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Energy Efficiency Where to Begin? Identify Part 1

Overview

In the previous article of the Energy Efficiency Where to Begin series. I identified the 50,000 foot view of energy management and the overarching themes of an effective energy management program. In this article we begin to take a detailed look at an effective energy management system.

What would you think if your home builder decided your house didn’t need a foundation and that he was just going to “wing it”? I have a strong suspicion that you would not be living , at least not willingly, in that house. Yet every week companies throughout the globe decide to “wing it” with energy management program.

Here’s how it begins, Bob understands HVAC and operations, maybe he is the Director of Facilities, maybe he is an analyst, heck maybe he is in procurement. Well someone in the board room mentions how their utility rate at home went up and they wonder what kind of impact that would have on their business. A bunch of blank stares fill the room, no one has the answer, so what happens? Naturally stuff rolls downhill and Bob becomes the defacto “energy manager”

Now Bob means well, but he simply doesn’t have the tools to manage the energy of his company so two years later the company hasn’t worked out a guaranteed rate structure, they have no grasp on when they use energy so they can’t work within their rate structure, and they have no way of evaluating or reporting progress. Is Bob unique, well ask yourself how many Bob’s have you met?

What Bob needs is a plan, in my earlier article I discussed the three steps of energy management. Today we are going to help, today we will layout the process to create a strong foundation. This foundation begins by identifying four key factors.

  1. Identify Outcomes
  2. Identify Stakeholders
  3. Identify Metrics
  4. Identify Data Sources

Identify Outcomes

Stephen Covey said “begin with the end in mind”. Well I say begin with the outcome in mind, and that is the first point of our four pronged approach. As an energy professional you must identify the outcomes desired by your organization. There are so many methods you can use for this and at the risk of deluging you in information I will lay out the three core methods you can use for identifying outcomes.

  1. Business Needs- Layout your revenue, operational spend, and risks how can you impact each?
    1. Understand your business and your current needs
    2. Do you need to drive down operational costs? Do you have environmental compliance issues?
    3. Do you need to engage your clients, tenants, customers, ect?
  2. Survey-Use an online form, paper form, survey monkey, team meetings, ect.
    1. Survey your executive team, can you free up cash-flow for your CFO?, can you optimize data center utilization to save power and reduce heat for your CTO?, can you work to guarantee a rate structure thus reducing your operational spend for your COO?
    2. Discuss with internal and external stakeholders what you can do to manage energy.
    3. Evaluate your existing systems list them out (bill entry, metering systems, energy policies, past audits, ect).
  3. Work with a consultant Hire an Expert to Establish the initial focus
    1. Ensure your consultant has been in the field and has a multi-faceted skill-set.
    2. Don’t rule out the small companies.
    3. Don’t let go of control, make sure the survey is around your objectives.

Identify Stakeholders

If your following the plan so far you should have a list of any and all processes/programs around energy that exist in your business. Next you should have a list of the outcomes the different business units and stakeholders are trying to achieve. Finally, you should have a list of prioritized focus points from which to develop your plan.

Now you need to shift your focus on how you communicate this information to your stakeholders. In some cases the stakeholder could simply be yourself, in other cases you may have both internal and external needs. For example, let’s say you work at a major Pharmaceutical company, if I were to layout a list of stakeholders it may look like this.

  • CEO- Overall Shareholder Value
  • COO- Operational efficiency, production of product, maintenance of assets
  • CFO- Cash-flow and financial management, utility bill management.
  • CSO (Chief Sustainability Officer) Sustainability, EPA compliance, Carbon Reporting, Global Initiatives
  • Consumers- Reliable Products, High Quality Products
  • External Stakeholders- Regional/Local Environmental impact

Now you can literally sit down and say what are the top three things for a CFO to care about.

  1. Reduce Operational Spend
  2. Maintain Assets, avoid unpredictable expenses
  3. Guarantee low risk, optimal cost rate guarantees.


Conclusion

I am going to cut this one a little short because I still have so much to write in this article. Part 2 will continue to cover Identify and will provide knowledge around how to:

  • Identify Metrics
  • Identify Data Sources

I look forward to your comments and how this methodology aligns with your energy management planning.

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