How investing in energy conservation can save industry billions

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LAHORE: Energy efficiency is of critical importance not only for the textile industry but for the other sectors too and there are a lot of tools, modalities, practices, and innovative solutions that can help the manufacturers cushion the shocks of cost hikes and save a great deal on energy bills.

The concept of energy conservation in industries was first introduced over a decade back by Deutsche Gesellschaft für Technische Zusammenarbeit (GTZ), the former German technical cooperation agency. Howerver, 12 years on the private sector has made sporadic efforts to improve energy efficiency while constantly complaining of high cost. Studies conducted 12 years back by international experts revealed that an average spinning mill could save up to Rs3 million, a textile processing unit Rs29 million, and integrated textile units Rs15 million every year by applying energy efficiency measures.

Since the energy rates have almost doubled in the past decade the saving from energy efficiency measure will also increase correspondingly. Back in the day, the German development partner agent of GTZ and an energy expert from Asian Development Bank visited various spinning and processing mills of the country to evaluate their energy efficiency. They found out that these industries could cut their energy costs substantially if they adopt measures recommended by them. At that time the millers, sitting pretty in their comfortable zones, brushed the advice aside. They were reluctant to improve their energy efficiency because plugging the leakages and fixing the flaws had a cost and coughing up investment for that purpose was the last thing on their mind.

They were looking to the authorities to share the burden of this new investment. This carefree attitude cost them a fortune because at that time the investment required, in most of the cases, was very low compared to the savings. In most of the cases the mills could have recovered the total investment within four to six months from the monthly saving on electricity bills. The investment could still be recovered within the same amount of time but since most of the mills are operating at loss they are not in a position to make even small investments. A bad business decision and false homes of government’s chipping in part of the cost of efficiency improvement landed them in trouble. Economic experts were in fact surprised at the reluctance of millers to improve energy efficiency. The return of investment was very quick and the regular savings were too high to ignore improvement in energy consumption. The government after the initial findings of GTZ experts collaborated with them to initiate studies for the state of energy use in other industries as well. Those production units that heeded the advice of those experts have been able to absorb higher power rates and are continuing to survive the tough times. Those units include some mills in textile sector that are still in operation when 30 percent of their counterparts were forced to close down.

Over a decade back, the GTZ experts visited two processing units and discovered the annual energy loss of one unit was Rs29 million/year and in the second plant the inefficient use of energy contributed to Rs28 million in losses annually. In both cases the remedial measures recommended by GTZ experts involved an investment of Rs7 million and Rs9 million respectively. The processing plants were told that this investment would save each plant Rs27 million/year in electricity cost. The entire investment, if made, would have been recovered in three and four months respectively in shape of lower power bills. Similarly in the two integrated mills it was found that the energy losses were Rs9.2 million and Rs21 million. The mill incurring 9.2 million losses was advised to make an investment of Rs1.72 million recoverable in 18 months. The other mill was asked to invest Rs4.7 million for improving the efficiency. The investment was recoverable in 3.5 months. It was found that hardly 10 percent of the mills and processing units made the needful investments and is still operative.

The experts found flaws in electric distribution system, which resulted in system loses due to voltage imbalance, over or under voltage, low power factor, undersized conductors, leakage to ground and poor connections. Losses due to poor connections represented one-third of total losses. These flaws still exist not only in textile but in most of the other industrial sectors and need to be addressed. Oversized or improperly maintained transformers also result in energy wastage. The experts also detected that circuit breakers were not installed accordingly. They pointed out that undersized breakers cause energy losses. The GTZ experts also called attention to the fact that electric motors installed in machines consume more than 90 percent of the energy. They said machines in Pakistan have different types of motors. Some are received attached with the machines and some procured locally, which are of class III efficiency and consume more energy. Given the energy circumstances of Pakistan, these findings are still valid for the majority of industry. They are a loud and clear wake-up call from the past especially for those industrialists, who are on the verge of closure because of a rising cost of energy owing to their myopic vision. If they want to continue their operations and wish to grow then they must embrace these measures while they still can.