The energy crisis is affecting everyone, whether private individuals or industry. While it is relatively straightforward to save energy in a personal setting by turning off the heating or unplugging appliances instead of putting them in sleep mode, the industrial sector faces greater limitations. Buildings must be kept heated and processes must be maintained, as production cannot be simply interrupted.
The crisis and the resulting rise in energy prices are therefore presenting manufacturing companies with a whole range of new challenges. Successful energy management also depends on best software solutions.
In an already tight economy, rising energy prices are an enormous burden. At 45 percent, industry consumes almost half of Germany’s electricity. If trade, commerce, and services are taken together, the figure is as high as around 70 percent. This development is particularly problematic for medium-sized companies. According to a survey by the Federation of German Industries (Bundesverband der Deutschen Industrie e. V., BDI) 90 percent of medium-sized companies are facing major or even existential challenges.
Material shortages and supply bottlenecks
The BDI discovered that delivery difficulties and delays affected approximately three quarters (71%) of companies, with 6% considering it a crucial concern. As a result, enhancing supply chains and utilizing resources efficiently is gaining more significance.
According to current studies, in 2022, German industry as a whole made it through the crisis without any production losses. Production in the energy-intensive chemical, metal, and paper sectors declined by more than 10%, perpetuating a trend identified early on by the Federal Statistical Office (Statistisches Bundesamt). The office reported that “Since February 2022, production in energy-intensive industries has declined by 6.9 percent.” Economists are also expressing skepticism: “Obviously, the manufacture of many products is no longer profitable in view of the massive increase in energy prices,” Commerzbank expert Ralph Solveen told the Tagesschau, a development further underlined by the BDI. Nearly 10% of the surveyed companies have either reduced or halted production in Germany.
Overseas job relocation
Another consequence of these developments is the migration of German companies abroad. According to the BDI survey, almost one in four small and medium-sized companies is currently considering relocating parts of its production or business, in other words jobs, abroad.
Intelligent energy management through software or “Smart Energy” can aid industries in overcoming these challenges. Smart Energy encompasses the entire process of demand-driven energy generation, transmission, and distribution, with a focus on energy consumption and conservation. It prioritizes environmental sustainability and flexibility, alongside climate friendliness. The addition of “smart” refers to a whole range of factors:
By utilizing Smart Energy, companies can improve energy efficiency, conserve resources, and effectively utilize their own energy production. This enables them to act in a more environmentally conscious manner, while also making more informed and strategic decisions.
Device Insight has developed Smart Energy Solutions to support businesses and industries in optimizing their energy management in a comprehensive manner. Device Insight’s Smart Energy Solutions are a step ahead of traditional methods, offering cloud-based energy optimization software systems. For the first time, these solutions merge IoT data on machine and plant performance with energy consumption, generation, storage data, along with electricity prices and weather data. Utilizing optimization algorithms, the solutions evaluate all relevant data and correlations to provide recommendations. The outcome can range from improved use of a single battery storage unit to a more efficient overall energy management approach, potentially leading to a cost reduction of up to 30%.
The Smart Energy Management framework consists of a combination of Device Insights’ own IoT components, optimizer services and cloud platform services. The software systems can either be utilized as is or integrated through standard interfaces. A preliminary pilot can be launched within a timeframe of two weeks.
For more information on energy management with IoT software, see our Smart Energy Solution paper.