It’s no secret that cost-cutting is now a main focus for many business owners. When times get tough, the first reaction is figure out where it’s possible to spend less in order to maintain the bottom line. Over the last year, there have been countless examples of companies that eliminated programs, slashed entire departments, and sliced into salaries to protect profits.
Surprisingly, the line item that accounts for as much as 20 percent of operating costs, energy use, is often the last place businesses look to when their searching for savings. The explanation you’ll hear from a large corporation is typically, “We don’t know where to start when it comes to controlling energy costs.”
Find your own first step
There is one specific action that a company can take to evaluate where they are in terms of energy consumption and spend, and where they could be. Benchmarking energy use across a portfolio has countless benefits for facility and multi-site owners. Primarily, the practice can lead to reduction in energy use, with the added bonus of reduced expense. Comparing facilities’ energy performance against similar facilities makes it possible to prioritize which require immediate improvements.
The practice of energy benchmarking is rooted in data collection and analysis. Most of the information necessary to kick start a quality energy management program can be found in utility bills. Start by collecting a year’s worth of this billing data for every facility in your portfolio, and you’re equipped with the tools you need to develop a detailed, site-level energy profile for the business.
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| Ed Schlect, Executive Vice President, Advantage IQ |
Generally, Energy Usage Intensity (EUI) is the metric used for energy benchmarking. This is the measurement of energy consumption over a certain time period divided by the floor area. Factors such as HVAC systems, weather, lighting conditions, and hours of operation all affect the amount of energy consumed at a facility. In some cases, factors other than floor area may ultimately prove to be more useful as the index for benchmarking.
Knowing how much energy each individual facility consumes during every billing cycle over a twelve month stretch is powerful. Once you’ve grouped comparable locations, based on the way each facility is equipped and used and the climate they operate in, you can compare energy usage patterns and EUIs to evaluate the performance of one site against another. This is how you determine the best place to start; which locations are the poorest performers and demand attention, and action, now? Further, which locations are good performers, and may be possible sources for best practice identification? With more advanced analysis, statistical adjustments can be made to adjust for variations in weather, hours of operation, or differences in equipment and allow for portfolio-wide comparison.
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| "As part of Sidel's larger options and upgrades initiatives to their global base of 27,000 machines, air recovery can reuse up to 40% of the compressed air expelled during bottle blow molding." |
Make the changes that will save you money
As a joint program with the U.S. Environmental Protection Agency and the U.S. Department of Energy, ENERGY STARÆ helps companies save money and protect the environment through energy efficient products and practices. Energy managers can easily compare the energy use of their buildings against similar buildings nationwide using the EPA’s ENERGY STAR energy performance rating system. This system, based on a scale of 1-100, takes into account the impact of weather differences, as well as the physical and operating characteristics of each building. Using the ENERGY STAR rating system as a first step to benchmark your facilities is a low cost means to get started. Further, the ENERGY STAR rating provides a simple, easy-to-explain communication tool to share with building operators the impact of their behaviors, and also to share with decision makers the need for investment or the fruit of investment decisions. Finally, the ENERGY STAR provides excellent recognition of energy performance, through publishing of case studies, annual awards, and access to the ENERGY STAR label.
Taking the time to establish benchmarks and evaluate your facilities’ energy performance allows you to: pinpoint high and low performing facilities; identify which practices are working and which are not; recognize the role of energy expenditures in overall operating costs; create a historical perspective for future decisions; and institute reference points for gauging and rewarding excellent operations.
The partnership with the EPA and ENERGY STAR maximizes the realization of savings by offering an established strategy in energy management that aides in gauging current performance, setting goals for future performance, following savings, and rewarding improvements.
However, benchmarks alone do not effect change! Be sure you make the investment in a broader energy program, designed to leverage the benchmark process and convert it to action. Benchmarking information needs to be communicated in a meaningful way to those accountable to respond. Building energy performance is a function of two primary factors. Energy-using equipment is only part of the equation where equipment selection and maintenance practices drive energy consumption. The choices made by building occupants about the use of equipment and building operations also have a substantial impact on the building’s performance. In fact, the highest return on investment is often achieved through simple, low-cost operational changes and energy benchmarking is a powerful tool to communicate the impact of such changes. You’ll need an energy team which includes those accountable for equipment selection, maintenance, and operations. If you set goals, assign accountability, measure results, and celebrate successes, the team will be able to accomplish much more.
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| The highest return on investment is often achieved through simple, low-cost operational changes, and energy benchmarking is a powerful tool to communicated the impact of such changes. |
Who’s doing it well?
The grocery sector has long been known as one of the biggest energy consumers in the multi-site retail world, and companies in this space stand to gain a lot from energy management and energy benchmarking. Food Lion has seen remarkable results from the program they put in place. According to data found on the EPA website, www.energystar.gov, Food Lion was able to benchmark more than 42 million square feet within 1,200 facilities. With the help of Advantage’s Facility IQ™ service, Food Lion is not only able to monitor energy performance at all of its stores, it can also identify where improvements are needed the most, and where facility upgrades are having the greatest impact on energy consumption.
Upgrades in lighting, refrigeration, and HVAC systems have helped to reduce Food Lion’s energy consumption by more than 25% over the last 5 years. The numbers say it all: the chain has saved almost \$105 million in energy costs and also reduced its energy use by more than 2.29 trillion BTUs since 2001.
Utilizing automated benchmarking has the ability to increase the energy management program’s results in many ways. Collecting and reporting data makes it possible to identify incongruity among different sites, investigate buildings that may not be performing up to standards and set goals and execute the change needed to reach these goals. The collected data allows companies to focus their efforts on the facilities that need it the most. Not only does benchmark data promote awareness in your organization, but it can also support healthy competition among site managers to maximize energy performance, and demonstrate the fruit of your management efforts.
The impact of benchmarking energy performance is threefold. As mentioned already, the practice makes it possible to make the right changes to operations for greater efficiency, reducing energy waste. This translates to a reduced impact on the environment, shrinking carbon footprint which is key to many companies’ sustainability programs. Finally, it will help your bottom line, identifying wasteful behaviors that needlessly cost you money. In times like these, there is no reason to not explore how energy benchmarking might serve your business.
For more information, please contact Ed Schlect, Executive Vice President, Advantage IQ, Inc., www.advantageiq.com.
