By Micah Remley, Senior Vice President, EnerNOC
Commercial property executives today are increasingly faced with the demands of maintaining more efficient operations across their building portfolios to meet internal corporate sustainability benchmarks as well as external reporting obligations for GRESB, ENERGY STAR, and city disclosure ordinances, among others.
To support these efforts, many look to projects such as LED lighting retrofits and solar installations for gains, and on the reporting side, all too often embark on short-term data collection sprints leading up to deadlines.
Although these initiatives deliver incremental results, discrete investments and siloed reporting pushes fall short of achieving the dramatic impact of a more comprehensive approach.
Creating and implementing an energy management plan that brings together different departments, accounts for overall budget, and provides an organization a true understanding of its energy use and costs will more effectively reduce energy waste, increase efficiency, streamline reporting, and achieve savings.
It can also facilitate integration of more efficient technologies and ensure sustainability objectives are met.
Here are four strategies to get you started on this approach:
- Understand primary energy cost drivers
There are three primary cost drivers of energy: how you purchase energy, how much is used, and when you use it.
Most energy efficiency programs focus on reducing overall consumption. Expanding your program’s focus to include how you purchase energy and when energy is used will help to maximize financial returns and prevent risks, while improving business operations and efficiency.
For instance, a better understanding of a facility’s peak demand charges, which can comprise of 30 percent or more of your monthly bill, allows you to get a better handle on when you’re setting your daily, weekly, or monthly usage peaks and adjust your operating schedules accordingly to prevent waste.
This also allows you to be more proactive in predicting your usage and spend for budgetary purposes.
Also, understanding how you are billed for energy is essential for effective budgeting, forecasting, and evaluation of energy management initiatives.
Whether your organization is locked in a fixed rate or has a certain level of exposure, or even if you’re in a vertically integrated market where there is only one utility, your energy procurement strategy can significantly impact your dollars spent on energy and/or how much exposure you have to the volatility of energy markets.
Taking a proactive approach to managing all three of the energy cost drivers puts you in greater control.
- Build the right cross-functional team
Successful energy management programs require engagement from various departments across the entire organization, from operations, finance, and sustainability, to procurement, maintenance and human resources.
To ensure the continuity and ongoing prioritization of your program (and avoid reporting sprints, for example), assign a strong cross-functional team of leaders with very specific roles, including an “energy champion” who leads the program, monitors energy policies and ensures implementation of measures; an executive sponsor to ensure the C-suite understands and supports the program, and how it meets broader business objectives; an energy intelligence software power user who is knowledgeable with the software tools and who can perform analysis and run reports; and finally an extended team that consists of personnel from the departments mentioned above to ensure a uniform energy management effort.
It’s essential this team works together to stay on track and meet your energy efficiency and sustainability goals, and is employing best practices year-round to avoid quarterly or annual all-hands-on-deck pushes.
Equally important is the internal promoting and communications of the team’s efforts to gain the organization’s full support for long-term success.
- Develop a plan for success
Once you have your team in place, develop a strategic plan that explicitly states the scope of your energy management program and objectives, including all internal and external reporting deadlines, and how you will track it for success.
Understand and agree on the metrics and KPIs that will be used for reporting, and the tools you’ll use to collect necessary data, with a timeline of check points. Maintaining gains will only be possible with a dedicated, long-term commitment to energy management excellence.
- Implement the right tools to execute against your plan
Another key component to establishing efficient energy management is having technology solutions like energy intelligence software (EIS) that makes collecting and analyzing data possible, and also makes it possible to understand your true energy usage and costs, especially if your portfolio includes solar and or storage.
By securing data in two forms, including monthly bills and streaming real-time data, you can quickly recognize potential issues, track patterns, measure and verify results of projects, and understand current costs.
With an EIS solution, you can identify and prioritize opportunities to reduce energy waste across a portfolio of buildings through dashboards and analytics, comply with local energy efficiency regulations, and use ENERGY STAR benchmarking.
Everyone on the energy team should have access to the data for more timely and intelligent decisions related to energy use and spend, impacting the overall energy management strategy and sustainability efforts, along with the organization’s bottom line.
Implementing a successful energy management program is becoming an essential piece of the commercial real estate industry’s efforts to maximize the efficiency of its buildings.
By leveraging the strategies outlined here, organizations will be well on their way in meeting their energy management goals and increasing the value of their assets.