Earlier this week Bart Tommelein, the regional minister for Energy in Flanders, stressed once more that he expects industry to step up its efforts in going green and investing in renewable energy.
Regardless of whether this is a sound political move or not, he merely confirmed a trend that has been obvious for several years now: energy is no longer just an expense, but a valuable resource to be actively managed in a company.
As with all trends, there are several factors driving it. Economics is the most obvious one: the total cost of energy supply has been going up and will continue to do so. In addition advances in technology have put more options than ever in the hand of (industrial) consumers. In just a few years time it has become common to invest in local generation capacity like CHPs, wind turbines or PV panels. The final push came from public policy and regulation. A cocktail of obligations – like annual reporting schemes – and incentives – like the increased returns on PV installations announced today – convinced many industries to start looking at energy management in earnest.
Whatever the motivation to engage on it, there are always three elements to energy management. First of all it needs to be a company-wide (or at the very least site-wide) endeavour to systematically reduce consumption/costs/emissions over time. This is very different from implementing ad-hoc projects and trusting that they will yield the desired results. It requires an explicit statement from management on the goals to be reached – and the capacity to systematically follow up on the progress and identify next steps. The key here is to have a dependable repository of sufficiently detailed and validated data at hand. This in itself is a major challenge, especially in industrial companies with very many different installations that all have been designed for process optimization – not for energy flow optimization.
Secondly, key people throughout the organisation need to actively work on and with energy. It is the energy manager’s role to work on it. She analyses the data on an almost daily basis, checks whether they are in line with the stated policy and is constantly on the lookout for improvements. At the same time, several other people should have to work with energy – from purchasing and accounting who keep tabs on overall expenditure over production managers who have to run the factory as smoothly as possible to the operators who are closest to the actual installations. In addition, there is a growing army of external parties who like to be kept updated – (ISO-)auditors, government agencies and even analysts or investors. The reporting to all of those stakeholders – each with their particular requirements – can take a lot of time and effort if it is not streamlined. Fifteen to thirty person-days per year is a common average for many companies, with far higher numbers for energy-intensive factories. On top of that people will only really use the input if they can get the information they need at exactly the time they need it and in the format they want.
The third element is the one that is most often overlooked or underdeveloped. Energy management will only be effective if it is not just reactive – tracking and reporting – but really proactive. This implies not all attention can go to having good data and reporting on them. It also means there is a need for tools and simulators to understand the impact a new project could have on consumption, costs or emissions. Extra information – like data on the production process, cost models, energy market prices or benchmarks with other sectors or companies – will have to be combined with the company’s own energy data.
The breakthrough of energy management has created the need for more powerful and advanced tools than standard monitoring software (which in itself was already a major step forward over the standard spreadsheet that is still the mainstay in quite a few places). Just like CRM gave Sales a structural place in the company, the new generation of software needs to do the same for Energy. Not because it is nice-to-have, but because it is a must. For the bottom line – and for meeting the challenge put forward by Bart Tommelein.