Electricity prices more than doubled in Australia between 2014 and 2019. Gas prices followed close behind with a 50% increase since 2011, according to recent reports.  

For Australian manufacturers, who account for 18% of Australia’s energy consumption, this is a huge problem.

The food manufacturing industry alone pays $706 million a year on electricity bills, which is 17% of the whole manufacturing industry’s energy expenditure. That means food manufacturers are second only to the mining industry as the biggest spenders on energy.

This rise in energy prices is here to stay. Australian manufacturers will start facing a hit to their bottom line unless they start taking steps, big and small, to optimise their energy consumption.

But rather than approaching energy as just a cost to be managed, optimising energy efficiency delivers huge opportunities to reduce risk, improve resilience, and create new value.

It’s not about replacing equipment, it’s about ensuring your plant is running as productively and efficiently as possible.

Here are 7 steps to optimise energy efficiency in manufacturing:

1. Check your lights

Think of lighting as the low-hanging fruit of energy savings. It sounds simple but switching off lights when they’re not needed is one of the most effective ways to save on energy. Think about how often employees go in and out of work areas during their shift, and how often lights stay on when the employee has moved elsewhere.

One solution is automated lighting systems. These systems can be configurated to adjust automatically based on the area’s occupancy or the level of daylight. Motion sensors also ensure the lights are switched off when the area is not in use.

Another strategy is to make the switch to LED bulbs. Compared to halogens, LED bulbs use about a quarter of the energy to produce the same light. They can also last up to ten times longer, meaning you are making savings in energy and consumables.

2. Shut off equipment when not in use

How often is equipment and machinery left on when not in use? By turning off machinery completely, you can make significant savings. This means using effective start up and shutdown procedures.

Compressed air alone accounts for 10% of industrial power usage in Australia, according to the Victorian Government’s Compressed Air System Guide. So, by turning off the machine, you are shutting off the air supply and making savings.

3. Adjust equipment settings to suit application

Is your equipment set up for energy efficiency? Some pieces of equipment may have a standardised setting that’s using more energy than necessary.

For example, a compressed air system often has a standardised pressure. But some processes require different levels of pressure depending on the function being carried out. Adjusting the equipment to suit processes is part of making sure your factory is running at its most efficient, while saving on energy costs.

Next, look at what hours of the day equipment is being used. Can this usage be minimised or moved to a different time of day based on tariffs?

4. Improve your OEE

Measuring your Overall Equipment Effectiveness (OEE) shows you the impact of production inefficiencies, including unplanned downtime, short stops and defective products.

It is a score that enables you to measure the performance of your production facilities, showing how efficiently your equipment and plant is running.

For energy efficiency, this is critical. Improved manufacturing efficiency has a substantial impact on energy consumption. Energy is used in processes, during downtime, changeovers and production. So, you need to use the data from your OEE calculations to focus improvement efforts in precisely the right place to improve equipment utilisation and drive the highest OEE. The more your OEE score improves, the more energy savings you can make.

5. Track energy in real-time

Can you easily see how much energy your facility is using? How about how much energy each individual machine or process is using? Despite being among the biggest cost areas, energy is rarely monitored and managed carefully by manufacturers.

Embedded energy monitoring can provide real-time production and energy utilisation data, enabling a proactive plan for energy reduction. For example, if you find that a system used 30 kW one day and 60 kW the next, you can dig deeper to find out why.

Implement a system that allows you to access energy data in real time, so you can ask and answer the right questions, and take action. If you can track which machines, processes and plants are using the most energy, you know exactly where to focus your optimisation efforts.

Click here to find out how Australian manufacturer of large ceramic tiles NCIA automated their gas monitoring to forecast usage and control costs.

6. Preventative maintenance

If your facility has a reactive approach to maintenance, you’re setting yourself up to pay more in energy costs and repairs. Equipment could be running inefficiently for a long time before a breakdown actually happens, meaning energy leaks will soon add up.  

Instead, make sure equipment is working to its maximum efficiency using preventative maintenance or predictive maintenance.

  • Preventative maintenance is where you proactively schedule maintenance tasks to stop breakdowns and faults from occurring.
  • Predictive maintenance goes a step further and draws on real-time and historic data from machines to predict when maintenance should be carried out.

With both strategies, maintenance time can be focused on optimising the performance and lifespan of your equipment, which translates to increased energy efficiencies and considerable savings.

7. Promote an energy efficient culture

Engage your employees in your energy efficiency strategy. Keep them informed about your goals and progress and give them KPIs to support these initiatives.

Another important step is to invite employees to contribute to your strategy. Your operators are on the frontline, working with the equipment every day. They are sure to have valuable insights and ideas about how your facility can be more energy efficient.


Improving your energy efficiency is now an essential part of keeping your manufacturing business competitive. The steps we recommend above for building a robust energy efficiency strategy are not revolutionary, but systematically applying them to manufacturing can dramatically reduce operational costs.

If you are interesting in learning how OFS can provide real-time data insights to improve your energy efficiency click here to contact us.