The increase in the price of electricity increases the viability of energy efficiency in industry

As of August 1, electricity rates increased by a sharp 8.6%, which will make the electricity bill more expensive for all electricity consumers in Israel. For the industrial sector, this is a particularly critical increase in price, certainly when it comes to production processes that consume a lot of electricity.

The data from the Electric Company for 2021 shows that the industrial sector used 14% of the total electricity consumption in Israel, with a monetary amount of NIS 2.287 billion. Each percent increase in the price means an addition of 22.87 million shekels to the electricity bill of the industrial sector in Israel, and in total – almost 200 million shekels per year.

However, this is not the end of the saga of price increases, as another significant increase in electricity prices is expected this winter. The new tariff that came into effect on August 1 actually costs only about half of the increase in electricity production inputs. These were mainly caused by the war in Ukraine and its effect on the increase in coal prices from about 200 dollars per ton to about 400 dollars per ton. Estimates say that the price of electricity will jump in six months by an additional 7 to 8 percent. If this indeed happens, then the industrial sector will pay in the first half of 2023 about NIS 400 million more compared to the electricity bill paid in the first half of 2022.

Contribute to the bottom line
However, the electricity price increases, the one that has already occurred and the one that will occur in the near future, increase the feasibility of carrying out energy efficiency projects in the industrial sector. For example, Amit Lang, CEO of Mekorot, told the national infrastructure panel at the Calcalist and Leumi national economic conference, which took place in July, that “it is true that the increase in the price of electricity affects water expenses – Mekorot is one of the largest consumers of electricity in the economy. But Mekorot knows how to deal with the increase in the price of electricity through energy efficiency and the implementation of new technologies. It is enough that we make an efficiency of a few percentages to cancel the increase in the price (of water, as a result of the increase in the price of electricity).”

Thus it turns out that energy efficiency contributes to the bottom line of the industrial organization, allows it to avoid raising the prices of its products, and in addition to gain important points in the global fight to reduce carbon emissions that occur in the electricity production process.

The obvious implication of the recent increase in electricity prices is that in 2022 one would have to be crazy not to embark on a thorough and orderly project of electricity consumption management. In particular, when the industrial sector is entitled to generous state grants designed to assist in the execution of these projects, and the return on investment is quick.

A technological solution for saving energy
Schneider Electric’s technological platform in the field of energy management and monitoring is called EcoStruxure Power. It regularly monitors energy and electricity systems in a wide range of factories and industrial facilities, and it can be adjusted according to the customer’s needs. The system makes it possible to reduce energy consumption by an average rate of up to 10%, reduces energy costs, improves the energy efficiency of the plant, and helps to deal with requirements related to sustainability and reducing carbon emissions.

In addition, Schneider Electric’s technological platform is compatible and approved for implementation according to the ISO 50001 energy management standard. The standard is suitable for companies and organizations that wish to reduce current operating expenses, optimize the utilization of energy sources, and manage energy consumption optimally.

Schneider Electric has the experience of dozens of smart building projects in Israel, among which you can find – hospitals, data centers, campuses, commercial buildings, office buildings, factories, hotels and more. As an international company, Schneider Electric also has a wide and rich experience of tens of thousands of buildings in which its technologies were applied and became smart, green and economical.

About Schneider Electric
Schneider Electric Corporation Israel (Schneider Electric) is active in over 100 countries. The corporation’s revenues are over 27 billion euros, and the number of employees worldwide is over 160,000. At the core of the company’s activity is the transition to digital in the areas of energy management and automation in industry, infrastructures, data centers, buildings and houses.

About 120 employees work in the Israeli branch of Schneider Electric, under the management of Philip Barmy. The company participates in the aspects of energy management in national projects, such as: the new international airport in Timna, the city of the Bahadim in the Negev, the solar field in Bashlim, and more.


Leave a Comment

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Recent News

Editor's Pick