The long and short of energy efficiency

Peter Garforth says manage the apparent conflict between low-cost and big-capital energy projects.

By Peter Garforth

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The challenge to deliver long- and short-term energy efficiency results was the topic of a recent conversation I had with one of my customers. By most standards, this energy manager was in the best of all worlds, yet still felt management was sending conflicting signals between short- and long-term results. After some discussion, it was clear that there really was no conflict.

The organization, a large college, has a clear strategic commitment to energy sustainability, actively supported by senior management and the board. The previous year had been spent developing a fully integrated energy and climate master plan aimed at delivering breakthrough results in the coming decade. In this case, the energy use of three large complex sites would be more than halved, along with the associated energy cost reductions and improved greenhouse gas performance. The board and management have approved the plan and the associated investments over the coming seven to eight years. The first major subprojects of the plan are moving forward involving extensive upgrades of control and metering systems and retrofitting a number of buildings. On one site, a completely new energy center with associated networks for heating and cooling is entering the pre-engineering phase and is expected to be on stream within the next two years.

Looking at this from the outside, most energy managers would be overjoyed to have this combination of strategic commitment, detailed long-term planning, and committed resources. As we have noted so often in this column, this is a very rare path for most companies. So why is there the sense that there is some kind of emerging leadership conflict?

In the weeks preceding this conversation, the organization had been hit by a single large increase in electricity price. They are anticipating this will be the first in a series of increases to come in the near-term future. Not surprisingly the leadership is looking for efficiency measures that would bring short-term cost relief from these increases. It was easy for the energy manager, fully immersed in the first major capital subprojects of the newly approved energy master plan, to interpret this as conflicting expectations between short- and long-term results.

Upon further consideration, this situation was seen as an opportunity to reinforce the plan as a whole. The first step was to go back to the integrated energy plan itself and read it carefully and in its entirety, not subproject by subproject. In addition to the capital subprojects, the plan called for some very specific low-cost/no-cost subprojects, active schedule management enabled by improved controls and metering, as well as enhanced engagement of staff, faculty, and employees.

The reality of any larger capital subproject is that it will cause site disturbance, absorb time and money, and encounter the inevitable day-to-day problems. It doesn’t take long for a large capital subproject to become a potential target for irritation, criticism, and challenge. The benefits, while substantial, will only show up two to three years from the time the subproject commences. The danger always exists that the overall energy plan could be redirected or delayed — a dynamic that may be exacerbated by calls for investments to be redirected to the “core” business of the organization.

Peter Garforth heads a specialist consultancy based in Toledo, Ohio and Brussels, Belgium.Peter Garforth heads a specialist consultancy based in Toledo, Ohio and Brussels, Belgium. He advises major companies, cities, communities, property developers and policy makers on developing competitive approaches that reduce the economic and environmental impact of energy use. Peter has long been interested in energy productivity as a profitable business opportunity and has a considerable track record establishing successful businesses and programs in the US, Canada, Western and Eastern Europe, Indonesia, India, Brazil and China. Peter is a published author, has been a traveling professor at the University of Indiana at Purdue, and is well connected in the energy productivity business sector and regulatory community around the world. He can be reached at peter@garforthint.com.

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However, the low-cost or no-cost subprojects from the plan are different. These deliver energy cost reductions quickly. As controls and metering are upgraded in a building, the staff can immediately be engaged in actively managing the building’s operations in line with the actual usage schedule. Low-cost efficiency measures such as weatherization, door closures, and occupancy sensors can be completed. The efficiency improvements will be nearly immediate and, thanks to enhanced metering, can be tracked, visualized, and communicated. The early results of the short-term measures begin to change the organization’s culture around energy, which will be essential to making sure the larger capital subprojects deliver their full potential, as well.

As these low-cost/no-cost bundles are ready for prime time, they can be launched through events involving the senior management, board members, local press and TV, and of course the on-site and local community. Each of these “launches” provides a platform to underline some important messages that will reinforce the commitment to the entire integrated energy master plan. The core message is that these are all part of a multi-facetted energy plan that combines long-term substantial change with short-term efforts aimed at capturing immediate efficiency benefits. The status of the long-term measures, which are pretty interesting, would be part of this message, as well. Last but certainly not least, these launches will constantly reinforce the message that energy productivity is a journey, not a destination — one that is fundamental to the competitiveness and relevance of the organization.

The ultimate conclusion for the energy manager is clear. The challenge is to implement the entire integrated energy plan from short-term low-cost/no-cost improvement measures to large capital subprojects over the longer term. This requires discipline in scheduling and managing priorities and resources. Failure to deliver the short-term results will jeopardize the enthusiasm to follow through on the larger investments. Failure to effectively deliver both long- and short-term results will cause the entire strategy to unravel.

Read Peter Garforth's monthly column, Energy Expert.

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