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Using energy efficiency to secure competitiveness

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The less energy consumed, the better for companies. This also applies to renewable energy sources.

German industry, whether SMEs or large corporations, is facing the challenge of rising energy prices and higher CO2 taxation. There is a clear will for change in the industry, and many companies have recognized that climate protection is an investment in future competitiveness. Politicians are supporting this change through legal requirements such as the Energy Efficiency Act (EnEfG). It is now crucial to act quickly and decisively. 

As one of the world's largest emitters of greenhouse gases, Germany must take effective measures to combat global warming. The industry has understood this mandate: In the last ten years, investment in climate protection has risen by 74%, as reported by the Federal Statistical Office. A large proportion of this investment, around 49% in 2021, will go towards renewable energies. Legal requirements such as the Energy Efficiency Act, the Ordinance on Securing the Energy Supply via Measures Effective in the Medium Term (EnSiMimaV) and the Building Energy Act (GEG) are driving decarbonization. However, in order to remain competitive in the long term, companies need to think ahead. 

The Energy Efficiency Act has a particularly strong impact on German industry. In 2021, their energy requirements accounted for more than a quarter of total consumption, according to the Federal Statistical Office. Companies with an annual energy consumption of more than 2.5 gigawatt hours must develop and publish plans to reduce their consumption. Large consumers with an annual consumption of more than 7.5 gigawatt hours are recorded in a register. These requirements make sense, but are not enough from an economic point of view. The manufacturing industry in particular needs more far-reaching measures. 

Energy-intensive sectors such as the chemical and metal industries as well as paper, glass, ceramics and mineral oil processing companies are struggling with rising energy prices. According to the Federal Statistical Office, these sectors consumed around 77% of the energy used in industry in 2021. Added to this are higher CO2 taxes and the operation of outdated, inefficient technologies, which cause costs. To reduce these costs, companies need to increase their level of self-sufficiency. It is not enough to simply reduce energy consumption and greenhouse gas (GHG) emissions; the goal must be GHG neutrality. 

Investing to remain competitive 

In view of future crisis situations such as the coronavirus pandemic or political conflicts, extremely volatile price developments in the energy sector are to be expected. One thing is clear: the less energy is consumed, the better it is for companies. But how can decarbonization be achieved? It is important to take a holistic view of systems in order to identify energy consumption and optimization potential. The aim of such an analysis must be a roadmap that shows today what investments are necessary to be competitive and self-sufficient in the future and to reduce greenhouse gas emissions economically. 

Such a roadmap begins with transparency of all consumption. This is complex in the industrial sector, where reliability must be guaranteed in various areas and heating and cooling consumption occur simultaneously. Energy generation must be adapted if, for example, overall consumption is reduced by modernizing the building envelope. 

Holistic approach to decarbonization 

To take this holistic approach to a decarbonization project, plant operators need the support of experienced engineers who can take all relevant factors into account. A proven approach is based on three principles: 

  1. only systems that can be measured can be improved. 
  1. the best kilowatt hour is the one that is not consumed 
  1. all unavoidable consumption must be largely covered by renewable energy sources. 

An energy management system for the central recording and evaluation of energy flows is necessary in order to establish measurability. The resulting data enables the determination of energy and cost flows. Electricity, heat, water or gas consumption is displayed transparently in an energy flow diagram, and costs and CO2 emissions are assigned to each consumer. 

Subsidies as support 

The analysis of the current situation is followed by the development and prioritization of technological measures for sustainable GHG reduction, which are set out in a decarbonization roadmap. A profitability analysis ensures planning security, whereby federal and state subsidies can increase profitability. However, serious concepts do not plan firmly with these funds, as a funding freeze must not jeopardize the entire strategy. Measures must be worthwhile even without subsidies. 

Be a pioneer or be left behind 

The industrial transformation towards climate-friendly operations may seem costly at first glance, but it is necessary for future viability. Companies that continue to rely on fossil fuels will be confronted with rising costs and falling margins. In the future, mandatory reporting of the GHG balance could become necessary. Transparency about consumption must be established anyway. 

Industrial companies should see increasing their level of self-sufficiency as an opportunity. Sensible and targeted investments will pay off, similar to the acquisition of new production facilities. The current opportunity to set out on the path to GHG neutrality with subsidies should be seized. Those who act now will become pioneers; those who hesitate risk being left behind.