Thomas Svensson, EMEA Managing Director at EnerNOC provides six key points to develop smarter energy management…
Global energy markets are forever shifting in response to policy, politics, supply and downstream demand. This volatility in energy prices presents a significant risk to business – for example commercial electricity prices increased by 157% from 2004 to 2013 compared to 23% general price inflation according to Committee for Climate Change statistics. In contrast, in November 2015, the Department of Energy and Climate Change (DECC) slashed its projections for wholesale gas prices for 2020 by 14%.
Heavy industry has scrutinised energy out of necessity, but it’s the savvier businesses in other sectors that have also started to invest in connecting energy usage to business outcomes. Smarter energy management leads to competitive advantage, not to mention putting substance behind sustainability efforts. I find leading executives are paying more attention to energy management than ever – and it should come as no surprise that property portfolio managers are leading the pack.
The majority of large enterprises today, however, simply lack the technology and strategy they need to stay ahead of the game. Let this be a wake-up call, because energy costs are manageable if you have the right strategy, tools, and processes in place. Here are six strategies your organisation can implement to start down the path to better energy management:
1. Tackle Compliance Head-On
Regulatory compliance and standards are valuable components of conducting business. Just like your HR team has employee data privacy rules with which to comply, energy consumption and building efficiency are also becoming more regulated.
Keeping up with evolving regulations and standards is a major pain point for many organisations, particularly those with a large portfolio of properties, but a surprising number of organisations are taking a slower route to meet these requirements because they don’t have actionable information.
Automating and centralising the collection of utility bill and energy efficiency data dramatically reduces the opportunity costs associated with compliance – whether proving that you’re benchmarking against the Global Real Estate Sustainability Benchmark (GRESB) guidelines or building efficiency regulations. You may have a smart meter, but can you access and analyse that data to make impartial decisions?
2. Make Suppliers Compete for Your Business
Most organisations prefer the expertise of a corporate travel agent or a software system like Concur to assess the best pricing for airfares or hotels. At home we’re obsessed by getting the best deal on comparison sites, yet too few organisations based in competitive energy markets make suppliers vie for their electricity or gas business.
3. Automate Reporting to Internal Stakeholders
A solid reporting framework is a critical component of any management strategy. But it’s no easy task, especially considering the need to compile disparate data sources, building spreadsheet after spreadsheet to model energy consumption and tailor for varied audiences within your organisation.
You may have a data analyst with plenty of time on his or her hands, but if you’re like most organisations, there’s enormous value in automating reporting to not only free up valuable resources to run your enterprise more effectively, but also to reduce the likelihood of introducing bad data into the process.
4. Account for Asymmetrical Skill Sets
Just like you conduct regular check-ins with members of your team to highlight wins and coach on underperformance, the same should be true for your operations team. But instead of regularly coaching people, it’s often about coaching buildings.
Some buildings, and the people who run them, are like finely-tuned machines. Others, not so much. Especially for those with responsibility over a portfolio of buildings, energy managers should define what success looks like using their best performing buildings as models, and then hold the underperformers accountable for driving improvements. Transparency drives accountability, so the more data you have, the easier it is to affect change. Accounting for asymmetrical performance is also a great way to help understand where the next investment – whether it’s in pounds or man hours – is going to have the best impact.
5. Communicate, Communicate, Communicate
Effective communication around energy management is one of the most common challenges in any organisation. This is exacerbated by the fact responsibility for energy management is often spread across the organisation in multiple functional areas including finance, procurement, operations and facilities management.
Competing goals and islands of responsibility require tools to facilitate effective communication and alignment. Community engagement tools are a great way to promote communication and drive transparency. Too many organisations overlook this critical component of a successful energy management strategy.
6. Create and Enforce Policies
Enterprises have policies for everything from how to buy office supplies to how a sales team must sell goods or services.
When it comes to energy, many organisations already have good policies in place – it’s the enforcement where the process starts to fail. Nearly every organisation has instances of policies that aren’t effectively enforced: start-up and night setback schedules are overridden, weekend schedules aren’t correctly implemented and buildings run over holidays like they’re fully occupied.
Conclusion: Knowledge Is Power
Whether you’re the only person at your organisation focused on energy management, unable to dedicate significant time, or have a huge team without clear priorities, having clear strategies in place that are backed by innovative energy intelligence software will be your ace in the hole to finally taking control of energy costs. Energy management transformation won’t happen overnight, but you’ll be amazed by how small changes will very quickly begin adding up to significant savings for your organisation. ■
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EMEA Managing Director