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Energy Management
Driving Operational & Financial Performance
Don MacdonaldSustainability & Energy Program Director
http://www.linkedin.com/pub/don-macdonald-leed-ap-rabqsa/0/595/715/
Market Adoption Indicators2014 certifications
ISO 9001ROI benchmarks 9-13%
ISO 14001ROI Benchmarks 7-12%
ISO 50001• Published ROI Data Suggests 6.5-17%
range expected within 1-2 yrs.
• Performance metrics (self-defined) incorporated
• Web-based & continuous performance tools
• Measured benchmarking
• Integrated with ISO 9001, 14001, & SEP, CSR
RiskMgmtQuality
Environ & GHG Mgmt
Energy Mgmt
LEED
CSR
Multi-Nationals Adopting ISO 50001 - > 4000 to Date
• 3M• Coca-Cola• Alcoa• Allsteel - HON• Amcor PET• Bentley Prince Street• Cook Composites• Sikorsky• OLAM Spices• MedImmune• Cummins• Ingersoll Rand
ISO 50001• CNH / Fiat• Schneider• Siemens• ABB
• 3M• Coca-Cola• Alcoa• Allsteel - HON• Amcor PET• Bentley Prince Street• Cook Composites• Sikorsky• OLAM Spices• MedImmune• Cummins• Ingersoll Rand
ISO 50001• CNH / Fiat• Schneider• Siemens• ABB
• Didion Milling, Inc
• Dow Chemical
• Eaton
• General Dynamics
• Free scale Semi
• Haynes International
• Holcim
• Lockheed Martin
• Cooper Tire
• Republic Conduit
• Bridgestone Tire
• Didion Milling, Inc
• Dow Chemical
• Eaton
• General Dynamics
• Free scale Semi
• Haynes International
• Holcim
• Lockheed Martin
• Cooper Tire
• Republic Conduit
• Bridgestone Tire
• Kenworth Trucks
• Neenah Foundry
Company
• Nissan
• Owens Corning
• Schneider Electric
• Spirax Sarco
• Traco
• Volvo
• World Kitchen
• Harbec
• United States Mint
• Kenworth Trucks
• Neenah Foundry
Company
• Nissan
• Owens Corning
• Schneider Electric
• Spirax Sarco
• Traco
• Volvo
• World Kitchen
• Harbec
• United States Mint
Commercial Superior Energy Performance Pilots:
•Cleveland Clinic
•US GSA
•Grubb & Ellis Company
•Marriott International, Inc.
•MIT Campus’s
•Target Corporation
•Wal-mart Stores, Inc.
Benchmark EnMS Maturity
Updated 2011, 7% Energy
Energy efficiency Benchmarking Maturity
EDF, 2013
Financial Criteria Benchmarking Maturity
EDF, 2013
Re Deployment of Operating Cost Savings
EDF, 2013
8
Source: UNIDO 2010
Source: UNIDO
Energy Investments & OperationsWhy Energy Audits Aren’t Enough
Source: DOE
Organizations That Measure ROI/IRR of CSR 2009 - 2011
• Proportion of clients reporting Program ROI / IRR increasing
• Internal resource constraints continue, functional silo’s
• Breadth of adoption increasing
Executive Leadership is critical to ‘Mind the Gap’Facility managers typical energy champions
Harnessing the Power of a Process
Business processes for competitive advantage:
• Six Sigma• Lean Manufacturing• Continuous
Improvement
• ISO 9001• ISO 14001• Plan-do-check-act
Formal energy management standards (ANSI, BSI):
0%
5%
10%
15%
20%
25%
30%
35%
40%
Energy Management
Standard
Continuous Improvement
ISO 9001 or 140001
Six Sigma Lean
JCI Study - 83 Organizations surveyed…
State of the Art – Inconsistent use of Management Processes
Result:
Lower ROI, Mixed Results0
5
10
15
20
25
30
35
40
0-2 3-4 5-6 7-8 9-10
Nu
mb
er
of O
rga
niz
atio
ns
Energy Management Score
JCI Study - 83 Organizations surveyed…
• Training for employees: 76%• Formal review of energy policy - CSR: 47%• Incentives for energy efficiency success: 45%• Effective & empowered energy team: 41%• Enterprise level energy data: 29%• Corporate reduction goal: 28%• Energy action plan for organization: 28%• Formal energy policy: 27%• C-level responsibility: 27%• Adopted energy standard: 27%
Management Systems Strategy – Technical and Behavioral
Focus EnMS on plants, buildings and operations above target.
•Drive Process Improvement
•Drive ROI/IRR
•Drive Integrated CSR
•Linkage to GHG
Focus EnMS on plants, buildings and operations above target.
•Drive Process Improvement
•Drive ROI/IRR
•Drive Integrated CSR
•Linkage to GHG
Energy Management System Best Practices
Step 1 – Commitment Step 2 - Data
Step One: Secure Commitment from Top Management
• Set Energy Policy • Define Scope and Boundaries
Step Two: Collect, Track, and Analyze Energy Data
• Current and past energy use, consumption
• Estimate future energy use, consumption
Step 3 – Energy Use
Step Three: Identify Key Energy Uses
• Facilities
• Systems
• Equipment
• Processes
• Relevant Variables
• Personnel (including on-site Contractors)
Step 4 - Baseline
Step Four:Establish a Baseline
• Reference point for energy performance
• Outlines current energy performance
• Predicts future energy performance
• Provides benchmarking method
Step 5 - Opportunities Step 6 - Prioritize
Step Five: Identify Energy-Saving Opportunities
• New Sources• Renewable Sources• Alternative Sources
Step Six: Prioritize Opportunities
• Return on Investment • Ease of Implementation
Implementation and Operation
• Competency, Training & Awareness
• Communication
• Documentation, Control of Documents
• Operational Control
• Design
• Procurement
Checking and Management Review
Monitoring, Measurement and Analysis
Evaluation of Compliance
Internal Audit
Non-Conformance, Correction, Corrective and Preventive Action
Control of Records
Management Review
EnMS and Other Standards
• Legal / Other requirements
• Significant Energy Use
• Objectives, Targets, Action Plans
• Evaluation of Compliance
• Design
• Procurement
• Management Responsibility
ISO 9001:2008 ISO 14001:2004
Common Elements with other ISO Systems:
Building a Best in Class Energy Management System
23
Building a Best in Class Energy Management System
24
EnMS & SEP Best Practice MappingOrganizational level
Barriers Best Practices
EnMS & SEP Best Practice MappingCapital level
Barriers Best Practices
EnMS & SEP Best Practice MappingData level
Barriers Best Practices
EnMS & SEP Best Practice MappingCommunication/PR level
Barriers Best Practices
The Superior Energy Performance (SEP) Program
ISO 50001 /SEP Demonstration sites US
Source: DOE
DOE SEP Pilot Results
Source: DOE
Results – Energy Cost Savings
Source: DOE
Shareholder Perspectives EnMS – Accounting for Value
• Profit Margin– Procurement - energy hedging– Product design can embody energy
considerations – Supply chain costs - energy, raw
material & transportation– Extend QMS and EMS systems
whether certified or “Self Declared”
• Sales Growth– Life cycle energy reductions
embedded in product manufacturing– Competitive advantage, less energy
and related raw material processing
• Investment Working Capital– Reduced excess energy and
materials, waste prevention, recycling, raw material substitution
• Investment Fixed Capital– Energy process modifications often
lead to end-of-the-pipe pollution control facilities
• Tax Rate– Availability of grants, utility program
credits, insurance ratings
• Cost of Capital– Improve loan characteristics– Energy risk management attracts
shareholders which leads to lower cost of debt and equity
– Non-disclosure of energy efficiency, like environmental performance may have short-term impacts that lead to premium capital costs
Results – Costs of ImplementationIn most cases ROI < 2 Yrs.
Source: DOE
Case Studies, Results & Feedback from the Field
Staff Support
• A cross-functional energy management team is needed for effective implementation.
– e.g., plant energy leader, plant leader, quality leaders, engineers.
• All types of employees can contribute to energy management
– Line and production workers add separate sets of expertise
Feedback from Facilities
Other
• R&D should consider use of energy to produce a product.
• Achievements can bring recognition across the organization.
Costs
• Capital investment is not always required to achieve cost savings.
• Change of mindset: lower price per unit of energy is not the only way to reduce energy costs
Influence of Energy Management
• Managing energy has similar structure as managing cash, safety, health, environment and quality.
• Energy management becomes a way of doing business, instead of making improvements on project-by-project basis.
• Energy management becomes a shared responsibility across operations, maintenance, finance.
AU Optronics, Taiwan
St. Mary’s Cement
Save Energy Now – Best Practice AlternativeData Center Assessment Summary Verizon
Save Energy Now – Best practice AlternativeData Center Assessment Summary Lucas film
Briggs & Stratton – Best Practice Alternative
Dahanu Power Station, India
Delta Electronics
Schneider Global HQ
CertifiedISO14001HQE ExploitationNF EN16001ISO 50001: first certified building in the world!
÷4Final energy consumption vs. previous sites in the area
80 kwh/m²/ anFinal energy consumptionROI in 5 to 7 years
Schneider Electric Smyrna, TNISO 50001 Certified, SEP Pathway
Haynes International
Pfizer Ireland – ISO 50001
Reduced energy and resource intensity, decrease CO2 emissions.
Used ENERIT ISO 50001 IT Platform to facilitate certification.
49
• SustainabilityCNH is part of Fiat Industrial
– fully integrating the environment and society with economic objectives. 2010 Fiat Sustainability Report.
.
• Certified Management Systems
Commitment to sustainability includes having our manufacturing activities performed in responsible facilities that are certified to meet environmental, quality, safety and now energy management system standards.
CNH / Fiat Certification – Building into CSRUL DQS Certified first plant
Volvo
• Absolute energy use and intensity - 38%, 2001 to 2010
• As part of U.S.-DOE’s Save Energy Now, accomplished 10-year goal of 25% improvement in energy intensity in 2010 (29.6%)
• Goals 2010 to 2012 reduce idling losses – or energy use outside of production – by 50 percent by 15% per unit produced against a 2008 baseline.
Energy Management within ISO 14001 Programs
Mass Transit Agency Leadership LA Metro, NY MTA
DOW
2800 Staff / 2300 global Auditors, 76 offices in 55 countries Over 20,000 customers, 100 countries
UL DQS –Integrity, Competence and Trust in Management Systems
