Mari Tuomaala

Challenges in Energy Efficiency Performance Measurement in the Process Industry

Purpose – The accounting literature has demonstrated increased concern over issues of sustainability. One of the most critical issues that corporations face at the moment is climate change. This especially concerns companies that are substantial consumers of materials and energy. Corporations have increasingly acknowledged that to address this issue the existing ways of managing business must be changed. This study examines the challenges posed by measurement of energy efficiency performance in an energy-intensive industry. It covers the challenges encountered with respect to the energy efficiency indicator and its use as a management tool. Methodology – The case study method was used to conduct the research, which took place in a single firm in an energy-intensive process industry. Findings – The results indicate that the current energy efficiency indicator, specific energy consumption (SEC), does not meet the criteria for good performance measurement. In particular, the controllability of energy efficiency seems problematic. Another major challenge is target setting. Measurable targets are needed to identify and prioritise areas where consumption and emission can be reduced. Practical implications – The study provides practical knowledge on what is happening in organisations that pursue sustainable development and in particular, environmental efficiency. Originality/value – Although the conceptual challenges in energy efficiency measurement are well known in the technical literature, discussions dealing with its management have been few in number. This study is a cross-disciplinary work and combines technical energy efficiency literature and management accounting research on performance management.

General approach to connect business and engineering decisions

Abstract The connection of engineering and business decisions to include sustainability criteria (such as safety, health and environment; SHE) in engineering evaluations is discussed in the paper. The practice how SHE aspects are considered depends on the companys approach to value environmental issues. In the highest level of involvement the SHE criteria are seen as a competitive advantage and optimized together with (or as) economic factors

Investment Evaluation of an Integrated Steel Mill using Multiple Criteria

A conventional steel manufacturing process generates considerable amounts of reject streams and secondary raw material. These streams are either recycled back to the process or treated as waste. Recycling affects negatively on the production yield and on the controllability of unit operations. Waste represents considerable cost unless utilized in another production process as raw material. In these streams, there exists a potential to use the chemical elements more effectively. Therefore, it might be interesting to find an economical technical solution to collect the streams and increase steel production. Investments on process equipment are typically evaluated using conventional economic figures, like payback time, Net Present Value (NPV) etc. The problem with these practices is, that they consider only numerical aspects. Non-numerical and non-economical criteria are hard to cater to the evaluation. Still, they may affect on the investment profitability in the long run. Such criteria include environmental friendliness or the aspects of process integration. The article presents a comparison of a conventional steel manufacturing process with one reject stream processing alternative. A target in the process modification is to optimize the use of material and energy within the site. The comparison is based on a balanced set of criteria that affect on the efficiency of an investment. The use of these criteria is a part of the new methodology that has been developed to evaluate investments on integrated process sites. In addition to the criteria, the complete methodology includes: 1) connection of company’s strategic issues into technical design and decision making, 2) optimization of the process and calculation of process potentials (differences in the performance values between the existing process and the modified process) through the use of process integration methodologies and 3) use of decision-making aids. The research is a part of Finnish National Technology Program, “Process-Integration 2000–2004”.