Energy Efficiency Risks and Opportunities for Your Business and Your Career
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The document discusses strategies for effective energy management in businesses and careers. It suggests approaching energy management as an investment that creates wealth rather than as a cost-cutting project. It recommends organizing cross-departmental teams to pursue energy efficiency opportunities, and communicating goals and results in business terms to show how energy management supports overall capital performance and returns. The key is to perceive energy improvements as opportunities rather than costs or distractions.
Energy Efficiency Risks and Opportunities for Your Business and Your Career
- 1. ENERGY EFFICIENCY: Risks and Opportunities for Your Business and Your Career Christopher Russell, Principal Energy PathFINDER .com (443) 636-7746
- 2. Or… If energy efficiency were a rock, would you prefer to roll it UPHILL or DOWNHILL? 2©2013 Energy PathFINDER.com
- 3. About Christopher Russell, C.E.M., C.R.M. Independent consulting since 2006 Principal, Energy Pathfinder Visiting Fellow, American Council for an Energy Efficient Economy, 2012+ Energy Manager, Howard County, MD, 2010- 2012 Director of Industrial Programs, Alliance to Save Energy, 1999-2006 Comm. & Indus. Program Manager, American Gas Association, 1995-1999 MBA, M.A., University of MD; B.A., McGill University 3©2013 Energy PathFINDER.com About Christopher Russell
- 4. TODAY’S PURPOSE: Reveal the RATIONALE STRATEGY ORGANIZATION COMMUNICATION & PHILOSOPHY …of industrial energy management as it applies to career and business development 4©2013 Energy PathFINDER.com
- 5. ENERGY IS ALWAYS IN MOTION. Energy that doesn’t create wealth destroys it. WEALTH DESTROYED HEAT, FRICTION, & CHEMICAL REACTIONS DESTROY PLANT & EQUIPMENT, CREATE LIABILITIES WEALTH CREATED TRANSFORMATION OF INPUTS INTO FINAL PRODUCTSHEAT, PRESSURE, & MOTIVE POWER FUGITIVE ENERGY COMMITTED ENERGY FUEL & ELECTRICITY Technical Rationale for Energy Management 5©2011 Energy PathFINDER.com
- 6. EXPENSES, INTEREST, OR INFLATION CAPITAL IS ALWAYS IN MOTION ECONOMY (opportunity) PLACE OF LOW RETURNS PLACE OF HIGH RETURNS CAPITAL IS NEVER AT REST 6©2013 Energy PathFINDER.com
- 7. THE INDUSTRIAL FACILITY IS A MICRO ECONOMY FACILITY (opportunity) WEALTH INPUTS WEALTH CREATED EXPENSES, INTEREST, OR INFLATION Who will get superior returns from your facility assets? YOUR BUSINESS or the UTILITY COMPANY? 7©2013 Energy PathFINDER.com
- 8. (c)2009 Energy Pathfinder Mangement Consulting, LLC www.energypathfinder.com 8 MONEYMONEY FUEL & ELECTRICITY HEAT, PRESSURE & MOTIVE POWER PRODUCTS TO SELL BUSINESS RATIONALE FOR ENERGY MANAGEMENT WE TRACK MONEY. WHY NOT ENERGY? 8©2011 Energy PathFINDER.com
- 9. STRATEGY UP HILL: Proclaim “reduced utility bills” as your purpose. DOWN HILL: Proclaim a vision for supporting core business goals through strategic energy management. 9©2013 Energy PathFINDER.com
- 10. STRATEGY UP HILL: Approach energy management as a project. DOWN HILL: Approach energy solutions as an investment. 10©2013 Energy PathFINDER.com
- 11. STRATEGY UP HILL: Use an ENERGY AUDIT to determine a list of projects. DOWN HILL: Develop BUSINESS PLAN that provides a roadmap to business results. 11©2013 Energy PathFINDER.com
- 12. STRATEGY UP HILL: Evaluate proposed efforts for their cost to do. DOWN HILL: Evaluate proposals… • for impact on overall invested capital performance • in comparison to the cost of doing nothing 12©2013 Energy PathFINDER.com
- 13. PURSUING ECONOMIC OPPORTUNITY 1. Benchmark current capital performance 2. Perceive opportunities for superior performance 3. Estimate investment risk/return 4. Reinvest capital 5. Continuous improvement. See Step 1. For the ECONOMY… For the FACILITY… DYNAMICS ARE THE SAME 13©2013 Energy PathFINDER.com
- 14. ORGANIZATION UP HILL: Delegate all energy matters to a single department (silo). DOWN HILL: Organize leadership and skills in cross- departmental teams. 14©2013 Energy PathFINDER.com
- 15. ORGANIZATION UP HILL: Allocate budget, skills, and time commensurate with energy’s proportion to total expenses. DOWN HILL: Fund efficiency efforts proportionately to the magnitude and speed of cash flow that it creates. 15©2013 Energy PathFINDER.com
- 16. COMMUNICATIONS UP HILL: Assume everyone already knows what you’re talking about. DOWN HILL: Manage expectations through education. 16©2013 Energy PathFINDER.com
- 17. ENERGY COST CONTROL What Your Business Leaders Should Know • PRICE MANAGEMENT & PROCUREMENT • BEHAVIOR – Education & awareness – Make good choices with current assets • O&M PROCEDURAL – Optimize current assets – Leak & loss repair, PM routines • CAPITAL EXPENDITURE – Replace & upgrade – Invest in new technology ©2013 Energy PathFINDER.com 17
- 18. 1-2 YEARS 2-5 YEARS 5+ YEARS PRICE/PROCUREMENT AWARENESS & BEHAVIOR O&M/PROCEDURAL CAPITAL INVESTMENT SAVINGS POTENTIAL OVER TIME* *Author’s Summary of Industry Knowledge 18©2013 Energy PathFINDER.com
- 19. COMMUNICATIONS UP HILL: Address mechanical performance. Explain everything in techno- speak. Describe results as energy saved. DOWN HILL: Address capital performance. Articulate outcomes and rewards as they accrue to the agendas of other departments. 19©2013 Energy PathFINDER.com
- 20. Ask not how much energy management shall take from current resources. 20©2013 Energy PathFINDER.com Ask how much (and at what rate) energy management shall create new wealth.
- 21. COMMUNICATIONS UP HILL: Execute without informing, persuading or collaborating. DOWN HILL: Declare amnesty for past practices; seek, encourage, and reward compliance. 21©2013 Energy PathFINDER.com
- 22. COMMUNICATIONS UP HILL: Perceive energy management as a distraction from standard operating procedures DOWN HILL: Fold energy performance criteria into existing business metrics and accountabilities 22©2013 Energy PathFINDER.com
- 23. COMMUNICATIONS UP HILL: Use simple payback. Results describe HOW LONG it takes for a budget to replenish itself. DOWN HILL: Use rates of return. Describe the RATE and MAGNITUDE of capital: (1) Created via your agenda , or (2) Destroyed through inaction 23©2013 Energy PathFINDER.com
- 24. You should not have to defend superior rates and magnitudes of investment returns. 24©2013 Energy PathFINDER.com Detractors need to defend the rate and magnitude of capital destruction caused by DOING NOTHING. DEFENDING ENERGY MANAGEMENT?
- 25. PHILOSOPHY UP HILL: Confuse energy efficiency with environmentalism. DOWN HILL: Perceive energy improvements as business opportunities. 25©2013 Energy PathFINDER.com
- 26. PHILOSOPHY UP HILL: Perceive energy management as a cost center. Facility assets are a cost to be minimized.. Success = no unusual expenses; don’t get noticed. DOWN HILL: Energy management = profit center. Success = creating cash, improving return on invested capital, get noticed for supporting other departmental agendas 26©2013 Energy PathFINDER.com
- 27. “Yeah, but…” UP HILL: Keep pushing the same buttons… and keep getting the same results. DOWN HILL: Apply some of the ideas from this presentation. 27©2013 Energy PathFINDER.com
- 28. YOUR FACILITY… CAN BE AN ATM MACHINE. 28©2013 Energy PathFINDER.com
- 29. CONCLUSIONS • Demystify • Don’t save… CREATE! • Monetize • Collaborate • Document and celebrate 29©2013 Energy PathFINDER.com
- 30. YOU-TUBE: search “Energy Pathfinder Investment Calculator” Energy PathFINDER .com Christopher Russell @ENERGYpathfndr Feb 2008 June 2010 THANK YOU!