.02105475	99.5979895	99.42073655
2002	99.85898197	102.0115805	97.88984887
2003	103.517971	106.9213293	96.81695105
2004	111.7295976	114.8977746	97.24261244
2005	118.4723442	120.7531695	98.11116741
2006	122.7713847	131.2322172	93.55277798
2007	127.2349646	141.2123635	90.10185896
2008	128.5532013	146.1589663	87.95437224
2009	125.3910584	141.3435336	88.71368584
2010	137.3481537	155.0341891	88.59217084
2011	143.0660192	165.2773391	86.56118251
2012	143.79	169.85	84.66
2013	144.77	173.43	83.48
2014	145.99	179.00	81.56
2015	145.27	180.75	80.37
2016	144.35	186.82	77.27
2017	146.95	195.37	75.22
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	NPS	EWS
2017	100	100
2018	98.40665671	98.10630194
2019	96.45964796	95.7465197
2020	94.23702052	93.184447
2021	92.22610029	90.84039591
2022	90.19911798	88.46952474
2023	88.21409474	86.11047826
2024	86.25941525	83.7555329
2025	84.35416388	81.43151436
2026	82.46745093	79.13707177
2027	80.62359072	76.87580364
2028	78.83711356	74.650399
2029	77.10655653	72.46829039
2030	75.4485966	70.33572782
2031	73.86995542	68.31190804
2032	72.37537728	66.39823403
2033	70.96547241	64.60530623
2034	69.63513367	62.92987046
2035	68.38481445	61.3675845
2036	67.20307137	59.90859261
2037	66.08297381	58.53532091
2038	65.01772413	57.24060482
2039	64.00330641	56.01904379
2040	63.03666815	54.87423077
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Notes: Includes ISIC divisions 10-18, 20-23 and 25-32 and excludes mining and quarrying, manufacture of coke and refined petroleum products and construction. Excludes non-energy use (i.e. feedstocks). Countries covered for trends from 2000-17 are IEA members plus Argentina, Brazil, China, India, Indonesia, Russian Federation and South Africa. Industry energy intensity in the NPS and EWS is calculated on the basis of energy use per unit of gross value added (GVA), measured on a purchasing power parity basis in 2016 US dollars.

Energy management systems enable productivity benefits for industry

An energy management system creates the structure and processes for a company to monitor energy consumption and improve efficiency. In addition to energy savings, the adoption of an energy management system can lead to industrial productivity gains by improving energy performance and overall system efficiency. Other benefits can include enhanced production and capacity utilisation, reduced resource use and pollution, and lower operation and maintenance costs – all of which result in increased value generation, and thus improved competitiveness.

Results from companies participating in the United States Superior Energy Performance (SEP) Program provide an indication of the energy efficiency and productivity benefits obtained from the implementation of an energy management system. SEP is a voluntary program in which companies implement ISO 50001 (the global energy management system standard) and energy-saving projects, in order to show that efficiency has improved in accordance with established targets.

In 2015, the energy performance improvement of certified Schneider Electric sites was over 60% greater than non-certified sites. This additional improvement is also demonstrated through quarterly energy savings achieved by SEP certified companies. Quarterly energy savings prior to certification averaged 3.2% and increased to 7.5% in the four quarters after certification and 14.2% in quarters five to seven. In all cases, the improvements observed for certified sites increased over time, illustrating that the benefits of energy management can grow as sites became more knowledgeable and experienced.

Figure 2.  Energy performance improvement of ISO 50001 and SEP certified Schneider Electric sites compared to non-certified sites, 2012-15 (left) and verified average quarterly energy savings from SEP certified companies, pre- and post-certification (right)

 industry2

Note: Based on data analysis conducted by Schneider Electric

Source: IEA (2018), Energy management systems and digital technologies for industrial energy efficiency and productivity

 

The United Nations Industrial Development Organisation (UNIDO) works with companies in developing economies to implement energy management systems in line with ISO 50001. Data from nine of these companies reveals that on top of savings resulting from the implementation of efficiency projects, they achieved additional “energy management system unique” savings, linked to improvements in staff awareness of energy efficiency; energy management capability; daily routine operations; and staff accountability. Following the implementation of an energy management system in these nine companies, projects were implemented that led to electricity savings of over 26 GWh. However, there were also an additional 8 GWh of “energy management system unique” savings, which accounted for between 1% and 19% of total electricity use in the companies analysed and 12% to 80% of the total savings (Figure 3).

Figure 3. Comparison of project and energy management enabled savings

omdustry3

Source: UNIDO (personal communication 21 June 2018).

Quantifying multiple benefits

While translating non-energy benefits into strategic and financial outcomes may be challenging, some companies have been able to do so successfully.

A Swiss surface treatment company, for example, was able to improve dramatically the business case for an energy efficiency project by factoring in non-energy benefits. When project planners considered only energy savings of a project to optimise the performance of rectifiers, they calculated a simple payback of 6 years. However, when the planners considered financial outcomes derived from non-energy benefits – such as lower maintenance costs, reduced cooling water use and other operational improvements – the simple payback plummeted to less than 1 year.[2]



[1] Adapted from IEA (2017), Energy Efficiency Indicators (database), www.iea.org/statistics/topics/energyefficiency/.

[2]Cooremans C., Eco’Diagnostic, Monney L., Greenwatt, Canton of Vaud Energy audit program, Presentation of 31 May 2016. www.vd.ch/fileadmin/user_upload/themes/environnement/energie/fichiers_pdf/EE_centre_de_profit_201606.pdf.

More about energy efficiency at the IEA