The benefits of electricity efficiency

Benefits of Electricity Efficiency

10/2/2012 1The Benefits of Energy Efficiency

Cost Behavior.

The 3 E’s Model.

Normal vs. Abnormal Consumption.

Cost Driver.

Activity Based Costing Theory.

Related concepts


Costs Based on Level of Production:

Fixed costs: do not change within the relevant

range of production

Variable costs: are those that are incurred only

when product is made.

Mixed costs: these are costs that have both a fixed

and variable component. ( electricity cost )

Cost Behavior


Effectiveness: has to do with the actual accomplishment of goals.

Efficiency : is the attempt to fulfill the objectives of the company

while using the least amount of inputs.

Economy: is measured by looking at the cost of the resources

consumed and the value of the output delivered.

The 3E’s Model


10/2/2012 The Benefits of Energy Efficiency 5

Which is most important

Effectiveness or Efficiency?

If a company is Efficient but does not

accomplish what is needed

then the efforts and resources used were

wasted.

Normal consumption is the level and

amount of consumption that normally

occurs .

Abnormal consumption is any

consumption in excess of this normal

expected amount of consumption.

Normal vs. Abnormal Consumption

610/2/2012 The Benefits of Energy Efficiency


Normal Consumption

Abnormal Consumption

Consumption

Non Controllable Controllable

Cost Drivers: Is the factor that influences the amount of the

resources that will be consumed by a particular activity.

Activity Based Costing theory

Activity-based costing (ABC) is a special costing model that identifies

activities in an organization and assigns the cost of each activity with

resources to all products and services according to the actual

consumption by each

Cost Drivers and ABC Theory


1. Identifies the causal relationship between the incurrence

of cost and activities.

2. Determines the driver of activities.

3. Establishes cost pools related to individual drivers.

4. Develops costing rates.

5. Applies cost to product on the basis of resources

consumed (drivers).

Activity Based Costing Steps


The Energy Pyramid

Renewable Energy

Energy Efficiency

Energy Conservation

Energy Analysis


A. Energy conservation : refers to efforts made to reduce energy consumption. Energy conservation can be achieved through increased efficient energy use, in conjunction with decreased energy consumption and/or reduced consumption from conventional energy sources.

B. Efficient energy use: sometimes simply called energy efficiency, is the goal of efforts to reduce the amount of energy required to provide products and services.

C. Renewable energy: is energy which comes from natural resources such as sunlight, wind, rain .


Analysis of Electricity Consumption - If Efficiency Rate

has been applied

MEnA Regional Offices Electrical Consumption from Jan. 2011 to June 2012

Bethlehem Hebron Jenin Nablus

Total Consumption Cost (NIS) 3577 7621 5564 2336

Average Consumption Cost 210 448 327 137

Target Reduction Percentage

Target Cost Saving (NIS) 756 2286 1669 701

Target Quantity Saving (KW/h) 1260 3811 2782 1168

Total Consumption 9021 KWH


Trend Analysis for Electricity Consumption

Date Cost (NIS) K W Note

11-Jan 5571 9285 Ramallah Office Electric Service01/2011

11-Feb 3501 5835 Ramallah Office Electric Service02/2011

11-Mar 4308 7181 Ramallah Office Electric Service03/2011

11-Apr 2972 4953 Ramallah Office Electric Service04/2011

11-May 2341 3902 Ramallah Office Electric Service05/2011

11-Jun 1662 2770 Ramallah Office Electric Service06/2011

11-Jul 1719 2865 Ramallah Office Electric Service07/2011

11-Aug 1642 2737 Ramallah Office Electric Service08/2011

11-Sep 2204 3673 Ramallah Office Electric Service09/2011

11-Oct 1847 3078 Ramallah Office Electric Service10/2011

11-Nov 3978 6630 Ramallah Office Electric Service11/2011

11-Dec 4581 7635 Ramallah Office Electric Service12/2011

12-Jan 7039 11732 Ramallah Office Electric Service01/2012

12-Feb 5750 9584 Ramallah Office Electric Service02/2012

12-Mar 5706 9510 Ramallah Office Electric Service03/2012

12-Apr 2916 4860 Ramallah Office Electric Service 04/2012

12-May 1988 3314 Ramallah Office Electric Service05/2012

13The Benefits of Energy Efficiency10/2/2012

Target Saving From Historical Data - If Efficiency Rate Has

Been Applied

Consumption KWHCost (NIS)

KW price= 0.6 NIS

59726Total Consumption Cost (NIS)

3513 Average Consumption Cost

Target Reduction Percentage

1757 KWH1054 NISMonthly Value

21084 KWH12648 NISPeriod Value


Historical Data for Electricity Consumption

0

2000

4000

6000

8000

10000

12000

14000


Historical Data for Electricity Consumption

0

2000

4000

6000

8000

10000

12000

14000

16000


Trend Analysis of Electricity Consumption Data

Month Con. Cost Con.2011 before Jun Average

11-Jun 278411-Jul 2841

11-Aug 276411-Sep 332611-Oct 296911-Nov 510011-Dec 570312-Jan 8161 6693 742712-Feb 6872 4623 574812-Mar 6828 5430 612912-Apr 4038 4094 406612-May 3110 3463 328712-Jun12-Jul

12-Aug12-Sep12-Oct12-Nov12-Dec


Time Trend of Electricity Consumption Data after Modification

Month Horizontal Average Vertical Average Factor

11-Jun 2784 4541 0.61

11-Jul 2841 4541 0.63

11-Aug 2764 4541 0.61

11-Sep 3326 4541 0.73

11-Oct 2969 4541 0.65

11-Nov 5100 4541 1.12

11-Dec 5703 4541 1.26

12-Jan 8161 4541 1.8

12-Feb 6872 4541 1.51

12-Mar 6828 4541 1.5

12-Apr 4038 4541 0.89

12-May 3110 4541 0.68


Forecasting for Electricity Cost

Month weighted average Factor Estimated Cost

12-Jun 4541 0.61 2770

12-Jul 4541 0.63 2860

12-Aug 4541 0.61 2770

12-Sep 4541 0.73 3315

12-Oct 4541 0.65 2952

12-Nov 4541 1.12 5086

12-Dec 4541 1.26 5722

Total Estimated Cost 25475 (NIS)


Targeted Value from Estimated Data

Consumption KWHCost (NIS)

KW price= 0.6 NIS

25475Total Consumption Cost (NIS)

3639Average Consumption

30%When Target Reduction Percentage is Applied

1820 KWH1092 NISMonthly Value

12738 KWH7643 NISPeriod Value


Estimated Cost Chart


1939 2002 19392321

2066

35604005

2770 2860 2770

3315

2952

5086

5722

1-Jun 1-Jul 1-Aug 1-Sep 1-Oct 1-Nov 1-Dec

Estimated Cost - with reduction factor Estimated Cost - without reduction factor

Reduction of Energy Consumption and Emissions

Fuel Units Kg CO2 per unit

1Grid electricity KWH 0.5246

Electricity Efficiency Benefits in the Ministry of Environment Affairs

12738 6682

WWW.CARBONTRUST.CO.UKHTTP://WWW.CARBONTRUST.COM/MEDIA/18223/CTL153_CONVERSION_FACTORS.PDF


http://www.carbontrust.com/media/18223/ctl153_conversion_factors.pdf




The budget analysis and concept

Cost and Emission Variance Analysis:

< Zero (Favorable)

> Zero (Un Favorable)

Actual Cost

Budget Cost

Budget CostActual Cost


Positioning: is the act of designing a company’s offering and image to occupy a distinctive place in the minds of the target market.

The goal : is to locate the brand in the minds of consumers to maximize the potential benefit to the firm.

How to achieve it: Everyone in the organization should understand the brand positioning and use it as context for making decisions.


Positioning


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The benefits of electricity efficiency