No Energy management program? You're throwing your money away

August 19, 2010

According to the US Federal Energy Management Program, businesses without proactive energy management programs are spending 10 to 45 percent more on energy per year than they need to be. With energy expenditures accounting for up to 25% of a business' annual operating costs, the upfront savings alone make pursuing an energy management program a no brainer.

From a risk mitigation perspective, the movement toward's real-time, time-of-use pricing and the potential for much greater energy costs in the near future, demands action.

A simple four-step energy management program

Energy management is a simple process that, once implemented, quickly gains its own momentum from the inevitable cost savings realized.

  1. Measure energy use (meter)
  2. Fix the basics
  3. Monitor and improve
  4. Continuous commissioning

Energy management is a simple process that, once implemented, quickly gains its own momentum from the inevitable cost savings realized.

1. Measure energy use

The old adage "you can't fix what you don't measure" holds true for energy usage. Without a clear understanding of where energy consumption is taking place, it is impossible to manage it. Once identified, however, areas of consumption can be investigated to uncover opportunities for savings.

Often those opportunities amount to simple equipment fixes or changes in process that can have a large impact on energy conservation — which in turn makes a huge difference to an organization's bottom-line. Indeed, the US Environmental Protection Agency (EPA) estimates that a 10% reduction in energy costs can boost profit margins by as much as 6%! Measuring energy usage is a simple process with today's readily available smart metering products. IP-based metering systems can be easily "plugged" into new or existing building's electrical infrastructure with no rewiring costs. And once installed, energy consumption information can be transmitted over existing wireless, phone or high-speed internet connections — keeping building owners and property managers up-to-date with the latest energy consumption data at their fingertips.

2. Fix the Basics

Often the most costly wastes of energy are the easiest ones to identify once a metering infrastructure is in place. A metering systems allows building managers to identify energy use by equipment and/or building area over time. With such a system installed, it's easy to see where energy resources are being consumed.

It is not uncommon to identify some or all of the following opportunities for energy savings once a metering fabric is installed:

  • Improperly programmed building automation (lights, HVAC)
  • Forgotten equipment loads
  • Lighting systems in use when not needed
  • Poor work processes
  • Non staggered AC motors
  • Failing AC motors
  • Failing HVAC equipment
  • Time-of-use for heavy loads
  • Opportunities to sequence loads

The energy savings impact of dealing with these easily identified opportunities is quite significant. For example, a recent study by the California Energy Commission (CEC) on small rooftop HVAC systems in California showed that identifying and correcting improperly running equipment represented a savings opportunity between of 6.25% and 8.75% of all electricity costs in an office environment.

3. Monitor and IMprove

It is clear that "one-time" process and equipment fixes alone are not enough to sustain energy cost savings over time. Without continuous monitoring, short term gains are quickly lost.

According to Schneider Electric, the lack of regular monitoring and maintenance of identified energy savings opportunities causes companies to lose ground at a rate of up to 8% per year in energy consumption. That number increases to 12% when regulation and control systems are not put in place.

4. Continuous commissioning

Continuous commissioning utilizes existing Building Management Systems (BMS) and metering platforms as the first line of defense in keeping energy management initiatives on track.

The primary goal of the BMS is control and alarm response. IT systems add business applications to the mix, exposing vital information to a broader audience of stakeholders than BMS's normally do. A metering platform combined with an Energy Management System (EMS) fulfills the critical role of providing increased metering and monitoring accuracy, data logging, and enhanced circuit coverage.

Meters are essential to understanding the use of energy within a building and are a critical part of an Intelligent Building. This extends to other services such as water and natural gas that, when combined with electricity, roll up to provide an accurate picture of a building's carbon footprint.

Do the math

A simple example built on real-world experience will help illustrate the savings impact an energy management program can have.

Office space = 50,000 ft2
Electricity intensity ~ $3.00/sq ft/annum
Total electricity cost per annum (without demand charges): $1.5M
Annual Savings opportunity:
= 10%: $150K
= 15%: $225K
= 25%: $375K

Any business — small, medium, or large —can benefit from an energy management program.With energy consumption accounting for up to a 1/4 of a business' annual operating budget (and energy costs expected to continue to increase year over year) the potential opportunity in cost savings and increased profit margin are huge. A simple four step process — measure (meter) energy use, fix the basics, monitor and improve, continuous commissioning — has few barriers to entry. Smart, cost effective meters and metering software is easy to deploy and forms the basis for quick fixes, ongoing savings, and continuous monitoring and improvement

Gord Echlin, VP Sales and Marketing, Triacta