Energy is a significant feature on any development strategy. While awaiting the election results and in the middle of the withdrawal from the European Union, what is the future of the energy trilemma: security, affordability and sustainability?
There’s been another tumultuous few months in the world of politics. On 29 March, the Prime Minister triggered proceedings to withdraw the United Kingdom from the European Union. Three weeks later, a snap election was announced, and as I put pen to paper we are already enduring yet another electoral campaign.
This is happening while the country is – or was at least– embarking on a new ‘modern industrial strategy’, which includes 10 strategic pillars to enable the UK to prosper and develop economically. Energy is a significant feature of this strategy as the UK seeks to tackle the energy trilemma – energy security, affordability and sustainability.
On a global scale, a lot is also going on – environmentally as well as politically. USA President Donald Trump has signed an Energy Independence Executive Order, effectively rescinding President Obama’s environmental policy and measures to reduce carbon emissions. Where does that leave the International agreement to reduce global greenhouse gases and the Paris Agreement on climate change, is now a relevant question.
UK and European commitments
Notwithstanding Trump and the Brexit process, the UK and Europe continue to honour commitments to reduce contributions to greenhouse gases (GHG) and climate change through national and regional measures that encourage energy efficiency.
In Europe, the 2030 Energy Strategy aims to increase the renewable energy capacity, promoting businesses to be more energy efficient and to invest in infrastructure, low-carbon technology and efficient energy networks.
Specific 2030 targets include:
- a 40% cut in greenhouse gas emissions compared to 1990 levels
- at least a 27% share of renewable energy consumption
- at least 27% energy savings compared with the business-as-usual scenario.
Similarly, the UK has specific targets to reduce GHG emissions by 80% by 2050, and has introduced several policy instruments to achieve this. These include specific energy efficiency legislation requiring buildings to be more energy efficient; fiscal measures – taxes – to incentivise businesses to reduce energy consumption; market-based measures to affect carbon trading and drive down GHG emissions; and voluntary measures through financial support and funding.
Among all these, on 1 April 2017, the UK introduced a new legislation – the Balancing and Settlement Code Modifications P272 – aimed at large energy consumers and energy suppliers. Because of their energy profile, businesses that fall into categories 5, 6, 7 and 8 – deemed maximum demand customers – will have supplied energy meters capable of measuring peak demand for given periods.
It is estimated that circa 160,000 businesses are affected by this legislation, which will be also required to have an appointed meter operator and data collector to maintain and run the meters and send the readings to energy suppliers.
The overall aim is to have more accurate and reliable energy consumption data, enabling consumers to identify energy consumption trends and opportunities to reduce it.
Four steps to successful energy management
So, considering increasing pressure to manage resources more effectively, and the inevitable increase in costs, how can an organisation start a programme to better manage and reduce its energy consumption.
An organisation needs first to understand where it is on its energy journey and identify where it wants to get to. There are typically five stages on that journey: compliant, knowledgeable, more efficient, self-sufficient and generating revenue.
A recent survey to energy managers, carried out by edie.net in association with E.ON, revealed that many organisations are at different stages along this journey, with small and middle enterprises progressing the least, and some perhaps not being fully compliant with existing legal requirements such as the Energy Savings Opportunity Scheme (ESOS).
Larger organisations, for whom energy is perhaps a more significant cost, are typically compliant, with good monitoring and measuring regimes, implementing an Energy Management System (EnMS) and having some external third party certification to ISO 50001. Some of these are also investing in on-site energy generation, which enable them to benefit from financial return.
So, considering how far you want to go with an energy management and reduction programme, is an important first step. Nonetheless, moving from a position of compliance to money-generating competitive edge is easier said than done.
2. Taking Action
There are 10 actions an organisation can take to progress its energy management ambitions:
Action 1: measure, monitor and manage
The aforementioned survey suggested that organisations with better performance had effective measuring, monitoring and management processes in place. Those help an organisation to understand where they are on the energy journey, justify spend on energy efficiency investments and identify cost-saving opportunities across all aspects of the business. There are powerful software tools available to help.
Action 2: engaging with people
Getting people to act is another key success factor. It is important that individuals behave in the right way to support energy reduction initiatives. It is critical, therefore, that people understand their roles and responsibilities with respect to energy management. Clear communication and education play a crucial role.
Action 3: choosing the right tech
Not all energy management options and technology will suit all businesses. Self-generation may contribute to reducing an organisation’s carbon footprint – if that is indeed an overall goal – however several important questions should be answered first before installing ‘environmental bling’.
Choosing the right energy solution for the business is important, so some questions to answer would include: what and when are the peak energy demands of the business? Is the business seeking to install new on-site generating solutions for consumption or generation purposes? Can the business use peak-time pricing to its advantage? What are the implications for any existing energy supply contract?
Action 4: maximise benefit from ESOS
For those organisations affected, the action points and opportunities identified through ESOS should be implemented. Rather than considering ESOS as just another ‘compliance obligation’, the opportunities identified through the energy audit process can lead to an informed and genuine improvement programme, which clearly quantifies costs and savings.
Action 5: get your house in order
It is good practice to have a good and clear understanding of your energy consumption patterns, needs and demands – your energy profile – before rolling out potentially expensive energy efficient technologies. Avoid jumping straight into self-generation without first having a clear plan of action so that the right steps and measures can be completed at the right time for maximum effect and return.
Action 6: healthy competition
Consider making energy management and efficiency improvements a friendly competition or game between sites – or indeed on a single site between departments. Reward those who engage more enthusiastically. Not only it will help to save energy, but it will also contribute to develop relationships between teams and to an overall change in behaviour.
Action 7: consider ISO 50001
Already implemented by thousands of organisations globally, the standard provides an opportunity to drive a cultural shift within an organisation and help drive forward an energy management plan. ISO 50001 offers a holistic approach to what an organisation needs to do to achieve best practice, providing a framework to focus, plan and implement everything related to energy.
Action 8: the business case
Ensuring boardroom buy-in is also critical. Any boardroom discussion around energy will ultimately revolve around finances, so an understanding of what boardroom members are looking for, and will sign up to, is important. Just like a ‘dragons den’ scenario, energy managers need to know each energy efficiency technology and project inside out, and precisely what it will produce. If and when challenged by the board, energy managers can tell exactly how much the organisation will save on the bottom line. Reliable data will also be essential. Financial people love data, so, if presented with poor or unreliable facts and figures, there is a possibility an energy management project will not be approved.
Action 9: setting targets
While setting achievable targets would likely move an organisation in the right direction, consideration should be given to setting more ambitious sustainability targets too, as these underpin all energy management improvements over the longer term. Although detailed plans of how to achieve these longer-term goals may not be possible, new technologies will emerge and the economics of certain energy efficiency technologies will likely improve. But to drive truly sustainable change, energy managers should be driven by the greatest motivator of all: the unknown.
Action 10: external expertise
As well as specialist consultancy and reviewing supply contracts, organisations should also consider wider discussions with energy suppliers to include technologies that can also lead to bottom-line benefits. From managing usage, advising on efficiency technologies and explaining generating opportunities, energy providers are experts in energy and, as such, could be consulted more.
3. Behavious Change
Engaging with people is critical to the success of an energy efficiency programme. This can be a difficult process in its own right, but getting it right will significantly improve performance and savings. Here’s a list of actions that can also be taken in this respect.
- Get everyone involved and build momentum. The energy manager and his team need to engage others and show them that their actions also contribute to improved performance. Clear communication and education to provide understanding – showing that collective actions contribute much more than single individuals – will also show to decision-makers that people actually care
- Focus on big influencers. Identifying those that are well-connected, have influence and have gained trust and respect in an organisation can help to get messages across, role model and develop a positive culture. Getting these individuals engaged will help communicate and support other areas of the organisation
- Obtain high-level buy in. Like the above, buy-in and support from a senior executive, who is seen leading by example and embracing the change, is also critical to success. Senior leaders also need to have the confidence in, and understand the value of, behaviour change data. The best practice is to anonymise the data so individuals are not identified, but performance can still be monitored
- Effective use of data. Showing performance improvement through behaviour change is seen as an effective way of demonstrating positive behaviour change. However, the important point is ensuring the data is presented in a way employees can understand and is meaningful to them
- Nudge, don’t shove. People tend to resist change, if they are repeatedly told what to do. Nudge theory focuses on designing choices for people in a way that will encourage the ‘right’ decision, without losing their freedom of choice. The decision is still theirs, but they are being nudged in a certain direction
- Reward and recognition. No matter how small, big or bold, acknowledge good work. Rewards should be non-monetary, as typically when that financial reward has gone or is not available, the behaviour stops too. Identifying suitable incentives is a vital process – whether it’s simple praise, league table, links with other organisational concerns such as health and wellbeing, and of course there is always a place for the simple ‘well done’
- The social context. Encouraging behavior change at home will also help behaviour change in the workplace. Bad habits at home can spill over into the workplace so trying to change behaviour in all social contexts will help embed the change
- Effective communication is king. A wide range of on-line and off-line tools are available, as well as traditional verbal and written forms of communication. Of course, some of the best forms of communication are those that inspire through real-life examples of colleagues and peers. Stories – rather than slogans and messages – are therefore good tools to use
- Barriers to change. Sometimes it’s not the people that need to change, but perhaps other factors that influence behaviour. These may include barriers, enablers and triggers that may contribute, or perhaps even create, the wrong behaviour. Making it ‘easy’ for individuals to adopt the change should also be dealt with
- Monitor results and report feedback. Dashboards can be useful means of collating feedback from staff and reporting on performance improvement. Has, for example, energy consumption fallen because staff are turning off their computer screens? Or, in an office environment, consider using one floor or area as a control and measure the success of a scheme on another floor or area. Demonstrating tangible improvements in this way is also a good way of obtaining a mandate to roll out more widely.
Aligning corporate energy reduction targets with individual’s motivations and behaviours can be deliver significant savings, so it is important that people know and understand what is being done so they can also buy-in and support the overall programme.
4. Learning from others
The final step in energy management success is to learn from others. There are numerous free webinar events, conferences and exhibitions across the UK and internationally where expert speakers and experience practitioners provide insight into their own energy management projects and programmes. Other useful sources of information and guidance on energy management are also available from a wide range of sources, including the Department for Business, Energy and Industrial Strategy, Energy Saving Trust, Waste and Resources Action Programme and Carbon Trust.
The British Safety Council also holds environmental policy and management briefing events, webinars and workshops to help organisations improve their overall sustainability performance.
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