Are the collateral benefits of energy management real or imagined?

Peter Garforth examines the collateral benefits of energy management and tries to quantify the results.

By Peter Garforth

Those in the business of professional industrial energy management like to claim that businesses can see substantial collateral benefits from a comprehensive energy management program. Skeptics might view these claims as a desperate attempt to add value to an activity that cannot stand on its own merits. To the convinced, collateral benefits – those that go beyond the obvious cost, reliability and environmental values of energy management – are a given but are hard to quantify. Can we create proof for the skeptic, and persuade the believer to deliver hard evidence? Before we try to answer that question, we need to understand what these claimed collateral benefits are.

The most common claim is that the most-efficient facilities are the safest. The logic is that outstanding energy performance is the result of unfailing attention to myriad small details, supported by clear goals, strong leadership, and employee engagement and awareness, along with a willingness to invest on an ongoing basis. This could also be the description of the pre-conditions for an effective occupational safety program. Energy and safety have another powerful commonality: They both deal with improving the performance around something that is essentially invisible. Effective energy and safety teams exhibit excellent skills in "visualizing the invisible."

The next linkage claimed is that plants with the highest energy productivity have the lowest waste levels of material, which would ultimately end up in landfills or worse.  Recognizing unnecessary energy use as another waste stream, albeit invisible, raises an organization’s ability to detect and reduce this waste. The reverse could be equally true. A team that is expert at waste reduction could enhance its focus on energy waste. In fact, one of the most successful energy programs I have been associated with did just that a few years ago. Reduced physical production waste is a key measure of production yield, where a few percentage points either way can be the difference in a thriving business or one struggling to remain competitive. If reduced waste is truly a collateral benefit of energy management, the decision to evaluate and correct it should be a no-brainer for most manufacturers.

Moving down the list of possible benefits, the high levels of cross-functional teaming and overall employee engagement  needed for energy management are sources of parallel benefits. Engaged teams that are comfortable being challenged by interesting goals and gaining new skills will generally work more productively, again increasing yield. The organization itself develops skills in educating and involving all groups of employees on energy. This is a transferable skill to other areas of productivity.

Efficient facilities will tend to have high-quality lighting, good air quality, and lower noise levels, and they consider how to reduce energy waste in various processes. The apocryphal evidence is that these create higher levels of employee satisfaction and improved productivity. The conventional wisdom is that engaged teams work better in efficient facilities, take fewer sick days, and are less likely to seek opportunity elsewhere.  If true, these are significant benefits.

In a recent column, I highlighted the link between energy supply security and reduced production shortfalls during outages and weather events. Anything that keeps a plant running through critical disturbances can reasonably be seen as having major collateral benefits.

In addition, powerful energy and climate stories can create a halo for the company from a public relations standpoint; this can attract new customers and shareholders and possibly boost customer loyalty.

Gathering hard evidence to support the claimed collateral benefits of comprehensive energy management is something we all should explore. If professional energy management can catalyze improved market share, motivated employees, higher production yields, reduced waste and cost, a greater ability to survive crises, and better investment potential, it cannot be ignored.

We should be all over the challenge of getting data to substantiate these claims. In an age of Big Data, it's getting easier and cheaper to capture vast amounts of information in near real time. We should be exploring ways to test correlations between these benefits by designing structured experiments and analyses in our own facilities. We should be scouring the wider market for data that helps understand these links.

Maybe we should also recognize the underlying truth in this conversation: Any organization that is sloppy in an area as important as energy is likely to be sloppy elsewhere. In the end, energy efficiency is just one face of effective resource management. To manage it as an optional extra is unwise for the health of the business as a whole.

Read Peter Garforth's monthly column, Energy Expert.

Show Comments
Hide Comments

Join the discussion

We welcome your thoughtful comments.
All comments will display your user name.

Want to participate in the discussion?

Register for free

Log in for complete access.

Comments

  • <p>I started performing energy audits during the Carter administration and from the beginning of time every customer wanted to know the return on investment (ROI). The fact is and always has been that calculating energy savings which is based on what would have happened but did not can be rather daunting. The amusing part is the vendors of energy saving products have gotten so caught up in the ROI demanded by customers that they often seem to be playing a continuous game of “Liar’s Poker”. Each attempting to better the other in the amount of money their product will save. As you so aptly point out, what we should be focused on is a very different ROI, that being “Risk on Investment”. </p>

    Reply

RSS feed for comments on this page | RSS feed for all comments