Clear objectives and a cohesive energy efficiency strategy will deliver on carbon emission targets

Industry comment

Published: 24 September

Author: Alan O'Brien

Type: Industry comment

Year: 2008

Alan O’Brien, CEO, of Sabien Technology Group Plc, discusses the importance of implementing a company wide energy strategy and the vital role energy efficiency plays in its delivery.

Volatile energy prices and the increased focus on managing carbon emissions have resulted in senior management having to accelerate their plans of offsetting the impact both of these have on their companies. More often than not, it’s Facility and Energy Managers who are now being tasked with developing and executing a sustainable energy and carbon reduction strategy.

A successful energy and carbon strategy will require consensus and ownership from all areas of the business if it’s to deliver a positive business outcome. Behavioural changes and energy efficiency will deliver the majority of energy reduction targets, if properly managed, within a short period of time.

For a strategy to be successful, an action plan is needed which will track the cost, energy reduction performance and financial paybacks for each initiative that is put into place. The strategy and therefore the action plan should typically consist of 3 main areas of focus: Behavioural Solutions, Energy Efficiency solutions and Procurement.

Changing your company’s behaviour

Implementing behavioural solutions is a relatively simple and inexpensive initiative. The increased media focus on climate change has brought energy conservation to the forefront of people’s minds which will help underline and reinforce your message. There are typically 5 key strategic actions that can be put into place to effect behavioural changes across the company:

1. Put into place or support the company’s Environmental Team in delivering a company-wide environmental/sustainability awareness campaign.

2. Implement ongoing awareness events year on year to Facilities, Technical and Non-Technical teams and support them in ensuring buildings operate efficiently. It can be surprising what can be achieved by focussing on existing Building Management Systems.

3. Actively participate in all appropriate Business Property meetings that can influence the use of energy within the company’s properties (including Facilities Projects and Asset Management). This will provide awareness and focus in the areas where significant results can be achieved.

4. Implement awareness campaigns to raise the profile of energy use in general and communicate all energy management activities carried out across the group. Promoting the importance and successes of the company’s energy reduction strategy will create company-wide awareness of the company’s objectives and successes. Awareness campaigns can vary from web based campaigns to events.

5. Engage the supply chain to help identify energy saving opportunities through the use of such things as energy workshops, target setting and development of complementary energy saving strategies. Many of the UK’s blue chip organisations are analysing the entire supply chain’s energy use and carbon emissions.

Awareness of the key initiatives the company is delivering both internally and externally will elevate the importance of energy reduction, provide momentum and buy in across the company, and demonstrate the company’s commitment to reducing carbon emissions. This can deliver up to 5% reduction of the company’s energy target at a low cost.

Energy Efficiency can deliver up to 50% of your targets

Energy Efficiency will involve the greatest level of investment and focus. Reduction in energy consumption can be up to 50% of the energy reduction targets. Energy Efficiency can be comprehensive, including technology such as, lighting, heating/cooling controls, Building Management Systems (BMS) and insulation.

A starting point can be: 1) Identify areas of the business where the majority of energy is being consumed; then: 2) source and evaluate suitable technology to help reduce energy consumption in these areas. Consider the suppliers’ capabilities e.g. who are their existing clients? What is their technology’s track record for delivering energy savings and carbon reductions? Can they demonstrate a track record for project managing initiatives across large building portfolios? What is the typical payback period for their technology and does this qualify for our capital expenditure criteria?

At Sabien, our clients primarily look for payback and a proven capability and experience of delivering projects nationwide across entire building portfolios. One of our clients has over 3,200 buildings across the UK. Our ability to provide full project management and installation was one of the deciding factors in us securing repeat orders.

The strategic actions for Energy Efficiency are listed below and provide the key areas of focus.

1. Continue to push the boundaries and invest in technical solutions that have a positive impact on energy consumption throughout your portfolio. Utilise the investment budget effectively to maximise returns from such technologies.

2. Influence (through specification and engagement) the design of engineering services by consultants to ensure energy efficient solutions are included in all new and refurbishment projects and encourage the use of whole life value (WLV) in all design solutions. Spending the time at the design stage will pay dividends in the long run.

3. Educate key stakeholders within the business units to the benefits of energy saving solutions, particularly IT Groups. Encouraging employees to shut PC’s down and turn lights off in the evenings will deliver significant savings. Furthermore software can be installed which will identify if users are not using their PCs and put the PC into sleep mode, saving energy, but ensuring the machine is in the same state as when it was left.

4. Ensure the BEMs is fully optimised. Recent research states that up to 70% of Building Energy Management Systems are not operating at their optimum level, leading to 20% - 30% of building’s energy being wasted (source: EIBI March 2008 “Uncovered: a needless waste of energy”).

5. Implement an Automated Meter Reading initiative. This will enable accurate readings of all utility meters that, as well as providing key energy management MI (Management Information) will also enable suppliers to utilise the data for billing. This is probably the first point in any energy strategy. It will enable you to baseline the company’s energy use. Sub metering should also be considered to enable identification of high energy use.

6. Continually improve the quality and coverage of energy use Management Information (MI) through increased use of Automated Meter Reading (AMR). Implemented as part of the BEMS strategy this will enable a more accurate understanding of usage (compared to manual reading) and result in more effective procurement activity.

Energy procurement

The volatile utilities market places further focus on energy procurement. The option of purchasing renewable energy is seen as a relatively easy option and doesn’t involve using internal resource. However market analysts, Datamonitor, surveyed 3,500 of the UK’s biggest energy users wanting to buy 34 TWh of renewable energy nearly three times the 12.2 TWh of accredited renewable electricity produced in the UK. Buying renewable energy may not be an option for every organisation.

The primary focus of this strategy is around energy demand management. However, it is essential to support the Procurement/Purchasing Group in purchasing utilities at best cost:

1. The utilities market should be monitored on a continuous basis and business cases designed and presented to maximise the opportunity to buy at the best price

2. In line with Group policy (where appropriate), renewable electricity should be purchased from appropriate sources focusing on supplies from ‘new’ sources wherever possible

3. Continue to encourage the Procurement Group in utilising an approach of WLV in the purchase of components impacting on energy use within properties

The action plan will enable the business to record, measure and track the performance of each energy saving initiative year-on-year (possibly through a dynamic spreadsheet) which will also record the associated annual cost savings. However, to ensure a like-for-like comparison against the standard base year, normalisation of actual consumption should be carried out annually. Figure 1 attempts to illustrate the impacts of Behavioral solutions, Energy Efficiency solutions, and Procurement will have on delivering the energy and carbon targets.

It is clear from Figure 1 that the single biggest influence on achieving the energy saving targets is the ongoing investment in energy efficiency solutions.

Embed a culture of saving energy

All industry intelligence points towards a continued increase in energy costs and increases in absolute energy consumption over the next few years. Accepting these implications, there are also very strong Corporate Responsibility drivers to reducing energy consumption. The Government’s energy ‘white paper’ targets an extremely challenging reduction in CO2 emissions of 60% by 2050 and they expect 50% of it to be through improved energy efficiencies. The Carbon Reduction Commitment is being introduced in 2 years time with energy consumption being based this year for any organisation consuming more than 6,000,000 kWh of electricity a year. Targets will be set for these organisations and a league table of top and low performers will be published.

Commitment from top management to reducing energy consumption is essential and it is necessary to build on this by embedding a culture of energy saving throughout the company through raising awareness of energy efficiency. That said, realistically, the vast majority of the energy to be saved will be through specific energy saving initiatives and projects and to this end it is critical that the capital investment fund is maintained year-on-year.