Process and control today | Optimizing Energy Through Smart Finance Could Save Manufacturing Industry Billions

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  • Manufacturers face regulatory and shareholder pressures to reduce carbon emissions and optimize their energy use.
  • New research from Siemens Financial Services (SFS) models the financial impact that energy optimization strategies could bring to the manufacturing community in the global manufacturing community.
  • Smart finance solutions can enable investments that deliver predefined energy optimization outcomes and secure operating cost reductions without having to invest upfront capital.

Siemens Financial Services (SFS) has released a new analytical study that estimates the cost savings that implementing energy optimization could bring to manufacturers in China ($ 115.2 billion), Europe (40, $ 3 billion), the United States ($ 26.2 billion) and India ($ 22.6 billion) over a five-year period.

Part of a series of insights, “Financing of decarbonisation: manufacturing ” examines the many pressures – shareholder, environmental and regulatory – that manufacturers face to reduce their carbon emissions, improve energy efficiency and lower operating costs. As the current economic climate has prompted greater caution about capital spending, research is exploring how investing in results through smart finance solutions can make investing sustainable and affordable..

Working with specialist suppliers and financiers who focus on getting results, research reveals that manufacturers are approaching energy optimization through two key strategies:

  • A global optimization strategy that helps to sustain energy supply, reduce consumption costs, reduce exposure to unpredictable cost increases, drive carbon emissions reductions, create new revenue streams and deliver financial benefits short term.
  • Incremental investment steps where typical steps include: combined heat and power generation; low power consumption variable speed drives; energy recovery production line; membrane filtration, anaerobic waste treatment; efficient switchgear for transmission; virtualization of the digital twin; and energy efficient construction technologies.

For large-scale projects, deals known as Energy Optimization as a Service – typically provided by specialist private financiers – can provide budget neutral funding. On a smaller scale, smart finance arrangements (typically based on asset finance structures) help organizations acquire energy efficient solutions without having to deploy retained capital or overburden their banking facilities. They can often enable the acquisition of higher specification solutions that deliver greater energy optimization benefits faster – a greater contribution to the overall competitive advantage.

Mark McLoughlin, Siemens Industries and Markets, Siemens Financial Services, UK: “Smart financing solutions and new business models can enable manufacturers to save costs and energy without putting capital at risk. Manufacturers need only ask themselves which energy solution best meets their goals.

Methodology

The Siemens Financial Services methodology uses the lowest level of energy optimization savings recorded in its research base of real examples, even though these can reach 50% + in sectors with high energy consumption. In addition, the methodology only scales energy savings volumes over 50% of the available manufacturing fleet. This helps CFOs in the manufacturing sector to be confident that the estimates in this document are a reliable starting point for their business cases regarding the level of benefits to be achieved, and that the actual savings are likely to be significantly higher. . Estimates of energy optimization savings over a typical 5-year funding period are noted in the table – covering both the manufacturing sector as a whole, as well as a range of more energy-intensive sub-sectors. . In each case, Standard Industrial Classification (SIC) codes are used, so that readers can precisely define the manufacturing industry subsectors covered. These financial volumes effectively represent the magnitude of self-funded financing for energy optimization conversions that smart financiers and solution providers can help deploy the manufacturing industry.

For more information, please see: https://www.siemens.com/financing-decarbonization-manufacturing

For more information on SFS, please see: www.siemens.com/finance

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