This project has been assisted by the New South Wales Government through its Energy Efficiency Training Program Prepared by Energy Efficiency through Product & Process Design Prepared by Plastics Industry Manufacturers of Australia (PIMA) in partnership with Australian Management Academy (AMA); executed in collaboration with EcoProducts

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Energy Efficiency through Product & Process Design Module 3 – Energy Efficient Manufacturing 3 © Australian Management Academy & Eco Products Agency

Key Points 1.Plastics processing is energy intensive 2.Energy is a major cost for plastics processors 3.The cost of energy is rapidly increasing 4.There are opportunities for energy saving 5.Major energy saving opportunities are ‘locked- in’ at the design stage 4 © Australian Management Academy & Eco Products Agency

What is Energy Efficiency? 1.Thermodynamics definition –work output per unit of energy input 2.Economics definition –energy cost per $ value added 3.Manufacturing definition –energy used per unit of production 5 © Australian Management Academy & Eco Products Agency

Plastics Processing & Energy Plastics processing is energy intensive Processing Compoundi ng Packaging Transport Processing Compoundi ng Packaging Transport Drying Heating Moulding Cooling Grind scrap Drying Heating Moulding Cooling Grind scrap Trimming Painting Welding Assembly Packaging Trimming Painting Welding Assembly Packaging Energy Inputs: Product 6 Plastic Manufacturing Primary Processing Secondary Processing © Australian Management Academy & Eco Products Agency

Energy is a Major Cost 7 Business costs for a large plastics manufacturer (example) © Australian Management Academy & Eco Products Agency

Energy is a Major Cost Energy costs for plastics processors are typically 3% – 6% of sales revenue Similar to profit margins Reducing energy costs, without sacrificing quality and productivity, increases profits Energy is a variable cost 8 © Australian Management Academy & Eco Products Agency

Electricity Cost Trend Electricity costs are increasing due to: Need for higher investment in transmission & distribution networks Increases in generation costs Likely increases due to a future carbon price What are you paying for electricity? 9 © Australian Management Academy & Eco Products Agency

Electricity Cost Trend 10 Annual electricity costs for typical plastics processing businesses © Australian Management Academy & Eco Products Agency

Electricity Cost Trend 11 Annual electricity costs for typical plastics processing businesses with CPRS © Australian Management Academy & Eco Products Agency

Energy Saving There are three opportunity areas for energy saving: Product Design Process Design Process Optimization Design product to meet: Customer needs Specifications Marketing requirements Design product to meet: Customer needs Specifications Marketing requirements Design process to: Make the product Meet quality standards Minimum energy use Design process to: Make the product Meet quality standards Minimum energy use Optimize process: Increase productivity Reduce wasted energy Reduce scrap Optimize process: Increase productivity Reduce wasted energy Reduce scrap 12 © Australian Management Academy & Eco Products Agency

Process Optimization Applies to existing products and processes –Energy management –Adjusting process conditions –Maintenance Typically provides 10-20% energy savings 13 © Australian Management Academy & Eco Products Agency

Process Optimization Energy Cost $100 15% $85 Product Design Process Design Process Optimization Process Optimization 15% saving 14 © Australian Management Academy & Eco Products Agency

Process Design More energy savings can be obtained by process design for existing products –Investment in energy efficient equipment –Improvement of existing equipment –Automation Capable of providing 10-30% energy savings 15 © Australian Management Academy & Eco Products Agency

Process Design Energy Cost $100 28% $72 Process Optimization 15% saving Process Design 15% saving TOTAL (cumulative) 28% saving Product Design Process Design Process Optimization 16 © Australian Management Academy & Eco Products Agency

Product Design More opportunities are available at the product design stage –Selection of materials –Weight reduction –Design for energy efficient processes Hard to predict, but 5-50% energy savings are possible 17 © Australian Management Academy & Eco Products Agency

Total Energy Saving Energy Cost $100 49% $51 Process Optimization 15% saving Process Design 15% saving Product Design 30% saving TOTAL (cumulative) 49% saving Product Design Process Design Process Optimization 18 © Australian Management Academy & Eco Products Agency

Most of these potential savings are ‘locked in’ at the design stage Total Energy Saving 19 82% Process Design (21%) Process Optimization (18%) Product Design (61%) © Australian Management Academy & Eco Products Agency

Summary Plastics processing is energy intensive Energy is a major cost for plastics processors The cost of energy is rapidly increasing There are 3 opportunity areas for energy saving: –product design, process design, process optimization Major energy saving opportunities are locked in at the design stage 20 © Australian Management Academy & Eco Products Agency