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Strategic Approach to Energy Management
Green Sustainable Enterprise
|Ankur Thareja, CMVP, CEA, IGBC-AP
Wipro Eco Energy
Republished From LinkedIn
Whenever we talk about Energy Management or for that matter any industry, each industry participant has his own set of definitions and perspectives. For Example, OEMs focus more on retrofits and upgrades; an IT service provider will talk about Big Data/ Analytics; Sustainability and Group Energy Managers will show a belief in tools such as EnergCap for Benchmarking and tracking and ISO 50001; and Green Building professionals will focus on passive architectural design options such as orientation, construction materials etc.
Energy Management in today’s world is interpreted by professionals in accordance with their own environment, experience, and need. According to me, the term is beyond products and tools, and more of a discipline which leads us to formulate our goals and vision related to Energy/Green/Sustainability. The term “Energy Management” needs to break its silos and include people, processes, and tools to deliver a continuous process (integral to day to day operations as part of the vision) rather than a onetime action such as retrofit, installation of tools, being certified once and eventually losing track, etc.
Steps to Strategic Energy Management:
The bigger question now is How to implement these Energy Management programs? EnergyStar mentions following steps to Strategic Energy Management (Ref: http://www.energystar.gov/buildings/tools-and-resources/energy-star-guidelines-energy-management)
STEP 1: Make Commitment
STEP 2: Assess Performance
STEP 3: Set Goals
STEP 4: Create Action Plan
STEP 5: Implement Action Plan
STEP 6: Evaluate Progress
STEP 7: Recognize Achievements
Commitment for an energy management program is given by the senior management (such as Energy Director reporting directly to the CEO). This provides the necessary impetus to the project. However steps 2, 3, and 4 of Strategic Energy Management is normally overlooked by organizations. Nevertheless there is a need to assess the current performance and then set goals; create action plan to understand current capabilities, plan for development of in-house capabilities or outsourcing of execution. Due to ambiguity and lack of planning resulting from skipping steps the organizations tend to set unrealistic expectations from the program such as ROI of 1-2 years, or 30% savings in the next 5-10 years. This leads to a failure in achieving the full potential of a “Green Sustainable Enterprise” by diluting some aspects of the program such as:
For a successful “Energy Management Program”, clearer vision and expectations from the program is mandatory. From my perspective creating a successful Energy Management program is more of an economic, financial and political challenge, and less of an engineering accomplishment. There is a need to transform the market outlook focused on ROI, project finance (Economic and Financial challenge), and a way to bring multiple technical and non-technical stakeholders on the same page (political challenge). Engineering challenges are always present in some form however the availability of technology and tools provide us with the power to perform way beyond our current capabilities.
Overcoming Political Challenges:
Therefore to overcome Political Challenge, in addition to the Energy Director who leads the team and possible dedicated energy staff, consider including a representative from each operational area that significantly affects energy use, such as:
Institute Corporate wide Energy Policy, involving key people in policy development to ensure buy-in. Energy Policy should be
Overcoming Economical and Financial Challenges:
Step 2 and 3 of EnergyStar plan can be used to overcome Economical challenge. First and foremost for that is enterprise need to evaluate its current state and performance. Some of the activities that need to be performed are
Once we know current state of facilities, energy and asset challenges, and performance, it’s time to Set Goals, that would help to
Once Evaluation and Goals are set, it is clear what we can expect from these Energy Management program (i.e. can we base them on ROI only or they are essential for Business Continuity also). This will eliminate unrealistic Economic challenges
which sometime gives a perception that project is not viable based on
internal/corporate IIR (Internal Rate of Return) or ROI policy. Though
program/activity may be viable based on O&M (Operation &
Maintenance) savings, R&R (Repair & Replacement Cost). Ref: FEMP Guide for saving http://energy.gov/sites/prod/files/2013/10/f3/practguide_sav_paymnts.pdf
Normally, it is very important to understand “Color of Money” while calculating economic benefits and viability of project. This is how Economic challenge can be mitigated.
Once we are aware of project economic
scenario and “Color of money” it is very easy to make decision whether
to go for Internal Financing or External Financing, else ESCO
methodology. This helps mitigating Financial Challenge for Energy Management projects.
Once we are aware of project economic scenario and “Color of money” it is very easy to make decision whether to go for Internal Financing or external Financing, else ESCO methodology. This helps mitigating Financial Challenge for energy Management projects.
Engineering accomplishments require two steps. First, last step of planning for i.e. Creating Action Plan, which requires corporates to plan based on insights while working on mitigation plan for Economic and financing Challenges
Second step of engineering accomplishment is easy, this requires finalization of Eco-System consisting of tools, vendors, and stakeholders with defined roles and responsibilities.
As per Verdantix Report on “GREEN QUADRANT BUILDING ENERGY MANAGEMENT SOFTWARE MARCH 2014” (Ref http://old.caba.org/documents/IS/IS-2014-171.pdf) since 1990 corporate Energy Management is aimed at Tactical solutions aimed at individual sites which includes retrofits, up gradation of BMS (HVAC and Lighting controls). 2011 onwards with the Market consolidation as building asset management meets portfolio-wide energy management. There are many companies such as Enova, First Fuel, Retro Efficiency, EnergCap, Hara, Skyspark, Schneider, Wipro EcoEnergy, BuildingIQ, Energy ICT, EnorNOC, Verisae, Envizi, Skyspark, etc. who have their own strengths like EnerNOC a leader in Demand Management, EnergyCap has leadership in utility bill & greenhouse gas tracking, analysis, reporting, auditing, benchmarking, Hara is Big Data Analysis tool, Envizi has best Workflow And Reporting Capabilities, etc..
Start with small pilots/demos with multiple vendors and products to evaluate their local delivery capabilities and openness to work in multi-vendor environment and data sharing capabilities. This will help understanding synergies and overlapping capabilities of tools and Vendors. Finally, come-up with RFP for Strategic partnership based on Goals and operating methodology (RACI) as last step to achieving engineering excellence.
Though, it’s not completely true that existing tools and technologies will cater to 100% engineering excellence. Sometimes integrating data from multiple sources and making multiple tools work together creates some issues. Once issues are identified, solutions can be provided. It is normally more difficult to find issues, rather than finding solutions. Also issues which are beyond technology, haven't been addressed by process excellence.
Sustenance and Re-Assess Results:
This step puts the last touches to the “Energy Management Program” before Goals are re-assessed and cycle starts again for improving the effectiveness of program.
During this step 5, 6, and 7 of EnergyStar program are considered.
Regular evaluation of energy performance and the effectiveness of energy management initiatives allow teams to:
This is done by comparing energy performance to baselines (i.e. Step 2 Assess Performance and Step 3 Set Goals)
Sustenance phase review i.e. Re-Assess involves:
The views presented in this article are personal views of the authors
and in no way represent those of the company they work for or any
industry body they are associated with.
About the Author:
Ankur Thareja is a Senior Consultant – Energy Solutions at Wipro EcoEnergy with a career span of almost 13 years focusing on delivering solutions for energy and controls. His areas of expertise include Integrated Building Management Systems, Energy Management Solutions, Remote Monitoring, Performance Contracting, and Intelligent/Smart Buildings.
He is Certified Energy Auditor (CEA) from Bureau of Energy Efficiency (BEE), Certified Measurement and Verification Professional (CMVP) by Efficiency Valuation Organization (EVO) and an Accredited Professional from Indian Green Building Congress (IGBC).
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