The Ultimate Guide to Business Energy Management
Welcome to our Ultimate Guide to Business Energy Management. This guide does not go into the finer details of engineering or finance. Its purpose is to explain the general concepts involved in systematic energy management.
This guide is for you if:
1. You’re looking for a high-level introduction to energy management
2. You’re at the early stages of your career as an energy professional
3. You’d like a refresher on the broader concepts of energy management
Our Ultimate Business Energy Management Guide now comes in the form of a FREE EBOOK. Click the link below if you’d like to download it.
What is business energy management?
Business energy management is simply the process of improving energy efficiency within an organisation.
What’s the difference between energy management and energy efficiency?
The terms energy management and energy efficiency are often confused, but they do have different meanings.
Energy efficiency is the use of the minimum amount of energy required to maintain a certain level of activity or service. In other words, energy efficiency is all about doing more with less. For example, a compact fluorescent bulb is more energy-efficient than a traditional incandescent bulb as it uses much less energy to produce the same amount of light.
Energy management, on the other hand, describes the continuous effort to improve energy efficiency within an organisation. Energy management can take many forms and involve all types of interactions with energy, including procurement, technological improvements and behavioural changes.
Why is business energy management important?
Business energy management is important for many reasons. But, typically an organisation has one or two motivations for taking it seriously.
Some businesses simply want to reduce their energy usage to save money. After all, in many business sectors, energy is one of the highest controllable costs.
According to the UK government, savings of 39% were achievable through efficiency improvements across all non-domestic buildings in England and Wales in 2014. This figure is equivalent to £3.7 billion that businesses could have saved on their energy bills. This figure gives you an idea of how much money businesses could save by reducing their energy consumption.
Energy consumption remains a principal source of human-caused greenhouse gas emissions, the predominant cause of climate change. Therefore, there is pressure on everyone to be more efficient with their energy use.
In 2018 alone, carbon dioxide emissions from the business sector were estimated to be 65.9 million tonnes and accounted for around 18% of all carbon dioxide emissions in the UK. Put simply; businesses need to do their bit if we’re to limit some of the worst effects of climate change.
Although some businesses are somewhat proactive in their approach, many just aim to comply with the regulatory frameworks that exist, such as the Energy Savings Opportunity Scheme (ESOS). However, many experts believe this isn’t enough and think more needs to be done to reach carbon targets.
Another principal reason for businesses opting to manage their energy is to reduce risk. Energy prices are extremely volatile. This is highlighted by the cost of energy in the UK doubling between 2005 and 2018.
The International Energy Agency expects this trend to continue, as the global population continues to grow and energy demand increases. Many businesses attempt to improve their energy efficiency because it’s a good way to safeguard against volatile energy prices.
Some businesses are driven to manage their energy by one of these factors. Others are driven by a combination. These are not the only benefits of energy management for a business. Check out our full post to find out more.
How to manage business energy?
Introduction to Plan Do Check Act
At Surple, we think a systematic approach to business energy management is important if you want to have a significant impact. We recommend following the Plan Do Check Act (PDCA) framework.
The PDCA cycle has been designed to drive continuous improvement in regards to business energy management.
PDCA also happens to be the operating principle of all ISO management system standards, including ISO 50001. If you haven’t heard of ISO 50001, it is the International Operating Standard for energy management. Its purpose is to support organisations in all sectors to improve energy efficiency through the development of an energy management process.
Further reading: ISO 50001 »
Stage #1: Plan
There are two main aims of the ‘Plan’ stage. The first is to get a better understanding of how your business uses energy. The second is to form a strategy that uses this knowledge to inform actions that will improve energy efficiency.
Start with a business energy policy
We recommend that the first step to take on your energy management journey is to develop an energy policy.
An energy policy is a document that sets out your organisation’s aims concerning energy use and management.
Your energy policy should have three main sections:
A statement about your organisation’s pledge to energy management and ongoing energy improvement.
“We are committed to responsible energy consumption and will practice energy efficiency throughout all of our sites and equipment, wherever it’s cost-effective.”
These are your high-level energy management aspirations. Everything your company does in terms of energy management should align with at least one of your objectives.
“Minimise greenhouse gas emissions.”
“Reduce total energy usage.”
Specific activities your business will undertake to achieve your objectives.
Example – If your objective is to reduce the environmental impact of your energy consumption, an immediate aim could be to “switch to a renewable energy supplier by the end of the year”.
Writing an energy policy for the first time can be difficult. That’s why we’ve written an in-depth guide to help you write yours. We’ve even included a handy template to help you get started.
Go to guide: Writing an energy policy for your business »
Get set up with the right tools
Now you’ve got an energy policy, it’s time to get stuck into some energy management projects, right? Not quite.
We recommend that the next step you take is to get some energy management software.
Energy is a resource. And just like other resources, businesses need to understand how they use it. Energy management software helps you understand your energy use by automatically importing your utility data and providing you with valuable insights.
Energy management software can also help to streamline your workflow and automate repetitive tasks. Some advanced systems even allow for energy to be analysed alongside external factors such as weather. For more information on the full benefits of energy management software, check out this post.
Keep reading: Full benefits of using energy management software »
Just to be transparent, we do sell an energy management solution. You can read about its features here. If you’re interested in the software, simply book a demo by clicking the link below and we can get you set up.
Conducting an energy review
Now you’re set up with an energy management tool, you can perform an energy review.
The purpose of an energy review is to get a better understanding of your energy consumption patterns and to identify more energy-intensive areas of your business.
All energy management solutions are different, but most will have similar tools that can help you to identify savings opportunities.
Two things to look out for when conducting your review are operational inefficiencies and building inefficiencies.
In Surple, a good way to identify operational inefficiencies is to use the Analytics page. Look for specific days of the week or periods within a day where you may be consuming too much. Maybe, you’re consistently using too much energy at the start of the day? Or perhaps you do not see a big enough drop in energy use at the end of the workday? Make a note of these issues as they’ll be useful in the next stage of planning.
Leaderboards are an excellent way to identify building inefficiencies. In Surple, you can use the leaderboard and the map on the Sites page to see your highest consuming sites. Typically larger buildings will use more energy. Therefore, remember to utilise the normalisation operators such as area in sq ft for fairer analysis.
Your first energy review doesn’t have to be especially detailed. But, at the end of your review, you should have an idea of the buildings and processes where improvements can be made.
Design your energy strategy
Now you understand how your business uses energy, it’s time to set some specific actions that will help you to achieve the objectives outlined in your policy.
We’re going to call this your energy strategy. You should design your energy strategy as an action plan. You should include as much detail as possible for each action. Some details to record could include a description of the project, the budget available, any relevant stakeholders and savings projections.
As an example, say you set an objective to “to reduce total energy consumption” in your energy policy. And during your energy review, you noticed that a site was using an unusual amount of energy outside of operating hours. A good action to include in your strategy could be to review the shutdown procedure for that site to work out what’s going on. Another worthwhile task might be to do a site visit to see if there’s any faulty equipment causing a problem.
Frequently these tasks will inform new actions to include in your strategy. For example, a site visit might reveal that the site still uses incandescent lightbulbs. If so, an LED retrofit would be a great action to add to your energy strategy.
The way you manage your strategy is entirely up to you. There’s no perfect way to do it and strategies vary dramatically from business to business. However, there are some best practice tips you can follow when designing one. Read our post for more information.
Stage #2: Do
The ‘Do’ stage of the framework is where you complete the actions outlined in your energy strategy.
Changes are typically either people, process or technology-focused. They can also be categorised as low-cost, medium-cost or high-cost.
There’s nothing wrong with starting small
Since you’re reading this guide, this is probably your first time taking business energy management seriously. We know it can be difficult to decide where to start.
We recommend starting small with no-cost or low-cost actions. Within this category, there’ll likely be a whole host of energy-saving opportunities that will not only be easy to implement but will also save you a lot on your energy bills. If your organisation is large enough, these small wins can quickly add up.
One of the easiest places to start is replacing incandescent bulbs with LEDs. LEDs use over 75% less energy than incandescent lighting, and they don’t burn out like halogens or incandescents. This means with normal usage of six to eight hours a day your LED bulbs could last for 15 years. LEDs are fantastic because they save you money on your energy bills but also on the cost of replacing broken bulbs. Lighting projects also tend to have a relatively short return on investment period, making it a great place to start.
Keep reading: Simple ways to save energy in your business »
Keeping employees engaged
In many businesses, such as those in the hospitality sector, it’s often people and their behaviours that drive energy demand.
This means effective energy management will often require continuous support from your organisation’s employees.
Keeping employees engaged has two main benefits. Firstly, it can create a common sense of purpose that encourages them to take responsibility for solutions. Secondly, people working in specific areas of an organisation are the ones most likely to identify potential issues and opportunities in those areas.
In your energy review, you may have noticed that electrical devices get left on at the end of the workday in one of the offices. You don’t work in this building frequently. Because of this, you decide to provide employees with some training.
If the employees don’t stay engaged with the programme, the whole thing will be a waste of time. But, if they do stay engaged, you’re likely to notice a visible decrease in the amount of energy wasted overnight.
One popular way to keep initiatives on track is to assign responsibility to an energy champion. Another popular way of maintaining employee engagement is to promote competition between different departments.
Some energy consultancies such as JRP Solutions offer energy training services. Check out their page for more information.
Find out more: Energy training services »
Stage #3: Check
Okay, you’ve gone out there and implemented some energy management initiatives. Great work! Maybe you’ve upgraded your lighting or run a behaviour change campaign with your employees.
Now it’s time to see if they worked.
In the ‘Check’ stage, you should compare actual energy consumption to the objectives outlined in your energy strategy.
The idea is to determine whether or not the organisation is on track with energy management goals and should highlight any projects or processes that still need to be improved.
Introduction to Measurement and Verification
Measurement and Verification (M&V) is a process commonly used to quantify savings delivered by an energy conservation measure (ECM).
Importantly, M&V demonstrates how much energy the ECM has saved, rather than the total cost saved. This is important because costs can be affected by other factors, such as energy prices.
The M&V process enables energy savings delivered by an ECM to be isolated and evaluated fairly. Various protocols for good practice in M&V exist, including the International Performance Measurement and Verification Protocol (IPMVP), which defines common terminology and the key steps in implementing a robust M&V process.
We’re not going to go into the finer details of M&V in this guide but follow the link below if you’d like to find out more.
Further reading: M&V IPMVP »
How to actually measure and verify savings?
We understand that Measurement & Verification can get real complicated, really quickly. It’s easy to spend far too long on M&V when you could’ve spent half as much time and ended up with the same result.
Not too long ago, many energy managers used Excel to determine whether energy-saving actions resulted in savings. Many energy managers still do.
This was a time-consuming task with room for error. Fortunately, many energy management software solutions now allow you to understand the impact of an energy management project, quickly and easily.
At Surple, we believe that even a basic consideration of M&V is enough. We think at the end of the ‘Check’ stage it’s important that you have an idea:
1. Of whether the initiatives were successful
2. If they were successful, what were the approximate savings
Let’s go back to the LED retrofit as an example. This does not have to involve an in-depth assessment to determine energy savings. Instead, it can often be done reliably using just half-hourly data and an energy management solution. You could look at monthly energy use in a building before the retrofit and monthly energy use after the retrofit. Or, you could dive into more detail. It’s really up to you.
In Surple, you can log your energy-saving actions and analyse them using the Interventions feature. You can also use date overlays to analyse success.
One more thing. When you’re analysing the results of your initiatives, be sure to record any learnings made along the way. Maybe, there’s this one guy in the Marketing team that makes a brilliant energy champion. Maybe, you bought some LEDs from one supplier, only to find a much more affordable supplier the week after. These learnings will be valuable for the last stage of the framework.
Remember, Plan Do Check Act is all about continuous improvement. Not everything is going to be a resounding success, especially on your first attempt. Nevertheless, it’s essential to document your learnings as they can help you become a better energy manager when you start the cycle again.
Communicating savings to stakeholders
Likely, you’re not the only person in your organisation interested in the results of your energy management projects. Various stakeholders, such as your businesses CFO may also be interested in the outcomes.
The ‘Check’ stage of the framework is where you would communicate results to these stakeholders.
Fortunately, with the right energy management software solution, this doesn’t have to be complicated. In Surple, you can create your own report templates. You can then share these reports from within Surple or schedule them to be sent out at regular intervals via email.
Stage #4: Act
Congratulations! You’ve made it to the final stage of the framework. It’s now time to review the overall performance of your energy management strategy.
It’s all about continuous improvement
‘Act’ is the stage where the energy management loop closes. Using the learnings you have documented, you should now make the appropriate changes to your businesses energy policy and strategy.
Back to the start
Remember the Plan Do Check Act framework is a loop. Energy management doesn’t stop here. When you’re done with ‘Act’, go back to ‘Plan’ and design a new energy strategy full of actions that are more informed and impactful.
Well done! You’ve made it to the end of our ultimate guide to business energy management. Thanks so much for reading.
We’ve talked through a lot, but we hope you now have a better idea of where to start when it comes to improving the energy efficiency of your business.