An energy management plan is a strategic opportunity to outline steps to manage and optimize a site’s energy usage. The plan is also a chance for organizations to take greater control of their operational costs, resiliency in the face of energy outages, and a more strategic response to regulatory requirements. An energy management plan pushes companies of all sizes to prioritize the benefits of reduced energy usage and creates a clear pathway for obtaining them. In general, this plan may include:
- Current assessment and benchmark of existing properties comparing the performance and efficiency of properties with similar characteristics.
- Goals for optimizing performance and efficiency of the property or processes included.
- Suggested opportunities to optimize conditions to stay ahead of regulatory changes.
- Financial analysis of prioritized opportunities to take.
- Prioritized step-by-step actions to operate a more energy efficient and resilient system.
- An annual assessment of achievements and progress towards goals.
Despite its benefits, not every organization has an energy management plan in place. Organizations focused on their core business challenges may not feel they have the time to devote to creating a plan. Some organizations may feel they’re too small for an energy management plan to have an impact. However, with the right partner in place, a plan can make a tremendous impact on any organization’s success and core business values.
Why all businesses should have an energy management plan
Aside from the clear carbon and greenhouse gas emission reduction benefits that come with energy efficiency implementation, there are a wide range of operational benefits to having an energy management plan. Below are the top four reasons that all businesses should have an energy plan:
- It drives greater resiliency: With power grid outages and extreme weather becoming increasingly problematic to various areas of the country, resiliency is becoming even more critical. An energy management plan can give organizations greater awareness of what’s happening on their sites, the potential hazards, and mitigation options for more resilient energy resources. For organizations that use large amounts of water, such as water agencies and wastewater treatment plants, an energy management plan might also include improvements that relates to the organization’s water and energy usage and their relationship with each other, a relationship known as the water energy nexus.
- It keeps you ahead of regulatory changes: Many states are already passing regulations driving certain organizations to reduce their greenhouse gas emissions or reduce their energy usage. These requirements and the cost to implement resulting strategies will only increase in the future. Developing an energy management plan today gives companies greater control in how they manage and fund these changes. Increased electrification requirement by many local authorities is a resent example of this. A well thought out energy plan will include fuel switching options and resources to balance the change in cost between different fuels.
- It boosts competitiveness in sustainable markets: The demand for sustainable businesses continues to increase. Research from NYU Stern’s Center for Sustainable Business into U.S. consumers’ purchasing of consumer packaged goods (CPG), for example, found that half of CPG growth from 2013 to 2018 came from sustainability-marketed products. What’s more, researchers found that those products marketed as sustainable grew 5.6 times faster than those that were not. In more than 90% of the CPG categories, sustainability-marketed products grew faster than their conventional counterparts.
It’s in organizations’ best interest to “go green” to remain competitive in the market going forward. Every energy management plan should include strategies for publicizing your energy improvements to all stakeholders, including potential employees.
- It helps ensure financial success: An energy management plan includes a financial analysis that helps organizations understand how much money is spent on energy and where they might be overspending. It includes details whether it’s more cost-effective to replace or repair equipment in the event of a failure, helping organizations become more proactive in managing their maintenance costs.
Perhaps most importantly, this financial analysis includes details on how to finance these improvements. In some cases, even minor improvements can lead to cost savings that can pay for additional future improvement. In other cases, there may be federal, state, or utility incentives, loans or grants available to fund equipment upgrades. Having a plan in place ensures that organizations do not miss out on these opportunities when they’re available.
An energy management plan affords organizations proactive control over each of these areas, rather than letting companies react to change when costs are higher.
What to include in an energy management plan
A strategic energy management plan is likely to begin with a kickoff meeting to pull together details about existing conditions and processes and identify specific opportunities to set goals for improvements. Goals might range from slashing energy costs to switching from natural gas to electricity or even delivering more sustainable products to customers at a net negative carbon footprint.
The next step would be a site audit, during which an engineer would walk the site with the site manager or maintenance supervisor to gain more information about the existing equipment, processes, and opportunities discussed during the kickoff meeting.
Once a site’s baseline energy usage is documented, it can be benchmarked against similar processes and building types to give organizations better understanding of their energy usage as compared to their peers and competitors. This can give businesses a greater sense of where and how much they can improve. Benchmarking tools such as ENERGY STAR’s Portfolio Manager can be utilized to also meet regulatory requirements.
Finally, an energy management plan would be created that accounts for specific equipment retrofits, process changes and other specific actions to take as well as estimated timelines to implement these actions. An energy management plan might look only two or three years out, while some organizations might put a 10-year plan in place. This would depend on the industry and the age of the facility in question.
Depending on how involved your plan, the process of gathering data to create an energy management plan may happen in just a few weeks. However, these plans should be reevaluated on a regular basis. This gives organizations an opportunity to evaluate what has worked and what hasn’t, what can be improved, and how any emerging or new technologies could help you better meet your goals. While the frequency of this reevaluation can be defined in the plan, Lincus recommends this happen at least once a year.
How to ensure your energy management plan succeeds
Creating an energy management plan may take only a small investment in time, but it should also serve as the first step to a greater commitment to sustainability. Organizations are more likely to see these plans through to fruition when they are able to create a culture that prioritizes energy efficiency and resiliency.
This works best when management buys into the benefits of an energy management plan and then takes time to clearly communicate this this importance to employees throughout the organization. Clear communication on the importance of these energy efficiency initiatives and how they can affect each part of the business builds awareness and can go a long way toward creating a culture of change.
It’s much easier to see this momentum through to the end when working with a partner who can help drive these improvements forward. If you’re ready to take the first steps toward developing an energy management plan that can help your organization, contact Lincus today.