Energy IQ: Why businesses need to unlock value with better energy management strategies

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Think your business couldn't benefit from having an energy management strategy? Think again. 

Most successful companies have a marketing, product or supply chain strategy, but there is one more important but often overlooked area to consider when wanting to maximize profit: An energy management strategy. Today, a well-planned energy management strategy can position a company to take advantage of the recent trends shaping the energy markets.

"The days of considering energy costs as a given is long gone for most businesses," said Gino Butera, Vice President of Power Generation at Cummins. "A combination of five macro trends ranging from digitization and de-carbonization to electrification and de-regulation has created opportunities for businesses to be more pro-active with their energy costs." 

Energy use intensity for commercial buildings
Commercial businesses with higher energy use intensity benefit the most from energy management strategies.

According to a 2019 Deloitte study, 88% of businesses have changed their view of energy procurement from simply a cost to the business to an opportunity to create value. Cummins has identified three benefits or values to be unlocked by an effective energy management strategy.

No. 1: Improving the company’s financials

Energy bills (electricity, heating and transportation fuel) are one of the major expenses for many businesses of any size. If you are simply paying the energy bills without seeking the opportunities to lower your bills, you might be leaving money on the table. 

When it comes to electricity and heating costs, there are opportunities ranging from demand response and demand charge management to combined heat and power for your business to lower costs. You can even create a competitive advantage for your business through an effective energy management strategy, depending upon your local cost of electricity. Hawaii's largest craft brewer has accomplished this and created its competitive edge with the ability to estimate the cost of electricity. 

An effective energy management strategy would integrate the latest technologies in intelligent controls and microgrids into your company’s infrastructure, enabling your business to take advantage of financial opportunities. 

No. 2: Protecting the core business from interruptions

Lives, money and reputation. In the case of certain healthcare facilities, interruptions in a business could have disastrous outcomes including putting lives at risk. Even in the least harmful case, an interruption caused by a power outage will still cost your business money in the form of lost business. Both instances could do irreversible damage to the company’s reputation.

Even the most reliable power grids are at risk to fail. For example, electricity customers in the U.S experienced an average of over seven hours without power due to outages in 2017. In some states such as Maine and Florida, customers experienced an average of over 30 hours without power due to outages during the same year. 

An effective energy management strategy would feature a diverse set of energy assets ranging from storage systems to emergency generators to minimize interruptions caused by power outages. A diversity of energy assets would increase the resiliency of your company’s energy infrastructure instead of relying solely on the grid. 

No. 3: Advancing the environmental sustainability efforts

Today, more businesses are not just talking about sustainability but are establishing environmental sustainability goals to keep themselves accountable. One might think this is a trend for large multinational corporations, but in fact increasing number of small businesses also have sustainability goals.  

A business’ environmental footprint gets impacted by a variety of factors ranging from how its facilities are built to how its products are disposed, yet the use of energy gets the spotlight due to its significant impact on overall environmental sustainability. 

Electricity goals for businesses
Most companies have goals to reduce carbon footprint, and use of electricity and natural gas. 

An effective energy management strategy introduces new energy assets that produce less harmful pollutants to displace high-carbon sources such as coal. These new assets, including renewables and storage technologies, help businesses improve preservation of air, water and soil. 

Whether it is improved financials, continuity to serve customers or reducing environmental impact, an effective energy management strategy has multi-faceted benefits for any business. Building an effective strategy requires a consideration of both the company’s future goals and current operating realities. Check out this article outlining how you can start building an effective energy management strategy for your business.  If you are ready to take your energy strategy to the next steps, you can simply get in touch with an expert from Cummins to partner with you

Sign up below for Energy IQ to periodically receive relevant insights and trends about energy management. To learn more about distributed generation solutions Cummins offers, visit our webpage

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References:

1 Deloitte Insights (2019). Deloitte Resources 2019 Study [PDF file]. Retrieved from https://www2.deloitte.com 
 

Aytek Yuksel - Cummins Inc

Aytek Yuksel

Aytek Yuksel is the Content Marketing Leader for Cummins Inc., with a focus on Power Systems markets. Aytek joined the Company in 2008. Since then, he has worked in several marketing roles and now brings you the learnings from our key markets ranging from industrial to residential markets. Aytek lives in Minneapolis, Minnesota with his wife and two kids.

Cummins Custompaks are being used for water management as Thailand struggles with its water crisis

CustomPak on site

Water crisis

Sixty Cummins Inc. CustomPaks are in service in Thailand as part of a critical water management plan aimed at easing the country’s water crisis – a crisis that has caused enormous economic and social damage and stirred conflict among communities.

Over the past several decades, Thailand has continually faced water problems caused by severe drought. Water reserves in dams and reservoirs are insufficient while water resources are often contaminated with toxins caused by urban communities and the industrial and agricultural sectors.

Severe flooding is a threat, too, at a time when the realities of climate change are hanging over the country.

As a result, the allocation of precious water resources, which must be shared among various stakeholders including new and existing industry, large and small agriculture, and cities and villages has become a flashpoint.

Kittithanapat Engineering Co. (KTP), has been involved in the water management system since 1996, working closely with authorities such as the Royal Irrigation Department, Department of Water Resources, Bangkok Metropolitan Authority and others.

CustomPaks on site

600 hp CustomPaks

To help KTP meet its often urgent requirements, Cummins DKSH (Thailand) has recently supplied 60 Australian-built CustomPaks – 45 powered by Cummins’ X15 engine rated at 600 hp, and 15 powered by the QSL9 rated at 325 hp. These fully self-contained powerpacks are emissions certified to Tier 3.

The CustomPaks are coupled to hydraulically-driven, large-volume submersible water pumps sourced by KTP from US company Moving Water Industries (MWI); KTP is the exclusive distributor in Thailand for these MWI Hydroflo pumps.

Prior to Cummins’ involvement, KTP was using another diesel engine brand but service support wasn’t up to the standard required.

Long-serving KTP engineer Kittisak Thanasoot says Cummins DKSH’s reputation for technical and aftersales support along with the reliability of the Cummins product were a key reason behind KTP’s decision to specify the CustomPaks for the Royal Irrigation Department.

The ability of Cummins DKSH to respond to short delivery times was also important.

“Supplying large quantities of high horsepower diesel engines for emergency situations such as flash flooding can be a challenge for KTP,” says Kittisak Thanasoot.

“Responding to the needs of the government agencies to manage such problems in a timely manner and with least impact on communities, KTP has found the answer in our partnership with Cummins DKSH.”

Power, pride and passion

Parked semi truck

The switch back to Cummins power has been beneficial for iconic New Zealand company Uhlenberg Haulage. It's all about whole-of-life costs.

Uhlenberg Haulage is closing in on 60 years in business, having been founded in 1966 by Mike and Carol Uhlenberg.

Based in Eltham, Taranaki, in New Zealand’s North Island, the operation is today owned and operated by their sons Chris, Daryl and Tony Uhlenberg.

Describing the Uhlenbergs as “old school family truckies”, Daryl talks about the company’s time-honored journey with a definite tone of pride, especially the work of his parents in laying the foundations for what is today an iconic fleet in its own right.

Cummins Inc. made its debut in the Uhlenberg fleet in 1971 with an NH250 powering a second-hand Kenworth K923 used in logging. A second Kenworth, a new W924 with a Cummins NTC335, followed soon after hauling an LPG tanker.

The Uhlenberg operation today comprises 40 prime movers and a variety of trailing gear to cater for the myriad of a jobs the fleet is involved in.

A number of Peterbilts feature in the fleet although Kenworth is now the brand of choice with six new units to be delivered over the next 12 months to cater for business growth.

Cummins’ X15 Euro 5 engine rated at 550 or 600 hp is the preferred power specification, with 18 red engines currently in the fleet.

Uhlenberg family in front of truck

Whole-of-life support

“The switch to Cummins has been a very good experience for us. We have nothing but praise for the Cummins organization,” says Daryl.

“The whole-of-life picture is the key thing for us and we’ve got that nailed with the support we get from Cummins – parts availability, scheduled maintenance, life expectancy and in-frame rebuilds.

“So the red engines turn up, we run them to life, which is 900,000 to 1.2 million kilometers, and then Cummins does an in-frame overhaul in a timely manner. If there’s an issue, parts and support are close by.

“The support we get from Cummins Palmerston North is fantastic, second to none.”

Daryl recently looked under a Kenworth that was in the workshop for a service and was surprised to see no oil leaking from the one-million-kilometer X15. “I remember when I was a fitter we had to wear a raincoat when working under a truck,” he jokes.

Fuel agnostic

Acknowledging that the push to decarbonize is now “very real”, Daryl likes the idea of Cummins’ fuel agnostic concept where one base internal combustion engine, optimized to run on diesel, can also be customized to run on ultra-low and zero-carbon fuels like renewable natural gas and hydrogen.

“My father was a pioneer of linehaul trucking in New Zealand and he always embraced new technology. He was never scared of it,” he says.

“I tend to be a little more cautious but I can see where a 500 hp natural gas or hydrogen engine would work for us in short haul applications,” he admits. “We’re certainly willing to look closely at these alternative fuel technologies when suitable infrastructure is in place.”

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