Building on the belief that industry wants to improve its energy performance

Lee Min-hyung provides a good article in The Korea Times about LSIS, a major Korean manufacturer of electrical equipment, being confident that it can provide energy efficiency technologies and services to an industrial sector that is increasingly pushing for greater energy performance.

 

LSIS bets big on energy-saving systems for industries

LSIS, the nation’s top-tier manufacturer of electrical equipment, is betting that corporations are hungry for highly-improved energy-saving systems for factory management.

The LS Group’s key cash-cow has turned out a string of “smart grid” hits at a time when governments and firms are shifting to energy-effective solutions amid initiatives to cut carbon emissions.

Now, LSIS is confident it can meet the industry trend by promoting its latest achievements that it refers to as “Factory Energy Management System” or FEMS.

“We are expecting a 25 percent reduction in energy use with GridSol Station, LSIS’s patented FEMS,” Kwon Yong-jik, the company’s marketing team manager, said during an organized tour of its manufacturing facilities in Cheongju, North Chungcheong Province, last week.

FEMS is gaining steady momentum because the alternatives to replace traditional legacy energy-controlling systems amid moves by governments to invest more into greener projects so they can cut carbon emissions.

The management system uses renewable energy to manage energy supply and consumption in factories.

All the energy management processes can be tracked in real-time at the company’s central energy management center. It shows how much energy each factory has generated from sunlight and how much energy it has saved by means of its energy storage system (ESS).

FEMS are cost-effective and may help companies cut their costs in energy consumption. LSIS said it expects to save some 100 million won ($84,500) every year by incorporating the ESS into FEMS.

The company invested 6.7 billion won to build the FEMS facility in the Cheongju factory since November. The GridSol is expected to achieve a one billion won reduction of energy use each year.

The system uses smart approaches to maximizing energy efficiency from visualizing wasted energy to sharing data by using information and communication technologies (ICT).

To develop the GridSol, the company has converged its key energy management systems including the ESS, energy management system (EMS) and solar energy generation technology, which are regarded as building blocks for the smart grid. It will take only eight years to recover its investments on the GridSol, said the company.

“We have spent more than half of the investment costs on setting up solar panels on roofs of our Cheongju factories,” he said. “The solar power system is expected to generate some 700 million won in profits each year. We are selling all the electricity generated by the solar power system.”

The global FEMS market was about 1.3 trillion won in 2013, and is expected to double in size by 2020, growing 10.3 percent every year, according to a U.S.-based market researcher Navigant Research.

Local FEMS market will grow at a faster pace from 209.6 billion won in 2013 to 1.1 trillion won in 2020, an average annual growth rate of 28.4 percent, said the Ministry of Trade, Industry and Energy.

From FEMS to BEMS, HEMS

LSIS said its energy management system is not limited to factories.

“Developed countries, such as the U.S., Germany and Japan, are starting to adopt energy management solutions not just factories, but in buildings, department stores and even houses,” he said. “LSIS is also on track to apply the GridSol into mid- and large-sized buildings to realize energy management systems (BEMS).”

Those countries are ahead of Korea in terms of energy management technologies.

For example, U.S.-based tech giants, including General Electric (GE) and International Business Machines (IBM), are early movers to embrace the FEMS market, taking the lead in building smart analytic tools to monitor the energy usage of buildings.

Japanese IT giants, such as Toshiba and Hitachi, are also tapping into the FEMS business as their next-generation growth engines.

“The U.S. market has already adopted the ESS for family use, and Japan will even liberalize its retail energy market next year, which means each household can buy and sell electricity freely,” he said.

LSIS said it would seek to broaden its energy solutions to catch up with the global trend.

“We are investing in BEMS and home energy management system (HEMS) to shift our focus from energy supply management systems to energy demand management processes.”

As part of its efforts to achieve the goal, the company’s key affiliates, including LS Cable and LS-Nikko Copper, started using the GridSol system.

“We are also seeking partnerships with Chinese companies in Shenzhen to expand our FEMS business globally,” he said.

The company’s strong drive for FEMS is because energy use at industrial sites and buildings takes up the biggest portion in the country’s energy consumption.

In 2013, some 62 percent of energy consumption was from industrial use, followed by buildings with 21 percent, the company said, citing data from the Korea Energy Economics Institute.

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