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According to the International Energy Agency (IEA)’s World Energy Outlook 2022, “The world is in the midst of the first truly global energy crisis, with impacts that will be felt for years to come” due to energy shortfalls and high prices of natural gas and coal—much related to Russia’s invasion of Ukraine. The Outlook further states that advanced economies/governments have committed well over $500 billion to protect consumers, but the key takeaway from IEA is clear: “Today’s energy shock is a reminder of the fragility and unsustainability of our current energy system.”
Greater energy efficiency is a key part of the solution—and not just at a federal level. With significant government policies and pledges to achieve a NetZero Economy by 2050, organizations large and small need to be thinking about energy management. What does this mean? KTL Senior Consultant and Certified Energy Manager (CEM) Coulter Wood answers a few questions to offer some insight.
What is energy management?
Energy management involves monitoring and controlling energy consumption across an organization to save energy and, subsequently, save money. Energy management should be part of the overall strategy of a company, with the ultimate objective of reducing the cost of energy (i.e., creating energy efficiencies) without impacting work processes or products.
The energy management process involves four key steps:
- Collect and analyze energy usage data. The more data—and the more detailed it is—the easier it is to identify energy waste within operations. Often, your local utility or energy provider is a good source for this type of data.
- Identify opportunities to improve energy efficiency and optimize energy usage. The easiest and most cost-effective energy-saving opportunities often require little capital investment.
- Implement energy optimization solutions. Gaining cross-functional support is key to realizing a return on investment.
- Track and monitor progress/results through an established “measurement and verification” process. Demonstrate results to garner additional support, adjust solutions, as needed, and repeat.
Why should companies be concerned with energy management?
Sound energy management practices can have many benefits to organizations:
- Reduce costs: The Carbon Trust estimates that most businesses can cut their energy costs by at least 10% (often by 20%) with simple actions that offer a quick return on investment. Operating more efficiently reduces energy consumption, which equates to significant savings on utility bills. This is particularly important as energy costs reach all-time highs.
- Reduce carbon emissions: The equation is simple: the less energy you use, the fewer carbon emissions you produce.
- Reduce risk: Organizations that consume significant amounts of energy are at greater risk of being impacted by energy price increases or supply shortages. When an organization can reduce its demand for energy, it also reduces the risks associated with an energy shortage. Having greater control over energy consumption creates resiliency against energy price fluctuations.
How does energy management relate to sustainability?
On a global level, energy consumption is the major contributor to climate change, making up nearly 60% of the world’s greenhouse gas (GHG) emissions. Consuming less energy, finding more energy efficient solutions, and/or using alternate renewable energy sources help to reduce energy consumption, reduce carbon emissions, reduce dependence on fossil fuels, and reduce the damage being done to the planet. This ties directly to sustainability goals, including carbon neutral incentives, and helps promote a strong environmental, social, and governance (ESG) image.
What about ISO 50001?
As part of the ISO family of management system standards, ISO 50001:2018 focuses on Energy Management Systems as a strategic tool to help organizations better manage their energy use and:
- Improve productivity.
- Reduce environmental impact.
- Enhance corporate reputation.
- Drive down costs.
- Improve competitiveness.
According to ISO, “ISO 50001 is designed to help organizations improve energy performance by making better use of its energy-intensive assets.” Like other ISO standards, ISO 50001 follows the plan-do-check-act (PDCA) process for continual improvement. This involves:
- Developing and implementing an energy policy.
- Setting achievable targets for energy use.
- Designing action plans to reach objectives (e.g., implementing energy-efficient technologies, reducing energy waste, improving current processes to cut energy costs).
- Measuring progress.
How do I get started?
Energy monitoring is a key first step in effective energy management, as it allows organizations to understand their energy consumption patterns and identify routine waste in the process. A basic initial action is to work with a CEM to review and analyze your utility bill (a 12-month history is ideal). This action alone can offer significant insights into how your organization consumes energy and what opportunities may exist for immediate savings.
Once you have a comprehensive understanding of how energy is being consumed, it becomes possible to identify inefficiencies and opportunities for improvement, whether related to behavior (e.g., asking employees to turn off lights every night), technology (e.g., implementing integrated building management systems), or process (e.g., increasing operations during off-peak hours).
KTL has experience reviewing utility bills and helping organizations of all sizes identify energy consumption patterns and energy efficiency solutions. Please contact us for assistance in meeting your energy, environmental, and sustainability objectives.