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Energy Management 2015

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The year 2014 saw some pioneering advances in renewable energy, sustainable technologies and more innovation from companies as they increased their focus on the triple bottom line. The companies showed greater understanding of their sustainability needs and a more strategic, long-term view of energy management. Ecova Inc., the total energy and sustainability Management Company, USA conducted energy and sustainability outlook survey of more than 500 energy, sustainability and facility management professionals on expected changes in the field during 2015.

More professionals are now shifting their focus from smaller, ad-hoc projects to long-term strategy and capital investments – areas that can produce a sustained impact. While implementing these programmes, low-cost efficiency efforts in the coming years is a top priority for 55% professionals. About 52% professionals indicated that leveraging energy data to support strategic energy and sustainability programs is a top priority in the coming year. This priority was followed by identifying and implementing capital expenditures for energy efficiency projects. The focus on strategic plans and large investments shows a maturing of the marketplace and broadening importance of energy and sustainability management.


This strategic view is also reflected in the companies increased investing in solutions to help gather data, which is the foundation for any strategic energy and sustainability management plan. Nearly 50% of businesses have energy/building management systems installed either as pilots or in a portion of their buildings or across their portfolio. Another 30% have budgets approved or are considering installing them in 2015. Most professionals considered investing in an EMS/BMS, the smartest sustainability investment.

The Diving Factors

Moving an organization toward having a long-term, strategic plan with significant capital expenditures requires resources beyond what is typically budgeted. As companies see more value in these types of long-term programs, whether it’s from their own experiences or those of their peers, they are willing to make more of an investment. The link between financial benefits and energy and sustainability management is also evident when one looks at the drivers behind decision making. Cost is the number one driver for energy and sustainability initiatives. Regulation remained the second biggest driver of energy and sustainability initiatives. Despite the growing number of regulations, year-over-year survey results show no measurable change in regulation as a driver. This may be due in part because there are still a low number of sites that meet the required energy benchmarking or auditing criteria.

Lighting is often a great starting place for those looking for a low cost initiative that can have quick return on investment, especially when combined with utility rebates and incentives. Upgrades to facility lighting systems often deliver 25-35% reductions in energy, with a simple payback of two to three years. With this in mind, it is no wonder that lighting is referenced as ‘the smartest energy and sustainability investment’ by most professionals. According to the survey, lighting opportunities will continue for the next several years but will eventually reach their threshold, as companies will begin to look for longer-term strategies to improve efficiency. For utilities, lighting programs are still extremely valuable and have paved the way for new long-term, strategic energy and sustainability management plans. Organizations are looking beyond the low-hanging fruit to additional ways to sustain savings. Utilities should begin implementing strategic energy management programs into their portfolios, as they expand away from lighting in the coming years.

Opportunities for resource management

In 2015, square feet requirements will continue to shrink (impacting more buildings), compliance requirements tightening and more mandates will require energy reporting at the time of property sale. Waste legislation will also evolve and take shape, impacting a greater number of organizations and sites due to increasing recycling/composting directives and plastic bans that apply to a broader range of buildings. It will be extremely important for companies to invest in solutions that can help them track and manage resources, as well as consult with thirdparty professionals to help navigate increasing regulatory complexities.

The professionals point toward energy, water, waste and carbon (in that order) as top priorities. Water is increasingly top of mind with increasing regulations in an effort to manage water use and companies will need to pay attention to water efficiency
and conservation. Professionals also cannot overlook carbon, especially considering the increasing focus to reduce and regulate emissions. Organizations should be focused on tracking and reducing their carbon emissions in order to mitigate current and future risk.

Waste rank as the third biggest area of opportunity for savings and improvement, reveals that many organizations are increasingly viewing waste as an important business measure. Despite the fact that the majority of respondents represent a wide range of job functions and industries, waste is applicable to more than 60% of them – again showcasing how waste is increasingly important to every part of an organization.

Top priorities for leveraging your waste data in 2015

Ecova expects this interest to grow as more cities, counties and states enact waste legislation and companies see financial benefits from managing waste. While waste expenses typically have not accounted for a substantial percentage of operational expenses, there is still a tremendous opportunity for savings. In the past 10 years, waste cost has risen considerably, and is expected to continue with increasing landfill fees and the cost of fuel.

Industry makes a difference

The food service industry – quickservice and casual restaurants – has a distinct opportunity in 2015 to improve energy efficiency. The industry is highly energy intensive when compared to other industries, such as healthcare, retail, or grocery and has achieved lower levels of improvements in energy efficiency till last year. While 46% of professionals from the food service industry state their organizations have invested in ways to gather real-time energy data through EMS/BMS or other devices, 40% of respondents have made no investment to date. This reveals a large opportunity within the food service industry to improve energy consumption and catch up with the efficiency improvements of other industries.

Conversely, the retail industry has proven to be a leader in energy and sustainability management. The sector had a high rate of improvement in energy efficiency till 2013 compared to other industries. The industry also demonstrated a high level of adoption of data collection technology, as 57% of professionals stated their organization has EMS/ BMS or another device installed.

Communication is Key

It’s no surprise that energy continues to rank as the biggest opportunity, especially considering the portion of utility budgets that are represented by energy. As energy prices will continue to rise globally next year, companies are thinking long term about their energy supply and management strategy. While certain measures offer a quick and effective ROI, such as lighting retrofits, organizations will need to implement long-term programs, such as EMS/BMS, in order to see increased savings and remain competitive as regulations and the price of energy and resources increase.

A successful energy supply management strategy requires energy managers to communicate with all company stakeholders early to mitigate budget risk. However, survey data show this communication may be lacking. While energy supply management typically falls under the role of energy managers and procurement professionals, it is important that all stakeholders are on the same page, especially those involved with budgeting and forecasting.

Indeed, companies are more aware than ever before of the value of strategic sustainability plans and also understand the importance of a total sustainability plan that includes resources beyond energy, such as waste, water and carbon. 2015 will prove to be a challenging year; however, it is encouraging to see that sustainability is becoming a core business priority with many job roles involved, from the energy and facility roles to accounting/finance roles.

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