Manufacturing Energy Solutions

Commercial Energy for Manufacturing

Manufacturing facilities are among the largest industrial consumers of electricity and natural gas, using it for process heating, steam generation, space conditioning, and as a feedstock. In deregulated markets, manufacturers have significant leverage to negotiate competitive rates and optimize their energy procurement strategy.

With the right approach, manufacturing operations can reduce electricity and natural gas costs by 15-30% without impacting production.

Electricity & Natural Gas: Dual Energy Strategy

Most manufacturing operations use both electricity and natural gas to power their facilities. Understanding how to optimize both commodities is essential for comprehensive cost management:

Electricity Usage

• Lighting and HVAC systems
• Electric motors and equipment
• Refrigeration and cooling
• Office equipment and computers
• Backup power systems

Natural Gas Usage

• Process heating and steam generation
• Space heating systems
• Hot water heating
• Cooking equipment
• Emergency generators

By managing both energy commodities strategically through competitive procurement in deregulated markets, businesses can reduce overall energy costs by 15-30%.

How Manufacturers Use Commercial Energy

Commercial energy serves multiple critical functions in manufacturing:

Process Heating

Direct-fired heating is essential for many manufacturing processes:

• Metal heat treating and forging
• Glass and ceramics production
• Food processing and cooking
• Chemical reactions requiring heat
• Drying and curing operations

Steam Generation

Industrial boilers produce steam for:

• Process heating applications
• Sterilization and cleaning
• Power generation (cogeneration)
• HVAC and humidity control
• Chemical processes

Space Heating

Large manufacturing facilities require substantial heating:

• Production floor conditioning
• Warehouse and storage areas
• Office and administrative spaces
• Loading dock and entry points

Feedstock Applications

Commercial energy as a raw material:

• Chemical and petrochemical production
• Fertilizer manufacturing
• Hydrogen production
• Plastics and polymers

Typical Manufacturing Gas Usage

Application	% of Total	Variability
Process Heating	40-60%	Production-driven
Steam Generation	20-35%	Production + seasonal
Space Heating	10-25%	Weather-driven
Feedstock	0-20%	Production-driven

Cost Reduction Strategies for Manufacturers

1. Industrial Rate Optimization

Manufacturers often qualify for special rate classifications:

Interruptible Service

Lower rates in exchange for curtailment during supply constraints:

• Typical savings: 10-20% off firm rates
• Requires backup fuel capability (typically propane or fuel oil)
• Best for facilities that can curtail without major impact
• Some utilities offer multiple curtailment tiers

Large Volume Rates

Higher consumption unlocks better pricing:

• Dedicated rate schedules for industrial customers
• Lower per-therm delivery charges
• Reduced demand charges at scale
• Potential for direct connect arrangements

2. Competitive Supply Procurement

In deregulated markets, separate your supply from delivery:

Fixed-Price Contracts

Lock in commodity costs for budget certainty:

• 12-36 month terms typical
• Protects against market volatility
• Essential for competitive bidding and pricing

Index-Based Pricing

Pay market prices plus a margin:

• Benefit from market downturns
• More price exposure/risk
• Good for sophisticated buyers monitoring markets

Structured Products

Combine approaches for optimal risk/reward:

• Block and index structures
• Swing and tolerance provisions
• Seasonal pricing differentiation
• Heat rate products for cogeneration

3. Demand Management

Reduce peak demand to lower costs:

Load Shifting

Move gas-intensive operations to off-peak periods:

• Night shift energy-intensive processes
• Weekend operations during low-demand periods
• Seasonal production scheduling

Demand Response

Participate in curtailment programs for credits:

• Utility demand response programs
• PJM/MISO capacity programs
• Emergency curtailment payments

4. Process Efficiency

Reduce consumption without reducing output:

Heat Recovery

Capture waste heat for productive use:

• Economizers on boiler stacks
• Regenerative burners
• Heat exchangers on process exhaust
• Cogeneration systems

Combustion Optimization

Maximize fuel efficiency:

• Optimal air-fuel ratios
• Oxygen trim controls
• Regular burner maintenance
• Variable frequency drives on combustion air

Insulation and Maintenance

Prevent energy waste:

• Steam trap maintenance
• Pipe and vessel insulation
• Door seals and weatherization
• Compressed air leak repair

Manufacturing-Specific Considerations

Production Variability

Manufacturing gas usage often correlates with production volume:

Ramp-Up and Ramp-Down

• Contract flexibility for changing volumes
• Swing provisions for production variability
• Take-or-pay considerations
• Seasonal adjustment clauses

Multi-Shift Operations

• 24/7 facilities have different load profiles
• Shift scheduling impacts peak demand
• Maintenance windows affect usage patterns

Multi-Facility Operations

Companies with multiple manufacturing sites can:

• Aggregate volume across facilities
• Coordinate contract timing
• Share curtailment capacity
• Standardize procurement processes

Regulatory Considerations

Manufacturing may face additional requirements:

• Air quality permits for combustion equipment
• Emissions reporting and compliance
• Energy efficiency standards
• Renewable portfolio considerations

Industries We Also Serve

Manufacturing companies often have related operations:

• Warehouse Commercial Energy Solutions - Distribution facilities
• Office Building Commercial Energy Solutions - Corporate headquarters
• Restaurant Commercial Energy Solutions - On-site cafeterias

Get Your Free Manufacturing Energy Analysis

Commercial Energy Advisors specializes in industrial energy procurement. Our services include:

1. Load Profile Analysis: Review your consumption patterns and demand characteristics
2. Rate Class Evaluation: Ensure you're on optimal rate schedules
3. Market Assessment: Evaluate current conditions and supplier options
4. RFP Management: Obtain competitive bids from qualified suppliers
5. Contract Negotiation: Secure favorable terms and pricing structures
6. Ongoing Optimization: Monitor markets and manage renewals

No cost to your facility—suppliers compensate us directly.

Whether you operate a single production facility or manage a portfolio of manufacturing plants across multiple states, Commercial Energy Advisors can help you reduce energy costs while maintaining the reliability your operations require.

Contact us today for your complimentary industrial energy analysis.