Global competition has never been stronger in the glass sector, while product innovation, value added solutions, operational efficiencies and cost control are the key for glass manufacturers. However, glass production traditionally requires considerable energy, so the industry faces the ongoing challenge of managing the impact of rising energy costs. Against this background, one of the UK´s foremost glass manufacturers, Pilkington UK, has decided to work with Siemens to reduce such costs, improve operational efficiencies and support the drive towards a low-carbon and sustainable future. A central requirement was a customized investment funding solution to support the energy management projects and necessary investment strategies in this critical area without having to tap into existing cash reserves, impair day-to-day cash flow health or even resort to employing traditional bank funding.

The strategic partnership between Siemens and Pilkington is clearly highlighted by the industry-leading Energy Performance Contract and an innovative and tailored investment funding package put in place by Siemens Financial Services. This agreement works for all concerned, so the risk is shared. The principle is simple: Siemens Financial Services funds the initial capex required for the projects, which have typically three year payback periods in terms of generated energy savings. If the agreed energy performance enhancements are achieved or even exceeded, Pilkington pays a monthly charge equal to the savings reaped from its reduced energy consumption. Following a series of in-depth energy audits that the Siemens and Pilkington engineering teams had carried out, an initial list of ten energy management projects was identified. These projects included the installation of new drive technologies and automation controls at a Scottish production site, new pump system upgrades and a major program to install an intelligent lighting solution at one of the company´s prime warehousing locations. The crucial thing is that Pilkington did not have to make any up-front capex investment to benefit from these technical solutions, but pays for them once tangible savings are achieved over time. After the financing period, Pilkington continues to benefit from the energy cost reductions going forward. A good example is the investment of over 300,000 pounds made by Siemens at Pilkington´s Greengate warehouse facility to install intelligent lighting solutions. It is delivering over 120,000 pounds of energy savings per annum and such savings allow Pilkington to repay the initial investment after three years.