Investing in energy management and efficiency is quickly changing from a “nice to have” to a business essential in order to compete and run lean. Many organizations appoint someone as an energy champion or energy manager, and then assume this person will take care of the rest. But it's never that simple.
I wish I could say that energy management programs are typically successful, but many industry leaders don't know the basics and see poor results. I have seen it happen wrong more times than I can count.
Setting up an energy management program is more than appointing a person to take charge. But while it requires many steps, it’s not incredibly complex.
We've created this guide to share the essential steps to implementing an effective energy management program. After working with thousands of customers, we have many proof points of what works and doesn't. Follow these five steps to set your organization up for success:
1. Get the Right Team
Having a dedicated energy manager or energy champion is a great first step, but it takes a team to build an energy management program. If there isn’t a strong supporting team, the energy efforts and initiatives could give sub-optimal returns. At minimum, your team should include the following roles:
Executive Sponsor: This person approves needed investments and removes difficult roadblocks.
Energy Champion: He or she actively manages energy, reports on progress, creates and monitors energy policies, and ensures implementation of measures.
Energy Intelligence Software Power User: This data guru knows your software tools very well, performs analysis, runs reports, and assists the energy champion.
Extended Team: The more the merrier! Other teams—like procurement, engineering, planning, finance, operations, even HR—may need to be involved to ensure success.
2. Scope Out Exactly What Success Looks Like
Now that you have a team, resist the urge to start investigating ways to save cost immediately. Getting started without a good plan is one way to waste a lot of time and effort.
Lack of direction, not lack of time, is the problem. We all have twenty-four hour days.
When developing a plan, you should make sure to explicitly state the scope of your program and how you will track successes. What are your goals? What metrics and KPIs will be used for reporting? How you will acquire the appropriate tools and collect data? Who will meet and how often? What milestones will you set?
3. Get the Tools You Need
You need energy data in two forms: monthly bills and streaming real-time data through energy intelligence software (EIS). That data will allow you to accurately prioritize which problems to investigate first. And it’ll help you measure and verify results of projects after they are complete.
Without the feedback that EIS provides, you are wasting time and money.
4. Understand What's Driving Your Costs
Three are three primary cost drivers of energy: how you buy energy, how much you use, and when you use energy. Many energy management programs focus solely on reducing how much energy they use. Those programs are missing two-thirds of the picture, and while they may produce small successes, the savings potentials are actually far greater. Broadening a program's focus to also include the other two cost drivers of energy will serve to maximize returns.
For a quick example, if you reduce your consumption by starting up your facilities at later time (e.g. 8:00 a.m. versus 7:00 a.m.) to address how much energy you use, you may create a start-up spike that will result in a demand charge on your bill—a penalty for ignoring when you use energy—and eliminate all of your energy-reduction savings.
Additionally, your energy procurement strategy can significantly impact how much you pay.
Bottom line, managing all three cost drivers holistically is essential to maximizing your return.
5. Make Friends Across Your Organization
Let your organization know what you are doing. Praise the early successes of your energy management program and make sure your organization knows about the work of your energy management team.
When you broadcast your goals and successes, and let others know how they can help, you will undoubtedly see better results. Show them how your energy management program contributes to the bottom line of your organization and higher gross margin—successful energy management programs positively impact business outcomes.
If you do this well, members of your organization will be more engaged and active in energy management by doing things like turning off the lights, identifying areas for reduced waste, and supporting your projects and initiatives.
Successful energy management includes many facets, and lacking a solid plan is one of the best ways to ensure sub-optimal results. Take these tips and make your energy management program awesome!
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