Energy Management Process for Businesses

Abstract

Energy use is a large, but mandatory, expense incurred by manufacturers or facility operators and contributes to Greenhouse Gas (GHG) emissions. Depending on the type of business, energy cost can range from less than 1 % of operating expense to more than 30 %. Additionally, energy use in facilities and operations accounts for 66 % of the total greenhouse gas emissions, with transportation being the remaining 34 % of GHG emissions. Although the expense may be a small portion of operating expense, the cost and environmental impact is significant for many companies. As an example, at General Motors (GM), although the expenditure for energy is less than 1 % of total expenses, the cost is in excess of $1 Billion USD annually. Regardless of any view on climate change, with buildings and facilities being the majority of carbon emissions and the recent reduction emphasis at the United Nations framework convention on climate change, “COP-21” creating international attention from investors and customers, managing GHG emissions has become an important part of business. Hence, a robust Energy Management process is needed to meet the fiscal and environmental responsibility of businesses to remain sustainable and satisfy investors’ and customers’ demands. Management of energy and carbon to reduce environmental impact is important enough to be included in the company’s business plan, similar to safety, people, quality, and cost. Following a model similar to EPA Energy Star’s seven step approach, based on Plan, Do, Check, Act methodology (PDCA), energy management can be integrated into a company’s standard business plan. This requires top level commitment, resources, business planning, goals, and recognition to manage energy and GHG reductions. The methods used to integrate energy management into the business plan include dedicated resources at all levels in the organization. With people as one of most important resources, having qualified energy leaders at the corporate, global, regional and site levels is key to success. To implement initiatives a dedicated budget for systems and projects is required, similar to other areas of the business. Forecasting energy, establishing targets, implementing projects and processes, regular monitoring, and corrective action when required ensures timely adherence to meeting energy and carbon goals. Recognition can be internal with various processes—Plant energy performance recognition, employee suggestions, employee compensation tied to business results, and others, as well as external. The U.S. Environmental Protection Agency (EPA) Energy Star® certifies plants and facilities similar to laptops and refrigerators. Additionally, Energy Star’s® Challenge for Industry provides recognition for plants reducing energy intensity by 10 % within five years. The Energy Star®, also sponsored by the Department of Energy (DOE) Partner of the year award in Energy Management, is EPA’s highest award for exemplary performance.