Strategic Energy Management – Try Not, Do or Do Not

A couple months ago, I co-authored an AESP Strategies article with Diana Husmann from Nexant and Teri Lutz from Tetra Tech. The subject was non-residential behavior programs. One of the undercurrents that was revealed to me in that process is that strategic energy management, SEM, seems to get pigeonholed as a “behavior program”.

First, to digress a bit, every program is a behavior program. ACEEE summarizes these nicely in their Field Guide to Behavior Programs. A super summary of behavior elements are as follows, taken directly from that paper.

• Cognition programs focus on delivering information to consumers. Categories include general and targeted communication efforts, social media, classroom education, and training.
• Calculus programs rely on consumers making economically rational decisions. Categories include feedback, games, incentives, home energy audits, and installation.
• Social interaction programs rely on interaction among people for their effectiveness. Categories include social marketing, person-to-person efforts, eco-teams, peer champions, online forums, and gifts.

Can you think of any program that does not fall under one of these three broad categories? No. Even if a program type isn’t specifically listed, it falls under one or more of these broad categories.

Strategic Energy Management

Let’s break this down. Energy management includes a broad array of energy, demand, and money saving activities. It can include retrofits, operations and maintenance, retro-commissioning, training, and conditioning of any or all groups of stakeholders within an organization.

The word strategic derives from strategy. Strategy is wide open, all-inclusive, and has no limits. Conversely, it does not require an all-of-the-above punch list of items, activities, and requirements.

Merriam Webster uses the following for the definition of strategy:

a careful plan or method for achieving a particular goal usually over a long period of time

Really, the only piece required for a strategic energy management plan is a benchmark of some sort and documentation and maintenance of activities for the long haul – the “long period of time”.

Planning

We can go into any facility, and develop a strategic energy management plan.

• Facilities less than 10 years old present great opportunities for retro-commissioning (RCx). Why? Because all the parts are there, including the controls, and I guarantee there is plenty of waste to eliminate. A separate Rant on this is forthcoming.
• Older facilities can have a wide variety of needs: adding equipment, replacing equipment, installing new controls or expanding controls, or if it is well maintained like a hospital, the operations and maintenance and RCx may be good opportunities. It can include a combination of all of the above.
• For multiple-facility organizations the strategic energy management plan may include a benchmark and walkthrough of all facilities and prioritizing which ones to act on first.
• In all cases, non-energy factors must be weighed in. There may be pending equipment replacement needs or capital requirements for some things that have an impact on energy and need to be implemented primarily for non-energy reasons. Although not driven by saving energy, the opportunity to steer the project for energy savings is tremendous.

Any organization with an energy-saving or sustainability goal that is worth anything needs a strategic energy management plan. I’ve been frustrated at times when large organizations have fairly aggressive savings targets, and they decide to do things in-house. Translation: we’re going to tell people to turn the lights off, and we will install some soda machine controllers. My mental response: here is my card. Call me in two years once you see that isn’t going to get you to point B.

Certainly some customers have the capability in-house to do a good job. However, like our own firm, we have capability to handle all of our marketing, accounting, and IT tasks, but we still farm some things out. Why? Maybe we can better use someone else’s expertise; usually this translates to getting things done much faster and less expensively. This frees our staff for creative work that cannot be effectively or successfully outsourced.

Free Cash Flow

Aside from the non-energy factors, it is best to implement projects or activities that produce the largest positive cash flow first. I did not say the ones with the highest return on investment or fastest simple payback. I can’t reinvest years or percentages. I can only invest cash.

A few years ago, an outfit called the American College and University Presidents Climate Commitment was established. Signers of the commitment were agreeing to be carbon neutral in… a while. It says, “as soon as possible”. Strike one. That phrase invokes “try” or “plan to”. These words are not acceptable when we are talking about projects or corporate initiatives. Per Yoda, there is no try. You do or do not.

You can read the commitment yourself. It’s weak. The point of mentioning it, however, is that back then, we had a client who signed it. While generating a strategy, I found an odd thing:  the bigger the waste stream, the easier it was (is) to become carbon neutral with no detriment to the financial position of the customer. Why? Because they have a huge flow of cash flying out the door every month. Redirect this stream toward projects with positive cash flow, and the money starts piling up to the point that wind energy, solar panels, and windmills can be purchased.

Last chance to take our Energy Rant survey. The survey will close tonight at 11:59 CST and the winner will be announced tomorrow! Thanks to those who have already participated. We appreciate your feedback!