Energy Management A Manager's Guide

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The purpose of this book is to show that all organisations can save energy and money, and help the environment, by treating it as a management issue. Throughout, the emphasis is on practical management issues. Contents: An overview of energy management A corporate approach Energy purchasing Energy audits and surveys Management information Appraisal Energy, the environment and quality Saving energy through people

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1.1 Introduction

ePub

 

1.2 The Aim of Energy Management

ePub

CHAPTER 1

An Overview of Energy Management

1.1   Introduction

In today’s market any organisation must make efforts to increase sales, reduce operating costs, or both, in order to maintain profitability. Increasing sales of an organisation’s goods or services will in itself depend on its cost base, especially where it is in direct competition with other suppliers. Thus reducing energy costs can play an important role in maintaining or improving the organisation’s market share by decreasing the cost base and allowing it to reduce market prices whilst maintaining profitability.

However, energy generally has a low priority for management attention in many organisations because energy costs are considered as an overhead rather than as a controllable cost. With relatively low energy prices managers are rarely held accountable for its use and energy is often wasted as a result.

In the past emphasis has been placed on technical solutions - but these solutions often failed to reach the implementation stage because energy falls into the lowest priority category for receiving funds. Appropriate management support and people solutions are equally essential to the success of any energy management strategy but too often the management and people dimensions have been neglected.

 

1.3 Pay Less per Unit of Energy

ePub

CHAPTER 1

An Overview of Energy Management

1.1   Introduction

In today’s market any organisation must make efforts to increase sales, reduce operating costs, or both, in order to maintain profitability. Increasing sales of an organisation’s goods or services will in itself depend on its cost base, especially where it is in direct competition with other suppliers. Thus reducing energy costs can play an important role in maintaining or improving the organisation’s market share by decreasing the cost base and allowing it to reduce market prices whilst maintaining profitability.

However, energy generally has a low priority for management attention in many organisations because energy costs are considered as an overhead rather than as a controllable cost. With relatively low energy prices managers are rarely held accountable for its use and energy is often wasted as a result.

In the past emphasis has been placed on technical solutions - but these solutions often failed to reach the implementation stage because energy falls into the lowest priority category for receiving funds. Appropriate management support and people solutions are equally essential to the success of any energy management strategy but too often the management and people dimensions have been neglected.

 

1.4 Reduce Energy Consumed

ePub

CHAPTER 1

An Overview of Energy Management

1.1   Introduction

In today’s market any organisation must make efforts to increase sales, reduce operating costs, or both, in order to maintain profitability. Increasing sales of an organisation’s goods or services will in itself depend on its cost base, especially where it is in direct competition with other suppliers. Thus reducing energy costs can play an important role in maintaining or improving the organisation’s market share by decreasing the cost base and allowing it to reduce market prices whilst maintaining profitability.

However, energy generally has a low priority for management attention in many organisations because energy costs are considered as an overhead rather than as a controllable cost. With relatively low energy prices managers are rarely held accountable for its use and energy is often wasted as a result.

In the past emphasis has been placed on technical solutions - but these solutions often failed to reach the implementation stage because energy falls into the lowest priority category for receiving funds. Appropriate management support and people solutions are equally essential to the success of any energy management strategy but too often the management and people dimensions have been neglected.

 

1.5 Benefits of Energy Management

ePub

CHAPTER 1

An Overview of Energy Management

1.1   Introduction

In today’s market any organisation must make efforts to increase sales, reduce operating costs, or both, in order to maintain profitability. Increasing sales of an organisation’s goods or services will in itself depend on its cost base, especially where it is in direct competition with other suppliers. Thus reducing energy costs can play an important role in maintaining or improving the organisation’s market share by decreasing the cost base and allowing it to reduce market prices whilst maintaining profitability.

However, energy generally has a low priority for management attention in many organisations because energy costs are considered as an overhead rather than as a controllable cost. With relatively low energy prices managers are rarely held accountable for its use and energy is often wasted as a result.

In the past emphasis has been placed on technical solutions - but these solutions often failed to reach the implementation stage because energy falls into the lowest priority category for receiving funds. Appropriate management support and people solutions are equally essential to the success of any energy management strategy but too often the management and people dimensions have been neglected.

 

2.1 Strategy

ePub

CHAPTER 2

A Corporate Approach

2.1   Strategy

Energy management can only be effective if it is part of corporate strategy which has senior level commitment with clear communication lines to everyone in the organisation. Energy management needs a supportive context if it is to grow and prosper.

Strategic approaches vary from organisation to organisation but will usually have a number of elements in common:

In developing the corporate strategy a number of factors are important:

2.2   Policy

There must be a clear energy management policy, fully supported by top management and clearly communicated to everyone in the workforce. The policy should be a concise written statement of intent. Some parts of the policy may be for external purposes - other parts may contain confidential information and be for use within the organisation.

It is important that the policy has clear goals and is supported at every level in the organisation. The policy must go beyond objectives and translate these into a clear implementation plan with targets, dates and people/resources identified. The policy must be supported by a more detailed strategy explaining in practical terms how the policy aims are to be realised. It is useful to make specific targets, give dates and have individuals who are responsible.

 

2.2 Policy

ePub

CHAPTER 2

A Corporate Approach

2.1   Strategy

Energy management can only be effective if it is part of corporate strategy which has senior level commitment with clear communication lines to everyone in the organisation. Energy management needs a supportive context if it is to grow and prosper.

Strategic approaches vary from organisation to organisation but will usually have a number of elements in common:

In developing the corporate strategy a number of factors are important:

2.2   Policy

There must be a clear energy management policy, fully supported by top management and clearly communicated to everyone in the workforce. The policy should be a concise written statement of intent. Some parts of the policy may be for external purposes - other parts may contain confidential information and be for use within the organisation.

It is important that the policy has clear goals and is supported at every level in the organisation. The policy must go beyond objectives and translate these into a clear implementation plan with targets, dates and people/resources identified. The policy must be supported by a more detailed strategy explaining in practical terms how the policy aims are to be realised. It is useful to make specific targets, give dates and have individuals who are responsible.

 

2.3 Structure

ePub

CHAPTER 2

A Corporate Approach

2.1   Strategy

Energy management can only be effective if it is part of corporate strategy which has senior level commitment with clear communication lines to everyone in the organisation. Energy management needs a supportive context if it is to grow and prosper.

Strategic approaches vary from organisation to organisation but will usually have a number of elements in common:

In developing the corporate strategy a number of factors are important:

2.2   Policy

There must be a clear energy management policy, fully supported by top management and clearly communicated to everyone in the workforce. The policy should be a concise written statement of intent. Some parts of the policy may be for external purposes - other parts may contain confidential information and be for use within the organisation.

It is important that the policy has clear goals and is supported at every level in the organisation. The policy must go beyond objectives and translate these into a clear implementation plan with targets, dates and people/resources identified. The policy must be supported by a more detailed strategy explaining in practical terms how the policy aims are to be realised. It is useful to make specific targets, give dates and have individuals who are responsible.

 

2.4 Resources

ePub

CHAPTER 2

A Corporate Approach

2.1   Strategy

Energy management can only be effective if it is part of corporate strategy which has senior level commitment with clear communication lines to everyone in the organisation. Energy management needs a supportive context if it is to grow and prosper.

Strategic approaches vary from organisation to organisation but will usually have a number of elements in common:

In developing the corporate strategy a number of factors are important:

2.2   Policy

There must be a clear energy management policy, fully supported by top management and clearly communicated to everyone in the workforce. The policy should be a concise written statement of intent. Some parts of the policy may be for external purposes - other parts may contain confidential information and be for use within the organisation.

It is important that the policy has clear goals and is supported at every level in the organisation. The policy must go beyond objectives and translate these into a clear implementation plan with targets, dates and people/resources identified. The policy must be supported by a more detailed strategy explaining in practical terms how the policy aims are to be realised. It is useful to make specific targets, give dates and have individuals who are responsible.

 

2.5 Energy Management Matrix

ePub

CHAPTER 2

A Corporate Approach

2.1   Strategy

Energy management can only be effective if it is part of corporate strategy which has senior level commitment with clear communication lines to everyone in the organisation. Energy management needs a supportive context if it is to grow and prosper.

Strategic approaches vary from organisation to organisation but will usually have a number of elements in common:

In developing the corporate strategy a number of factors are important:

2.2   Policy

There must be a clear energy management policy, fully supported by top management and clearly communicated to everyone in the workforce. The policy should be a concise written statement of intent. Some parts of the policy may be for external purposes - other parts may contain confidential information and be for use within the organisation.

It is important that the policy has clear goals and is supported at every level in the organisation. The policy must go beyond objectives and translate these into a clear implementation plan with targets, dates and people/resources identified. The policy must be supported by a more detailed strategy explaining in practical terms how the policy aims are to be realised. It is useful to make specific targets, give dates and have individuals who are responsible.

 

3.1 Introduction

ePub

CHAPTER 3

Energy Purchasing

3.1   Introduction

The purchase of energy is an action which does not in itself contribute to saving energy but can have a considerable impact on energy costs. Since deregulation of the energy market began the opportunity for large, and now not so large, consumers of energy to negotiate with energy suppliers has led to considerable savings for many organisations.

An assessment of the effectiveness of energy purchasing within the organisation should be the first step in any energy cost reduction programme.

3.2   Electricity

Purchasing electricity at the best available rates is not a simple task and is becoming increasingly complex in the latter half of the 1990s. Increasing demands are being made on the buyer and the answers can no longer be found in the tariff brochures issued by the local suppliers, the Regional Electricity Companies (RECs).

The RECs buy their electricity from an electricity pool operated by the National Grid Company. Electricity generators, such as Powergen, supply electricity to the pool at a price dependent on the generation costs of the highest cost power station supplying electricity to the pool at any half hour period during the day, i.e. the price of electricity can vary 48 times a day.

 

3.2 Electricity

ePub

CHAPTER 3

Energy Purchasing

3.1   Introduction

The purchase of energy is an action which does not in itself contribute to saving energy but can have a considerable impact on energy costs. Since deregulation of the energy market began the opportunity for large, and now not so large, consumers of energy to negotiate with energy suppliers has led to considerable savings for many organisations.

An assessment of the effectiveness of energy purchasing within the organisation should be the first step in any energy cost reduction programme.

3.2   Electricity

Purchasing electricity at the best available rates is not a simple task and is becoming increasingly complex in the latter half of the 1990s. Increasing demands are being made on the buyer and the answers can no longer be found in the tariff brochures issued by the local suppliers, the Regional Electricity Companies (RECs).

The RECs buy their electricity from an electricity pool operated by the National Grid Company. Electricity generators, such as Powergen, supply electricity to the pool at a price dependent on the generation costs of the highest cost power station supplying electricity to the pool at any half hour period during the day, i.e. the price of electricity can vary 48 times a day.

 

3.3 Gas

ePub

CHAPTER 3

Energy Purchasing

3.1   Introduction

The purchase of energy is an action which does not in itself contribute to saving energy but can have a considerable impact on energy costs. Since deregulation of the energy market began the opportunity for large, and now not so large, consumers of energy to negotiate with energy suppliers has led to considerable savings for many organisations.

An assessment of the effectiveness of energy purchasing within the organisation should be the first step in any energy cost reduction programme.

3.2   Electricity

Purchasing electricity at the best available rates is not a simple task and is becoming increasingly complex in the latter half of the 1990s. Increasing demands are being made on the buyer and the answers can no longer be found in the tariff brochures issued by the local suppliers, the Regional Electricity Companies (RECs).

The RECs buy their electricity from an electricity pool operated by the National Grid Company. Electricity generators, such as Powergen, supply electricity to the pool at a price dependent on the generation costs of the highest cost power station supplying electricity to the pool at any half hour period during the day, i.e. the price of electricity can vary 48 times a day.

 

3.4 Oil

ePub

CHAPTER 3

Energy Purchasing

3.1   Introduction

The purchase of energy is an action which does not in itself contribute to saving energy but can have a considerable impact on energy costs. Since deregulation of the energy market began the opportunity for large, and now not so large, consumers of energy to negotiate with energy suppliers has led to considerable savings for many organisations.

An assessment of the effectiveness of energy purchasing within the organisation should be the first step in any energy cost reduction programme.

3.2   Electricity

Purchasing electricity at the best available rates is not a simple task and is becoming increasingly complex in the latter half of the 1990s. Increasing demands are being made on the buyer and the answers can no longer be found in the tariff brochures issued by the local suppliers, the Regional Electricity Companies (RECs).

The RECs buy their electricity from an electricity pool operated by the National Grid Company. Electricity generators, such as Powergen, supply electricity to the pool at a price dependent on the generation costs of the highest cost power station supplying electricity to the pool at any half hour period during the day, i.e. the price of electricity can vary 48 times a day.

 

3.5 Equipment

ePub

CHAPTER 3

Energy Purchasing

3.1   Introduction

The purchase of energy is an action which does not in itself contribute to saving energy but can have a considerable impact on energy costs. Since deregulation of the energy market began the opportunity for large, and now not so large, consumers of energy to negotiate with energy suppliers has led to considerable savings for many organisations.

An assessment of the effectiveness of energy purchasing within the organisation should be the first step in any energy cost reduction programme.

3.2   Electricity

Purchasing electricity at the best available rates is not a simple task and is becoming increasingly complex in the latter half of the 1990s. Increasing demands are being made on the buyer and the answers can no longer be found in the tariff brochures issued by the local suppliers, the Regional Electricity Companies (RECs).

The RECs buy their electricity from an electricity pool operated by the National Grid Company. Electricity generators, such as Powergen, supply electricity to the pool at a price dependent on the generation costs of the highest cost power station supplying electricity to the pool at any half hour period during the day, i.e. the price of electricity can vary 48 times a day.

 

4.1 Introduction

ePub

CHAPTER 4

Energy Audits and Surveys

4.1   Introduction

Together with routine monitoring, energy audits and surveys are key elements of a good energy management strategy because they provide the information needed to ensure that energy is managed properly by an organisation.

Energy may often only be a relatively small percentage of an organisation’s expenditure but it is a controllable cost. Energy audits and surveys are essentially techniques to promote the effective control of energy consumption and costs by identifying where and how effectively energy is being used.

Many organisations have recognised that improving their control of energy use not only reduces operating costs but can also produce environmental benefits with consequent benefits in promoting an organisation’s activities. However, in reality cost control is normally the main driving factor behind the implementation of any energy efficiency measures. The financial benefits of energy efficiency therefore needs to be weighed against the cost and Chapter 6 gives more detail on the financial analysis of energy efficiency projects.

 

4.2 Energy Audits

ePub

CHAPTER 4

Energy Audits and Surveys

4.1   Introduction

Together with routine monitoring, energy audits and surveys are key elements of a good energy management strategy because they provide the information needed to ensure that energy is managed properly by an organisation.

Energy may often only be a relatively small percentage of an organisation’s expenditure but it is a controllable cost. Energy audits and surveys are essentially techniques to promote the effective control of energy consumption and costs by identifying where and how effectively energy is being used.

Many organisations have recognised that improving their control of energy use not only reduces operating costs but can also produce environmental benefits with consequent benefits in promoting an organisation’s activities. However, in reality cost control is normally the main driving factor behind the implementation of any energy efficiency measures. The financial benefits of energy efficiency therefore needs to be weighed against the cost and Chapter 6 gives more detail on the financial analysis of energy efficiency projects.

 

4.3 Energy Surveys

ePub

CHAPTER 4

Energy Audits and Surveys

4.1   Introduction

Together with routine monitoring, energy audits and surveys are key elements of a good energy management strategy because they provide the information needed to ensure that energy is managed properly by an organisation.

Energy may often only be a relatively small percentage of an organisation’s expenditure but it is a controllable cost. Energy audits and surveys are essentially techniques to promote the effective control of energy consumption and costs by identifying where and how effectively energy is being used.

Many organisations have recognised that improving their control of energy use not only reduces operating costs but can also produce environmental benefits with consequent benefits in promoting an organisation’s activities. However, in reality cost control is normally the main driving factor behind the implementation of any energy efficiency measures. The financial benefits of energy efficiency therefore needs to be weighed against the cost and Chapter 6 gives more detail on the financial analysis of energy efficiency projects.

 

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