Energy Management in the Process Industries

Macquarie University cogeneration plant. Image courtesy: Macquarie University.

Compared with the 1970s, the 1980s proved to be a relatively stable period for world energy prices and in the process industries the drive for improved energy efficiency that was spurred by the oil crises of the previous decade was overtaken by an oil price fall.

Coincidentally, the 1980s were years of relatively strong economic growth and so the focus of management shifted to business priorities such as securing profits, improving product quality, reducing operating costs other than energy and, more recently, environmental protection.

The Australian process industries’ consumption of primary energy is about 1.1 million TJ per year at a cost of over $5 billion.  Overseas experience suggests that savings of at least 20%, worth over $1 billion per year, should be achievable using proven technology.


By early 1990 it was clear that energy efficiency had fallen further behind in Australia than it had in comparable sectors in USA and in Europe. Given that Australian processing industries were dominated by sectors in which energy represented a relatively large proportion of total operating costs, that relationship could not continue if international competitiveness was to be improved and sustained. Consumption of primary energy in the Australian process industries was about 1.1 million terajoules (TJ) a year at a cost of over $5 billion. Overseas experience suggested that savings of at least 20 percent, worth over $1billion a year, were achievable using proven methodology.

The objectives of this project were:

  • To determine the scope for energy savings in a representative sample of process industries;
  • To recommend appropriate initiatives to promote the implementation of energy efficient technology in those industries.

Bulwer Island cogeneration plant. Image courtesy: Origin Energy.


The project included a Steering Committee of twenty-nine members and seventeen Project Fellows in addition to Visiting Fellow Dr Greg Ashton. Their key activities were case studies and site energy surveys.

For the case studies, the project team carried out detailed evaluations on five process plants chosen because each offered some feature that was likely to lead to more widely applicable recommendations. The main aim of each case study was to evaluate existing energy management methodology, to determine the most appropriate improvements and to demonstrate how these improvements could be applied.


The project aimed to identify the most appropriate and cost effective policy initiatives that would help reduce process industry energy costs and greenhouse gas emissions. On that basis, its recommendations fell into three areas:


It recommended that a unit of this kind should be attached to an existing technology organisation, such as CSIRO or ANSTO. A priority action should be to demonstrate and promote basic energy management techniques based on ‘monitoring and targeting’ principles. An additional benefit of this initiative would be to encourage the development of energy consultancy businesses.


Source Opportunity Annual savings in TJ and $M
Improved operation and control Food and beverage and paper and clay 70,000 TJ worth $300 million a year
Retrofit of existing plants Pinch methodology could increase energy efficiency to give typical payback periods of two or three years 80,000 TJ worth $400 million a year
New plant designs Pinch methodology could be used to optimise the trade offetween capital investment and energy costs 80,000 TJ worth $400 million a year


Combined generation of useful heat and power canincrease the overall efficiency of fuel utilisation from about 35 percent in a commercial power station up toabout 80 percent in cogeneration 30,000 TJ worth $120 million per year



The project produced two favourable outcomes:

  • It influenced the approaches of both the federal and New South Wales governments (the latter eventually through the Sustainable Energy Development Authority [SEDA]) to energy management, including New South Wales state programs to encourage the adoption of small-scale cogeneration installations
  • It catalysed the first cogeneration support program to be operated by the Department of Energy and two subsequent programs by SEDA. Between them, these government programs supported the development of several new small-scale cogeneration plants through a period of relatively low electricity prices. SEDA’s Cogeneration Investment Program is ongoing and remains well supported by the electricity supply industry

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