Strategic Energy Management

To achieve significant, on-going energy savings over a period of five years or more -- going beyond merely  implementing a few energy efficiency improvements sporadically -- many leading companies have developed a strategic approach to energy management. Strategic energy management is essentially a continuous improvement approach to energy management, similar to the “plan, do, check, act” approach that has been successfully applied to quality improvement in manufacturing for many years. The following are the key elements of a strategic energy management program.

  1. Obtain management support for long-term energy-saving goals. At the corporate and facility levels, it is crucial to gain the support of the management for five-year or longer energy-saving goals. Essentially, management has to understand that energy is a controllable expense, rather than a fixed cost or overhead expense. If they need convincing, energy managers may need to show management how much cost savings would result from achieving an aggressive yet achievable five-year energy goal.  The specific goal can be worked out over time. One simple approach is to shoot for a 10 percent improvement in energy intensity (energy consumption per unit of production) over a 5-year period.
  2. Dedicate staff, including an energy champion. The facility energy manager/energy champion should have overall responsibility for managing energy use and costs at the facility. Energy goals should ideally be included in his/her performance plan and compensation. In addition, the site energy manager should form an "energy team," obtaining the support of other key parts of the organization, including production, finance/accounting, procurement, maintenance, and environmental health and safety. The energy team should work together towards achieving the facility’s energy-saving goal.
  3. Develop and regularly update energy management plans. To achieve the facility’s energy goal, the site energy manager and team need to develop a prioritized list of energy efficiency projects. Along with assigned responsibilities and a schedule for evaluation and implementation, this becomes the facility’s energy management plan, which should be reviewed with managers quarterly or as appropriate
  4. Implement a system for tracking energy use.  Consider installing sub-meters for major energy end-use systems or production processes in order to measure and track energy consumption over time. It also may be useful and cost-effective to install systems to gather and analyze energy data in real-time so that site operators can make operating adjustments to optimize energy use.
  5. Quantify energy savings from energy-efficient equipment upgrades and from O&M improvements. As projects are implemented, it is very important to measure energy and cost savings. This can be done by installing temporary or permanent sub-meters (natural gas or electricity) to take before and after measurements of consumption. Documenting savings from specific projects will go a long way towards obtaining management support for financing of future energy projects. Measuring energy savings from operations and maintenance (O&M) improvements is more challenging and may require more sophisticated data collection and analysis to separate out reductions in overall energy consumption from changes in other variables such as the production rate, product mix, input materials, etc.