Towards cost-effective energy management
Energy management to reduce energy costs can have a significant effect on a company’s profitability, but not if the cost of managing energy exceeds the savings — as Dirk Den Haese of Elster EnergyICT explains.
Energy management is a well established concept, but a growing number of companies with large energy-hungry multi-site estates are looking to go to the next level by systematically managing their energy usage with a long-term energy-management strategy. The cost of lighting, refrigeration and HVAC services is significant for any commercial operation, and reducing energy consumption and have an immediate effect on operating profits.
Cost reduction is the main objective of any energy-management initiative, and to reduce costs you need to reduce energy usage. However, this objective takes more than simply being disciplined about turning off the lights. A more focused approach calls for additional data collection and management, which also means much greater effort. The danger is that the increased cost in operational efforts could threaten the savings achieved by reducing energy consumption.
The goal, therefore, is to exploit the opportunity to measure and collect data across an organisation but also to optimise the cost and effort of managing costs, such as collecting meter data, maintaining the meter assets and efficiently running the process of analysis. This is important as while adopting a structured long-term energy-management strategy can potentially reduce a business’s energy costs by as much as 30%, the process of energy saving can create an operational overhead which must be managed and controlled.
Saving energy is like sticking to a new year’s resolution — difficult, but not impossible. As demonstrated by businesses that have successfully achieved fundamental and long-lasting change to their approach to energy, important cost reductions can be achieved.
One well-known supermarket has realised £2 million a year in savings by introducing Elster EnergyICT’s Enacto energy-management system to generate automated energy alarms. The solution reduces operational effort by automatically alerting managers to exceptions in energy consumption that require action.
The energy-management system is also integrated with facilities management and operation-and-maintenance teams to ensure that energy exceptions are relevant. This also ensures that exceptions are acted upon fast so that savings are achieved quickly. Ultimately, each initiative flows to the bottom line and improves the profit margin.
Sometimes energy exceptions or actions are postponed when resources or priorities allow. However, considering that the cost of unnecessary lighting in a typical large store can exceed £100 a day and that an average wait time for a solution is about 13 weeks, delayed action can cost more than £8000 on one lighting circuit alone.
When installing an energy-management system, which typically comprises metering hardware and a suite of software applications, it is important to recognise that the software alone cannot create savings. Energy managers should resolve to implement structured observation, analysis, and evaluation to confirm that savings have been achieved. The most important aspect is data presentation, as this affects how other team members can access, understand, and take action on the data. They should also be able to communicate data analysis across the entire organisation via multiple platforms such as smart phones, tablets, and PCs. This ensures that all employees are engaging with the energy-management system.
It is also essential to appreciate that the meters themselves will require on-going maintenance by engineers. Baselines must be created and maintained, otherwise energy exceptions and benchmarks become meaningless. Although these activities require effort and cost, the fact is that with careful control of energy management operations, cost can be managed effectively to avoid undermining energy savings.
To ensure a structured approach to energy management that can pre-emptively reduce future operational costs, there are three key areas to consider.
• Energy visibility identifies in-depth where and how energy is being used across a business, with sub-meters and other inputs supplying more detailed energy-consumption information.
• Meaningful actions translate energy analytics into achievable actions on the most important energy exceptions and ensure energy-saving initiatives are kept on track
• People engagement addresses the challenges of maintaining savings, and ensures the entire organisation is engaged to minimise energy savings drift.
All these activities hinge on having a simple and accessible system from multiple platforms to visualise and analyse a business’s energy output. Crucially, the system should automate the handling of energy exceptions to cope with the large volume of data and reduce the associated level of effort and operational cost.
The strategy is labour-intensive initially, but the faster you resolve and implement an action, the more quickly you will see results and begin to save money.
Dirk Den Haese is global director for energy-management solutions with with Elster EnergyICT.
