Energy Benefits of Electronic Controls at Small and Medium Sized U.S. Manufacturers


  • “As a class of technology, control systems appear to offer U.S. SMEs energy, emissions, and economic benefits comparable to other available technologies, which suggests that they should be given full consideration in SME efficiency improvement and CO2 reduction initiatives. They offer a compelling example of the environmental benefits that can be realized through the application of ICT.”

Address correspondence to:
Eric Masanet, Ph.D.
Lawrence Berkeley National Laboratory
1 Cyclotron Road, Building 90R4000
Berkeley, California, USA 94720

Electronic control systems are essential to the operations of modern industrial plants. They can be applied to a wide range of equipment, with the basic goal of measuring, analyzing, communicating, and controlling process variables to maximize production benefits (such as process quality) and minimize production costs (such as materials and energy use). While their applications can vary greatly from plant to plant, most facilities use some form of electronic control to optimize the performance of core equipment such as motor, compressor, steam, combustion, and heating, ventilation, and air conditioning (HVAC) systems.

Control systems have long been recognized as an important strategy for improving plant energy efficiency, and they are increasingly being installed with this particular aim in mind. Thus, they can be seen as a prime example of an information and communication technology (ICT) application for environmental benefit.

Energy savings attributable to control systems in U.S. industrial plants have been widely documented, most notably through case studies and data compiled by the U.S. Department of Energy's Industrial Technologies Program1 and the U.S. Environmental Protection Agency's ENERGY STAR® for Industry Program2. Much of the available information focuses on control system applications at large industrial plants. This attention is warranted, given the significant energy savings that can be realized at such plants through even small efficiency improvements.

In contrast, this column focuses on the experience at small and medium sized U.S. manufacturers (hereafter referred to as small and medium enterprises, or “SMEs”). SMEs are an often overlooked—but equally important—component of the U.S. industrial sector. According to the U.S. Census Bureau (2010), as of 2007 over 290,000 plants were operated under the ownership of SMEs, and these accounted for around 90% of all U.S. industrial plants. While the energy use of a typical SME might be small compared to that of a large industrial plant, given their sheer numbers—and their economic importance to U.S. industry—energy efficiency improvements at SMEs are equally vital.

In support of this goal, the U.S. Department of Energy's Industrial Assessment Centers (IACs) have been providing energy and resource efficiency audits at SMEs around the United States since the early 1980s.3 Each audit identifies specific opportunities for energy efficiency improvements across major plant systems. The fuel savings, required capital investments, and cost savings associated with each recommendation are entered into a centralized database along with information describing plant energy use and operating characteristics. To date, over 14,500 audits have been conducted resulting in over 25,000 verified installations of energy efficiency improvements. As such, the IAC database provides a unique resource for assessing the historical benefits of energy efficient technologies at U.S. SMEs. The remainder of this column summarizes a few key insights drawn from the IAC database on the energy, emissions, and economic benefits associated with verified installations of control systems.

Control System Installations

Table 1 provides an overview of installation data from the IAC database that relate to the application of electronic control systems. To ensure consistency in data compiled across all audits, all IACs categorize efficiency recommendations using standardized assessment recommendation codes (ARCs). The ARCs most representative of control system applications are listed in Table 1 along with their formal definitions in the IAC database. These ARCs have been grouped into broad categories (e.g., combustion controls) for ease of interpretation. Also provided are brief notes on the electronic control system technologies that are most likely installed under each ARC in practice.

Table 1.  Summary of Industrial Assessment Center database installations analyzed
CategoryIAC ARCDefinitionInstallations analyzedPrimary fuel(s) savedNotes
Combustion controls2.1116

Improve combustion control capability
Analyze flue gas for proper air/fuel ratio

Natural gas and petroleum liquidsPractically all modern combustion control and flue gas analysis systems utilize logic-based solid-state controls and sensors, often coupled with computer interfaces
Motor system controls2.4141Use multiple speed motors or adjustable frequency drives for variable pump, blower and compressor loads281ElectricityAdjustable speed drives save energy and provide improved process control for fluctuating motor loads by dynamically matching motor speed to load requirements. Solid state variable frequency drives account for the majority of adjustable speed drives.
2.4143Use adjustable frequency drive to replace throttling system59  
2.4144Use adjustable frequency drive to replace mechanical drive46  
2.4224Upgrade controls on compressors162 Con0trols vary outputs of compressors based on demand requirements, through adjusting the speed of individual compressors and/or by automatically loading/unloading multiple compressors
Scheduling controls2.6231Utilize controls to operate equipment only when needed120Electricity and natural gasModern scheduling controls employ logic-based solid-state systems, which are often controlled by central computer systems
Building controls2.7135Install occupancy sensors799ElectricityPassive infrared and/or motion sensing occupancy controls are most common; both rely on solid-state hardware
2.7226Use computer programs to optimize HVAC performance13Electricity and natural gasApplies to both factory and office space in many industrial facilities; applications vary greatly based on building HVAC systems
All controls  1,972 All controls installations listed above
All other2.1–2.7All energy management recommendations21,750Electricity, natural gas, coal, petroleum liquids, woodAll installations in the IAC database except the controls installations listed above

The data in Table 1 are limited to verified installations over the period 1995–2010, given the high likelihood that installations in this time frame would be based on modern solid-state control systems as opposed to older technologies (e.g., manual, mechanical, or analog controls). The IAC database contains nearly 2,000 records of control system installations over this time period, which makes a robust data set for analysis. For context, installation data are considered for all other energy efficient technology installations in the database, to shed light on the performance of control systems compared to the wide range of other efficiency improvements made by U.S. SMEs.

Energy and Economic Benefits

So what can the IAC data tell us about the benefits of industrial control systems?Figure 1 provides a summary of key energy and economic performance data, organized by installation category. The figure summarizes the distributions of data on annual primary energy savings per installation (expressed in million British thermal units4[MMBTU]), and the simple payback period per installation. The median of each distribution is indicated with a solid horizontal line. The rectangular boxes indicate the 25th to 75th percentiles of each distribution (i.e., the middle 50%), and the lower and upper lines indicate the 10th and 90th percentiles, respectively.

Figure 1.

Energy and economic performance distributions by assessment recommendation code and installation category. The median of each distribution is indicated with a solid horizontal line. The rectangular boxes indicate the 25th to 75th percentiles of each distribution, and the upper and lower lines indicate the 10th and 90th percentiles, respectively. MMBtu = million British thermal units.

Clearly evident in the figure are the wide ranges of performance associated with each installation category. This is not surprising, given that the performance of control systems can vary widely between plants based on differences in equipment, process configurations, and energy use. Still, some broad conclusions can be drawn.

For instance, the median primary energy savings per installation is significantly higher (note the logarithmic scale) than the median for all other technology installations in the IAC database, for all but one control system type (ARC 2.7135: lighting controls). In particular, combustion, motor system, and HVAC controls have offered the highest median savings per installation, suggesting that these applications have been particularly fruitful targets for control systems.

The average annual primary energy savings per installation for all controls was around 1,500 MMBtu/year. For perspective, consider that this savings in energy is equivalent to upgrading 1,400 refrigerators to the most efficient models, or to replacing 2,150 incandescent with compact fluorescent lamps in the average U.S. home (U.S. EPA 2010). It is also equivalent to doubling the fuel economy of 20 average U.S. passenger vehicles (from around 25 mpg5 for a standard mid-sized auto to 50 mpg for an efficient hybrid). In other words, the average control system installation at a U.S. SME may result in energy savings that it would take tens to thousands of U.S. household technology installations to achieve.

The distributions of simple payback period shed light on the cost effectiveness of these control system installations. Simple payback is defined as the capital investment cost of an installation, divided by the annual energy cost savings it delivers. Although it is a coarse metric, it is often used as a preliminary screen of cost effectiveness at industrial plants. Most manufacturers favor quick payback opportunities (1 year or less), but many consider opportunities with simple payback periods of less than three years to be economically attractive.

Figure 1 suggests that the majority of control systems have been installed with short payback periods. Six of the nine ARC installations considered have median payback periods of less than one year, and the remaining three have median payback periods less than two years. Although the median payback period for control installations (0.7 years) is slightly higher than that for all other installations (0.4 years), the data suggest that as a class of energy efficient technology, control systems have clearly been a cost effective investment for U.S. SMEs and that their costs compare favorably to other technologies. These data should help dispel any misperceptions that since electronic control systems are inherently highly sophisticated technologies, that their costs are likely to be higher than other energy efficient technology options. Taken together, the control system installations considered here accounted for nearly $18 million in annual energy savings to U.S. SMEs (in nominal dollars), with an average of around $9,000 in annual energy savings per installation.

Greenhouse Gas Emissions Benefits

In addition to energy and cost benefits, control system applications can also lead to reductions in SME carbon dioxide (CO2) emissions. Using the IAC data, it is possible to estimate the CO2 savings associated with each installation by coupling CO2 emission factors with fuel and electricity savings (by state). Taken together, all control system installations considered here accounted for around 187 million kilograms (kg) of annual CO2 emission reduction, which is equivalent to the annual emissions of over 44,000 average U.S. passenger vehicles.

Given the growing pressures on manufacturers of all sizes to report and continuously reduce CO2 emissions, the climate change benefits of industrial control systems are likely to receive greater attention moving forward. In particular, their cost effectiveness as a CO2 emissions abatement technology may be of particular interest as SMEs seek out low-cost ways of reducing emissions. Figure 2 sheds light on this issue by plotting out the median annual CO2 emissions savings per installation against, the median CO2 emissions abatement cost per installation. Clearly, the best position on the plot is one of high CO2 savings at low abatement cost (i.e., the graph's lower right quarter). Median abatement costs are expressed in 2009 dollars. Abatement costs were estimated by multiplying the capital investment for each installation by a capital recovery factor (CRF) (Meier et al. 1983), and dividing by the installation's annual CO2 emissions savings. A CRF of 0.15 was assumed in Figure 2, based on an assumed technology lifetime of 10 years and a discount rate of 8%. For context, Figure 2 also presents results for maintenance measures and equipment upgrade measures from the IAC database, which could also be applied to the same base equipment as the considered control systems.

Figure 2.

Median carbon dioxide (CO2) emissions reductions and abatement costs. Mg = megagram.

Considering that the average emission trading prices for CO2 has varied between $10 and $30 per mega gram (Mg)6 in recent years, the data in Figure 2 suggest that most of the control system installations would be attractive from an abatement cost perspective. They also compare quite well with all other technologies in the IAC database. Only three of motor system control ARC installations appear to exhibit unattractively high abatement costs. However, given that these are electrical efficiency measures, and that the CO2 emissions intensity of electricity generation can vary widely by state, it was observed that there were many such installations with abatement costs in the $10 range in states with high grid CO2 intensities.

It is interesting to compare the results for control systems to those of the maintenance and upgrade measures aimed at the same base equipment. Not surprisingly, the abatement costs for maintenance measures were quite low, and the CO2 reductions were significant. These results reinforce the notion that strategic equipment repair and maintenance can reap big efficiency rewards at low cost. However, it is interesting to note that many of the considered control system installations led to similar CO2 savings at similarly low abatement costs. It can also be seen that, in general, installation of control systems led to similar (or greater) CO2 savings, and at similar abatement cost, when compared to measures aimed at upgrading base equipment to more efficient models. In an ideal world, an SME would pursue all available cost effective efficiency measures. However, given the cost constraints that many SMEs face, it is interesting to note that control systems can offer a financially attractive alternative to reducing CO2 emissions if equipment upgrades are not possible.


The IAC data suggest that electronic control systems at U.S. SMEs have delivered significant energy and CO2 reduction benefits at reasonable levels of cost investment. As a class of technology, control systems appear to offer U.S. SMEs energy, emissions, and economic benefits comparable to other available technologies, which suggests that they should be given full consideration in SME efficiency improvement and CO2 reduction initiatives. They offer a compelling example of the environmental benefits that can be realized through the application of ICT.


  • 1

    See Save Energy Now: Energy Assessments

  • 2

    See ENERGY STAR for Industry Program: Industrial energy management information center.

  • 3

    Industrial assessment center database

  • 4

    One British Thermal Unit (BTU) ≈ 1,055.1 joules (j) ≈ .2522 kilocalories.

  • 5

    The term mpg is an abbreviation for miles per gallon. It is a unit of measurement that measures how many miles a vehicle can travel on one gallon of fuel. One mile (mi) ≈1.61 kilometers (km); one gallon (gal) ≈ 3.79 liters (L). Thus, 1 mpg ≈ 0.42 km/L.

  • 6

    One megagram (Mg) = 1 tonne (t) = 103 kilograms (kg, SI) ≈ 1.1 short tons.

About the Authors

Eric Masanet is Acting Deputy Leader of the International Energy Studies Group at Lawrence Berkeley National Laboratory, Berkeley, USA, Research Engineer in the Institute of Transportation Studies at the University of California, Berkeley, and Manager of the UC Berkeley Graduate Engineering and Business for Sustainability (EBS) Certificate Program.