For organizations seeking to decarbonize their operations, focusing on reducing emissions associated with owning, operating or occupying buildings is a logical place to start. After all, approximately 40 percent of global CO2 emissions come from the built environment.
Energy efficiency is one of the most attractive levers organizations can use to reduce emissions from the built environment, because not only can this strategy deliver significant emissions reductions, it can also deliver significant cost savings. Energy management is the process of monitoring, controlling, and minimizing energy consumption, but the process is not without challenges.
On this page, we outline practical steps to implement and run a successful energy management program within your own organization.
Decarbonization – a practical guide to demand-side energy management
After the press releases and the pledges, it is the sustainability and operations teams within organizations that make ambitious decarbonization targets a reality.
Herein lies the challenge; how to execute a successful strategy at scale to achieve significant carbon reductions within the shortest period, at the lowest cost. There is no single solution, and the nature of the business will also dictate the end goal and the path taken, but there are common threads in every emissions reduction plan. Organizations can use a combination of efficiency improvements, renewable energy purchases, emissions reduction projects, and carbon offsets, to achieve emission reductions targets, which we represent in a simplified waterfall chart.
When planning to reduce emissions from buildings, organizations have two primary levers they can pull:
- On the demand side, organizations may use a combination of efficiency improvements, plant and equipment upgrades, fuel switching and on-site renewables such as solar PV.
- On the supply side, renewable energy purchases, and carbon offsets may be used to meet emission reductions targets.
In this material, we focus on the demand side of this equation and outline the role of energy efficiency in emission reduction for organizations. We provide robust, field-tested guidance to implementing a comprehensive, effective demand-side energy management strategy to help organizations achieve their decarbonization goals.
The role of energy efficiency in your carbon reduction plan
Demand-side energy management is the process of monitoring, controlling, and minimizing energy consumption. The goal is to improve energy efficiency, which can be achieved by driving operational and behavioral efficiency and upgrading aged plants and equipment with more efficient models.
In addition to emissions reduction, energy efficiency improvements can deliver other outcomes including:
- Reduced energy bills and other operating costs (efficiency improvements often pay for themselves very quickly)
- Enhanced energy security
- Improved capacity to meet regulatory requirements
- Improved occupant comfort, health, and productivity.
While there have been major strides made to improve energy efficiency over the past decade, effective energy management has been notoriously difficult to implement, and significant additional opportunities for improvement remain. These opportunities are accessible across a range of building types and sectors including office, retail, education, industrial, accommodation, and health care.
Some of the challenges have been addressed with the increase in data availability and the introduction of specialist software that can utilize data to identify opportunities and track and monitor the success of initiatives.
However, software and data alone will not deliver the outcomes required. Enduring energy efficiency improvements require a transformation across the entire organization, underpinned by a broad change management exercise involving people and processes as much as it involves technology.
Steps for executing a successful demand-side energy management solution
Based on over a decade of experience working with blue-chip enterprise clients, we have observed and documented the approach leading organizations adopt to improve energy efficiency. The following steps describe how to successfully execute a demand-side energy management program that strategically applies software technology, people and process to significantly reduce the demand for energy and resultant emissions across an enterprise.
1: Set a mandate for energy efficiency
Like any successful enterprise-wide initiative, an energy management program must be directly linked to the organization’s emissions reduction targets and be supported by a clear mandate for energy efficiency agreed to and communicated by the executive team.
Targets need to be meaningful; to help achieve this they should be broken down by timeframe and level within the organization. Annual targets are difficult to track, they can be made more meaningful by breaking them down into months, and even weeks where possible. Targets should then be cascaded to the business unit or functional level so that teams are incentivized to integrate energy management practices into their daily operations, including setting KPI’s and reviewing them regularly.
If your organization runs an Environmental Management System, you should ensure energy use is included as an aspect to be controlled.
2: Build effective teams
Key management personnel must be engaged, and responsibilities for achieving targets must be allocated to those that will oversee the implementation and ongoing operation of the energy management program. Based on internal capabilities, experience, and availability, decisions need to be made about which workstreams need to be outsourced to specialist consultants or service providers. Each team member must have a clear understanding of their responsibilities and have access to the resources and funds to drive outcomes.
Implementation Project Team
Responsible for building the data foundation.
- Dedicated project manager on the client-side to bring together both internal and external stakeholders.
- Site-level operational staff to collate facility-level information and identify energy data sources.
- Existing services contractors to enable and configure automated data feeds from metering systems.
- Software technology partner to integrate all the data sources into a single energy management platform.
Operational Execution Team
Leads the ongoing implementation of efficiency measures and performance monitoring.
- Dedicated manager client-side to mobilize site-level staff and contractors as required.
- Internal operations and engineering staff and/or specialist consultants or service providers.
- This team must have a sufficient level of ‘building services’ domain knowledge and experience, as building systems can be complex.
3: Collect facility data
The energy intensity of your portfolio is heavily influenced by the size, type, primary use, and operating characteristics of your organization’s facilities.
It is important to capture facility data to contextualize all energy-related data at the software layer and provide a basis for performance analysis, benchmarking, and comparison over time. This information can also assist in identifying energy data sources.
Specific examples of facility data include:
- Building location
- Building type and primary use
- Building floor area and number of levels
- Building occupancy %
- Production data
- Building operating schedule(s)
- Building occupancy schedule(s)
- Building major load types e.g., HVAC, refrigeration, lighting, other.
- Number of main utility meters (electricity, gas, water if relevant)
- Annual energy consumption and spend
- Details of existing sub-metering infrastructure (if relevant)
- Details of planned capital upgrade projects impacting energy performance
- Details of recent energy audits or performance assessments e.g., NABERS
- Contact details of facility operations staff and key services contractors
4: Identify key energy data sources & automate data capture
Data gathering for energy management is best approached with a ‘top down’ process, starting with high-level information such as energy bills, working through to more detailed data in a structured way. Each new level of detail will provide useful insights and build an understanding of energy and its relationship to building activities based on accurate data rather than anecdotal assumptions that may be inaccurate.
The frequency with which data is available can also impact the sophistication of analysis and opportunities to respond to energy wastage. For example, monthly bills provide an overview of energy consumption and support the identification of long-term trends. However, interval data (e.g., energy data showing energy consumption every 15 minutes) can allow for deeper analysis and enable corrective measures to be implemented more quickly.
The mix of energy-related data sources available across your portfolio to support enterprise energy management will vary depending on the type and size of your organization’s facilities.
These data sources may include:
- Energy retailers
- Utility data services organizations
- Energy consumption over time
- Breakdown of costs
- Energy retailers
- Meter data agents
- Meter operators
- Utility data services organizations
- Electricity use broken down into 15 or 30 minute intervals
- Site-based energy systems
- Building management systems
- Asset registers
- Shows breakdown of energy consumption in different parts of the building
- Site-based inverters
- Cloud applications
- Asset registers
- Local weather stations
- Cloud-based weather data service providers
Monthly or quarterly utility billing data may be all that is available for portfolios of smaller buildings, while high-resolution utility meter data, including sub-meter data, may be accessible for portfolios of larger buildings.
Always try to access interval meter data wherever possible, as this provides the most granularity and insight into energy performance and enables more sophisticated energy intensity benchmarking.
In the case of sub-meters, look to monitor meters that segregate the major loads within facilities as this enables a deeper level of analysis to be performed at the software layer when poor-performing facilities are identified.
Common major load types for segregation include:
- Base building vs. tenant (if applicable)
- Heating, Ventilation and Air Conditioning (HVAC)
- Lifts and escalators
- IT equipment
- Solar PV and battery storage
- Other major loads
For any enterprise energy management solution to be scalable and efficient, all data from energy sources, including weather data, utility billing data, and meter data, should be automatically transferred and captured.
Files containing time-series interval data from main utility meters can often be sourced from your utility providers or meter data agents on a daily basis. Files containing interval data from sub-meters may be sourced from the site-based energy management systems at regular frequencies by leveraging existing reporting functionality or third-party gateway devices.
It is essential that data is transmitted from reliable sources and remains complete and accurate to ensure the ongoing integrity of your enterprise energy management solution. Ensure you have a robust process in place for identifying erroneous account or meter readings and notifying the correct personnel so that issues can be quickly diagnosed and rectified.
5: Deploy Energy Management software
Energy Management software can integrate and organize data from multiple sources across your enterprise and provide a range of specialist applications to support the real-time monitoring, analysis, and reporting of energy consumption, cost, and emissions. Storing and managing this data in a single system of record, accessible to all stakeholders, displayed in a way that is useful to those responsible for energy efficiency means software becomes the eyes and ears of the Operations Team as they work to continuously drive down consumption and emissions.
Advances in data analytics mean the software can now perform the heavy lifting and automate traditionally labor-intensive analysis and reporting practices such as periodic manual audits – delivering more accurate information, and saving considerable time and money.
Next-generation Energy Management software like Envizi can correlate high-resolution meter data, weather, facility metrics, and operating schedules to normalize and benchmark energy intensities and identify facilities with the highest savings potential. You can then use the software to detect anomalies in energy usage patterns, identify likely issues based on a series of rules, and alert operations staff in real-time.
If emissions reduction is your organization’s goal, it makes sense to select Energy Management software that integrates with your ESG software platform. There are multiple synergies between the types of data required and having the data all in one system makes it easier to quantify the impacts of sustainability initiatives and emissions reduction programs to provide transparency, an audit trail, and accountability.
6: Develop a plan and implement energy efficiency measures
With the team engaged, enterprise Energy Management software in place and data capture automated, any plans and tactics can be informed by data-driven insights and supported by an engaged team.
Typical tactics may include:
Operational Efficiency Opportunities (OPEX)
OPEX, tuning or optimization measures are often low cost/high savings measures.
- HVAC controls – Adopt advanced control sequences to optimize energy use, such as optimum start/stop, economizer control, temperature and pressure reset strategies, and plant staging strategies.
- HVAC maintenance – Use software like Envizi to identify components operating out of spec. Ensure preventative maintenance is undertaken on energy-intensive equipment to maintain optimum performance and efficiency.
- Occupant and operator behavior – Train building occupants and operators to conserve energy wherever possible by switching off HVAC, lights, and appliances when not in use and maintaining efficient comfort set-points that reflect outdoor conditions, etc.
- Electrical appliances – Ensure plug loads are switched off when not in use and power-saving modes are activated for computer monitors.
- Lighting and blind controls – Automating switching and diming based on occupancy and maximizing the use of natural lighting with blind control. Switch off common area lighting when possible. Automated blinds can also reduce solar heat gain during the summer months.
- Water heaters – Apply automated controls to switch off water heaters and recirculating pumps to reflect occupancy.
- Building envelopes – Rectify air leakages around external doors and windows.
Plant and Equipment Upgrade Opportunities (CAPEX)
Every time CAPEX is being used replace and upgrade equipment at end of life presents an opportunity to improve energy efficiency. Ensure the CAPEX process checks the business case on the most efficient technology available every time. Lifecycle upgrades are also an opportunity to check the design of the system to see if there’s a better way to deliver the required energy service.
LED lighting – Replace conventional lighting technologies such as incandescent, halogens and compact fluorescent lamps with LEDs to deliver efficiency improvements in the range of 80%
- Space heating – Replace aging and inefficient boilers (<80%) with high efficiency condensing boilers (90-90%) or look to electrify space heating if electricity is sourced from renewables.
- Space cooling – Replace aging and inefficient chillers (COP <3) with high-efficiency variable frequency chillers (COP>6). Size chillers for optimum efficiency during part load.
- Induction motors – Retrofit Variable Frequency Drives on fans and pumps wherever possible and consider replacing aged motors with Electronically Commuted (EC) motors.
- Air handling systems – Convert constant volume AHU’s/RTU’s to variable volume if heating and colling loads vary throughout the day or season. Leverage free cooling from outdoor air wherever possible.
- Supplementary air conditioning – Consider installing dedicated high-efficiency heat pumps where possible
Building envelopes – Consider installing window film or replacing windows with high-performance glass (high R value). Assess potential to improve external wall insulation and shade windows during the summer months.
7: Embed process to drive continuous improvement
A formal business process and a robust framework must be established to ensure your energy management program remains effective and sustainable over the longer term.
Key activities to establish systems and procedures to support continuous improvement of energy performance over time include:
- Energy analysis: Regularly analyze energy data and insights from your Energy Management software to identify issues and opportunities for improvement. Promote the best opportunities based on return on investment.
- Stakeholder engagement meetings: Regularly bring together key stakeholders at the facility level to review and discuss the promoted issues and opportunities resulting from the Energy Analysis. Assign tasks to owners for investigation and resolution.
- Implementation of energy conservation measures: Operational staff and relevant trade contractors work to investigate issues and opportunities and execute fine-tuning and equipment upgrades as required to achieve the desired energy reductions.
- Savings verification: Independently measure and verify the impact of any action taken and assess the annualized energy and cost savings resulting from the improvements. Provide feedback to the execution team.
- Performance reporting: Prepare a performance report on a regular basis that details the most significant issues and opportunities identified to-date, their current status, and the annualized energy and cost savings achieved. Distribute this report to the management and executive teams to provide transparency and demonstrate the results being achieved.
Your organization’s Operations Team should be responsible for driving the process and engaging with all key stakeholders to ensure the insights and opportunities identified from your people and Energy Management software are converted into tangible energy, cost, and emissions reductions. This process is a continuous cycle and governance over the process is essential.
A suitable governance strategy should cover the following topics:
- How often is energy performance to be reported to management?
- Who is responsible for setting the next target?
- Who is responsible for reviewing the energy management system for continuous improvement?
- Are energy efficiency targets included in relevant job descriptions?
- Are energy efficiency targets included in relevant sub-contracts (especially HVAC)
Delivering on low carbon pledges requires a coordinated approach across the organization. There are a variety of strategies that can be employed to reduce emissions, but focusing on the built environment first is a robust strategy given that over 40% of carbon emissions worldwide arise from owning, occupying, or operating buildings.
Demand-side energy management is a well-tested approach to reducing emissions from the built environment and is particularly effective when combined with advanced software tools. But like many business processes, the delivery of successful outcomes is contingent on successful execution.
This step-by-step approach will support organizations to deliver a well-developed and executed enterprise energy management strategy combining people, process, and software that will deliver enduring emissions reductions.