Last week marked the completion of the world's largest automation trade fair, Hannover Messe. True to its reputation for dealing with broader and high-impact themes related to industrial automation, Hannover this year placed great emphasis on the current hot topics of energy efficiency, productivity and sustainability, reports consultancy Frost & Sullivan
With customers facing shrinking capex and decreased profit margins, the timing could not be better for industry to focus on energy efficiency. Thorsten Herdan, Managing Director of the VDMA energy forum, observed: "For some time now, developments in mechanical and plant engineering have been largely governed by efficiency-related considerations. In today's mechanical and plant engineering sector, we are already seeing about EUR 80 billion of the overall sales of EUR 160 billion being allocated to measures for increasing efficiency."
End users are looking for ways of efficient means of production at lower costs and effectively utilising existing assets. The demand clearly is for reliable solutions that can improve productivity while offering maximum possible energy efficiency.
At the individual components level, motors, drives, pumps etc. have the potential to not only save energy, but also limit CO2 emissions. For instance, motor-driven applications in Europe consume 65-70 per cent of total industrial energy usage. Energy efficiency, in these applications, could be improved by using high-efficiency motors, variable speed drives, soft starters and regenerative components. An ideal situation would be to have them all integrated and enable a greater energy saving potential.
An integrated approach
According to Jens Michael Wegmann, CEO of Siemens Industry, Industry Solutions, an integrated approach to this challenge would enable even greater sustained success for customers. He says: "Consideration of all forms of energy and energy-related processes — heat, compressed air, steam, maintenance, production, greenhouse gas emissions, management awareness, subsidies etc. — would result in a sustainable reduction of energy costs.''
There is evidence of success where Siemens Industry Solutions achieved energy savings for customers across different industries such as wastewater treatment, pulp and paper etc. in the range of 70-78 per cent.
Furthermore, a strong industry expertise and vast presence across end user verticals have enabled the automation giants to synergize innovation with experience and offer sector-specific energy efficient solutions. Klaus Helmrich, CEO of Siemens Industry, Drives Technologies, says: "The company's philosophy of Totally Integrated Automation (TIA), which is driven jointly by the Industrial Automation (IA) and Drives Technology (DT) portfolio, enables us to have a successful structured approach in offering customers productivity increasing and energy efficient solutions."
Also driving the automation market will be the rising demand from renewable energy as well as water and wastewater markets. Wind power as well solar power markets are increasing investments into automation and it would be interesting to see how soon automation penetration level will increase in these markets.
Electric vehicle developments
Water markets, too, offers a steady demand due to infrastructure activities across Europe, especially in Eastern Europe. The rapid developments in electric vehicles space is also expected to offer broader scope for industrial automation vendors due to a possible increase in demand for electric motors and drives and other automation equipment.
Overall, services are expected to offer high growth prospects with end users trying to achieve maximum asset utilization. Apart from maintenance services, consulting services too are likely to gain prominence due to energy efficiency and productivity measures from end users. Many automation vendors have adopted the main automation contractor (MAC) approach in order to demonstrate their service capability and maximize business prospects.
With delay in project commencements and diminishing hardware revenues, the automation vendors may well have to re-align their business structure in order to capitalize on the available opportunities offered by the services segment.
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