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Are energy audits necessary or a waste of valuable resources?

March 11, 2014

Everybody knows that the first step in every energy project should be the “Energy Audit”. Guess what? Just because everybody knows doesn’t mean it’s true!

 Everybody knows that the first step in every energy project should be the “Energy Audit”. Guess what? Just because everybody knows doesn’t mean it’s true!

Watson: Since nearly everyone in this field accepts what I was taught, that the audit must always be the first step, why do you feel the way you do, Holmes?

Holmes: Good question, simple answer. My personal experience has proven time and time again that most energy audits recommend simple, cookbook solutions that owners are already aware of and miss the greatest opportunities. They are often done by people new to the field with little actual real-world experience.

Let’s go back and start with the basics. I assume you have researched both “Audit” and “Energy Audit” like I asked. What did you find?

Watson: I Googled “Audit” and came up with several interesting definitions including: “An examination of records to check their accuracy, an adjustment or correction of accounts, an examination and verification of a company's financial and accounting records and supporting documents by a professional such as a Certified Public Accountant.” Or “an IRS examination of an individual or corporation's tax return, to verify its accuracy. Since there is always the chance of an audit, experts recommend keeping good records to support all the information in a return.”

Then I Googled “Energy Audit” and found that it is defined as an assessment of the energy needs and efficiency of a building or buildings. There is no mention of the examination of data, of records, to check their accuracy and make adjustments or corrections as required.

Holmes: According to the definition then, an “Audit” requires detailed and accurate bookkeeping. But other than utility bills, sometimes from only one meter for an entire industrial plant, military base or university campus, most facilities or organizations have no detailed energy records at all.

So an Energy Audit really isn’t an “Audit” after all is it? An audit requires data, records, facts; and because the energy Conservation Field has for reasons that have mystified me for more than 30 years, never required detailed records showing where and when every KWH, Therm or Gallon of water is used, there can be no audit of actual data.

And an audit needs to be performed by an unbiased professional, someone with no conflict of interest, someone whose company does not coincidently just happen to sell the product or service that the audit will recommend.

So with their own definition of “Audit”, in the absence of actual data, this profession goes to great lengths and expends tremendous resources on trying to estimate what that data would be if they actually had some.

Watson: I see your point. The fact that Energy Audits even exist is an admission that there are no detailed energy records for most facilities, isn’t it? I was taught in engineering school that all valid science must be based on accurate data. But somehow the so-called “Energy Profession” has survived for 40 years based on almost no actual data at all.

Doesn’t sound like a true science-based “Profession” to me.

Holmes: You catch on very fast, Watson. Exactly the point I have been making for more than 30 years. We are way overdue for change, for this profession to become based on actual, accurate data and join aviation, medicine, manufacturing and most other businesses in the world. This is the 21st century!

Watson: Even though you don’t believe in them, have you done Energy Audits, Holmes?

Holmes: Sure, when I first got involved with energy conservation I did what others just getting into this field were doing, energy audits, then detailed energy studies. All of these things were headed toward capital projects, buying new equipment. Everyone knew that was the only way to save energy.

After I started my own business, I would go to each prospective project and spend a day, similar to a walk-through audit, looking at everything in the building; all of the energy systems, to see if the facility looked like a good candidate for my services. Would I be able to save them anything? But you know what? You can’t tell. There is absolutely no way to know without accurate information, and it can’t be just from a spot check or from installing temporary monitoring equipment.

Energy usage patterns in any type of industrial plant or large facility are extremely complex. They change every hour of every day. Even if temporary instrumentation is installed for a few weeks or months, energy audits are just a snapshot of individual energy systems taken during a limited time period. And they have no way to account for the interaction of all of the energy systems on an ongoing basis, really essential information.

After I had been in business for a short time I stopped doing any type of audits, surveys or studies to see if I could determine if a facility had potential, opportunities to save energy; when I realized that every single facility had potential. I decided that there were only two criteria for determining whether a facility would be a good candidate for my services. Number one was, did top management strongly support the efforts to save energy? Number two was, did the facility spend enough on utilities to justify my efforts?

Watson: Since you stopped doing Energy Audits, how do you start working with a new facility?

Holmes: If they meet both of the above criteria, we spend every dollar on installing instrumentation, a monitoring system. From then on the facility has an accurate, permanent, unbiased ongoing energy audit that shows where every dollar is spent every hour of every day. Then utility dollars can be managed like every other dollar. The monitoring system allows the owner to start making no-cost and low-cost changes and generating energy savings the first day, literally. And in nearly every case the monitoring system has paid for itself in a few weeks or months. We have seldom found the need for capital improvements. If they are required they should be the last step, certainly not the first.

The monitoring system has uncovered huge problems, several of which had existed for 30 years or more; without adequate data the people in the plant, contractors, energy auditors and other experts had missed them.

Watson: Have you found others who agree with your approach?

Holmes: Probably the most popular article I have ever written was “The Energy Audit, a Sacred Cow of Energy Management” which was published in Sustainable Plant in December 2011. Read the Article

I found that I am certainly not alone in my views. I got a lot of positive feedback from experienced professionals including the comment, “The “energy audit” facially appears to be the right thing to do and makes them feel warm and fuzzy. Meanwhile, there are some big, long-term opportunities being missed.”

You can read more feedback from energy professionals in my article Energy Professionals Talk Back published in October 2013. Read the Article

Tell us about your experiences, both good and bad with energy professionals, what has worked and what hasn’t. Send us your comments, thoughts and suggestions on how to improve our profession so we can all continue to learn from each other. Thanks – Holmes & Watson.

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