John Cosgrove

Limerick Institute of Technology


Industry 4.0 as a driver for a real-time Key Performance Indicators (KPIs) for energy consumption in Manufacturing.


Significant savings are available in Manufacturing Plants where energy consumption is analysed correctly in relation to their driving factors (Production / Weather). The evolution of the Industry 4.0 Paradigm and the Internet of Things (IoT) is leading to the availability of data from the shop floor that can significantly change energy management approaches and drive savings of 20-30% of the energy consumed in factories. Suitable Key Performance Indicators (KPIs) are available at the Value Stream and Machine level that can provide comparison with Best Practice as well as target setting and monitoring. Irish Factories need to up their game to contribute to national targets and COP21 commitments.


  • Virtuous Circles of improved energy performance through engagement, awareness, measurement and metrics can deliver significant reductions in ecological impact from factories.
  • Industry should adopt better KPIs for energy management
  • Adding intelligence in production operations can drive energy savings.
  • Mandatory annual auditing and reporting should be enforced for large companies and supports developed for Industrial SMEs.


Results have shown that significant energy and cost savings are available to Manufacturing through low-cost changes in operations and behaviour. Savings of 10-20% can be shown where energy consumption has been managed as an intrinsic part of the Manufacturing process. Optimisation of technical Services has been shown to deliver energy savings of up to 50%. As the ‘First’ Fuel, Energy Efficiency is critical to reducing the waste of energy, in managing the time-of-use of energy and in reducing the ecological impact of factories. Only after the consumption of energy has been reduced as far as possible should alternatives such as Renewable Energy Systems or District Heating be considered.
Energy Management Systems, Lean Methodologies and Value Stream Mapping can clearly attribute the costs of energy consumption to the functions that control the means to reduce this consumption. The use of Specific Energy Consumption (SEC) indicators and Simple Payback Calculations are not acceptable measures of energy performance. Suitable Key Performance Indicators (KPIs) are available that link energy consumption with the driving factors of Production Volumes, Product Types and Weather and provide comparison with Best Practice as well as target setting and monitoring. Appropriate KPIs have been developed at the Factory, Value stream, Product and WorkCell Level linked to real-time measurements from the field and where insufficient metering is available, energy models have been shown to provide sufficient accuracy for energy management. Many reports have highlighted the non-energy benefits (NEBs) of energy efficiency measures with added-value of up to 2.5 times the energy savings.
In general, Irish Industry has failed to take meaningful steps to reduce the ecological impact of their operations and a significant cultural change is necessary to achieve the targets required. Business-as-usual has been the approach with some peripheral energy lighthouse projects to fly the ‘Green Flag’. Facilities and energy projects have been widely outsourced leaving a disconnect between the business and its ecological impacts.
Developments in Smart Factories, heralded under the Industry 4.0 banner, have the potential to radically change the global manufacturing paradigm with a significant risk to the competitiveness (and survival) of the slow adopters. Resources efficiency, energy efficiency and the circular economy are keywords of Industry 4.0 and the widescale adoption of Cyber-Physical and IoT systems will provide unprecedented information flows on factories and on their production processes. Business-as-usual approaches will be quickly surpassed in the new environment as new opportunities for Smarter and Planet–friendlier products will be driven by consumers and by legislation. Manufacturing facilities that lead the way in adopting Industry 4.0 will also deliver significantly reduced energy consumption and ecological impacts as they will be integrated into their core business.
For large Companies the barriers of ‘split’ incentives, alternative investment opportunities and short payback periods ensure that viable energy efficiency measures are routinely not implemented. Government Policy should require mandatory annual audits and public disclosure on Energy Use and Carbon Emissions, at both production and product level. In time, efficiency targets and supply chain reporting should be introduced and gradually tightened. Verified Energy Savings should attract tax credits in order to promote savings and Large Companies should be supported to engage in Energy Awareness activities (shared transport, cycle-to-work scheme, training) with their workforce as part of their Corporate Social Responsibility.
For Small to Medium Enterprises, the barriers of lack of knowledge, variable production operations, complex tariff structures and the low nett value of savings ensure that energy consumption and efficiency is not addressed at all. Government Policy should support free annual energy audits (with published summaries) of all SMEs with over 10 Employees along with financial supports (low-cost loans, credits) for viable energy efficiency measures.
For the required changes to be effective in line with COP21, Carbon Taxes on fossil fuels should be incrementally increased from now to 2030 with a rebate available to industries who demonstrate verified energy savings. In line with that, the Single Electricity Market (SEM) should be re-constituted with a greater emphasis on promoting the lowest carbon component of electricity generation, driving down the unit cost of electricity generated and promoting demand-side management. In addition, the restrictions on exporting electricity should be abolished in order to promote the development of Industrial symbiosis and the potential sharing of heat & electricity generating assets.

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