Controlling Facility Energy Costs > Energy Management Planning

From the early part of the 20th century, our society came to rely on cheap and plentiful sources of energy, mostly non-renewable fossil fuels. Easy availability led to rapidly increasing energy consumption as we devised more and more ways that energy could improve our comfort, convenience, and material well-being.

Starting in the early 1970’s, we’ve come to realize that increasing energy use has very serious consequences in terms of environmental impact, national security (in that many countries are dependent on foreign sources), and economic sustainability. More recently, similar threats have emerged at the enterprise level as energy costs move relentlessly upward, putting pressure on the economic viability of the business or institution. At the same time, customers, investors, and staff are less and less willing to see energy used without a concerted effort to control it.

As our economy evolves and becomes more sophisticated, and as opportunities for improved operational efficiency became available, organizations are compelled to embrace and internalize new areas of management that were previously not needed. Those organizations that did not address those opportunities were left behind and many have been replaced. Twenty years ago, companies had to define an IT strategy. Ten years ago it was an outsourcing strategy. Now it's a Green strategy.

ManagingEnergy provides end-to-end functionality, applying management discipline to your energy spend. It organizes the complexity to turn piles of data, from many sources, into actionable business intelligence.

Energy efficiency is the most compelling part of any green strategy, because it has a clear financial return that other sustainable activities cannot yet demonstrate. Further, market pressures (increasing commodity pricing), are only increasing the appeal of the ManagingEnergy solution and surrounding services.

We all need a green strategy for the new century, with energy management and conservation as the central piece.

Impact on the Bottom Line

Historically, most organizations have treated utilities as unmanageable expenses. However energy costs are rising much faster than background inflation and will continue to rise, with a corresponding weight on income statements. This increasing cost share is focusing managerial attention on utilities. Utility costs are fast approaching 50% of a typical commercial and institutional building’s post-construction lifetime operating costs (see Figure 2).

Figure 2 - Proportion of Lifetime Costs for a Typical Commercial or Institutional Building

Lack of Standards in Approach to Energy Management

More recently, many building owners have started to assess their energy costs and some have tried to control costs in an ad-hoc way (e.g. responding to product pitches or energy marketers). Quite often these efforts meet with limited success or unexpected negative consequences. There is a growing realization that energy cost control in buildings is generally not cheap or easy, and that it is an ongoing process that needs to be managed methodically like any other business process.