Delivering energy efficiency: why do we leave billions on the table?
03 October 2013
Author: Mark Coyne, technical director, Dalkia Ireland
While 97 per cent of climate-science papers agree that global warming is man-made, it is often difficult for consumers and businesses alike to draw a cause and effect linkage between our everyday actions and their effect on the environment. However, at a time when we are still reeling from the worst economic crisis in living memory, a much more pressing concern is the direct link between our actions and our finances.
One area where this linkage should be very strong is energy efficiency – it can achieve direct cost savings to the end user, as well as substantial environmental benefits. If so, then why does the €350 million in annual net benefits identified in a 2008 study remain largely untapped?
Like many simple questions, the answer is multi-dimensioned and complex – ranging from lack of access, finance and inertia, to uncertainty on implementation costs and uncertainty of future energy costs (which drives benefits). However, this article addresses one of the primary causes of inaction, which is lack of knowledge and expertise.
This deficit covers lack of knowledge of what and where the energy efficiency savings are, how to estimate their benefits, how to convince stakeholders to proceed with them, how to implement energy efficiency projects and how to validate that the projects are delivering the savings that were anticipated.
As problem solvers, engineers have many of the core competencies to address the knowledge gaps (for example project management, cost control and rational analysis). However, it is only over recent years that colleges and universities have been producing graduates and post-graduates specifically in the fields of energy management and energy efficiency, so that the full suite of skills are being made available to employers and businesses alike.
However, there remains a deficit in formally trained engineers in comparison with the scale of the opportunity available. Likewise, it is really only in the last decade that businesses and organisations have started to emphasise energy management and/or their carbon intensity as a priority. Hence, engineers with the right training and the right experience are still not in the mainstream. So what exactly do those skills look like?
PRINCIPLES OF ENERGY MANAGEMENT
A starting point in terms of the skills to deliver energy efficiency upgrades is a fundamental understanding of the principles of energy management. Here the analogy of the ‘onion layer’ can be useful. At the core of the onion is having an understanding of what the energy is being used for – if it is a factory, for example, the energy might be used to produce widgets, but there will be sub processes below that (for example milling, moulding and polishing).
It is only after this core has been looked at in terms of optimising energy efficiency of the process that the outer layers should be studied further. The next layer on the onion might be energy distribution – in the case of a commercial building, this might be how heating and cooling circuits are distributed around the building. Are the distribution temperatures optimal, are the routes optimal and are the circuits adequately insulated?
Another layer might be utility plant, typically found in a plant room or boiler room. For example, a pharmaceutical plant will be a major consumer of steam, compressed air and chilled water and it will have production plant to produce these utilities. Developing an understanding of how optimal (or otherwise) this production plant is will be key to addressing energy efficiency.
The next layer might be operation and maintenance and the effect that these have on energy efficiency. For example, operating compressed air plant at too high a pressure will result in energy inefficiency; however, it is only by understanding the process needs that we can develop an understanding of what too high actually is.
Another layer is an energy management process – setting indicators to identify what a good performance looks like, measuring performance so that it can be managed, identifying deviations from the desired performance and taking actions to get the performance back on track – the so called ‘plan, do, check, act’ loop.
A final layer in the onion is continuous improvement – looking out for opportunities for a step changes in performance (for example, a significant investment in an energy efficiency upgrade) that could yield benefits.
Another fundamental skill in delivery energy efficiency is identification of the opportunity, known as energy auditing. For example, while we may all have an understanding that changes to our lighting, or how we use it, could lead to energy savings, what exactly are the costs, how do we quantify them and how do we ensure that the savings will be realised?
ENERGY EFFICIENCY IN COMMERCIAL SECTOR
Using our lighting example, while it represents the single biggest energy efficiency opportunity in the commercial buildings sector, it still needs to be made specific to the actual building being considered. In an existing building, it means understating how existing lighting is being used, hence a survey of light fittings, their consumption while running and a calculation of the running time (or burn hours) of the lighting is required – not always an easy thing to estimate.
Selection of the optimal technology is part of the auditing process (for example LED or high efficiency fluorescent fittings, presence detection or daylight sensing). Technology drives installation costs, operating costs and replacement costs, as well as the benefits.
Modelling of the costs and the benefits is a skill required to deliver energy efficiency projects. Ultimately, this boils down to a financial appraisal comparing an ‘as is’ scenario, versus an ‘as will be’ scenario, and is essentially capturing the output of the auditing process (investment costs, operation and maintenance costs versus savings compared to the current situation).
Standard financial metrics are used by organisations to make decisions on whether to proceed with the projects or not, such as payback period, internal rate of return and net present value, so familiarity with these metrics are essential for engineers to engage with decision makers.
Once a decision is made to proceed with a project, delivery becomes focused on more core project management skills. These skills include capturing the decision and measures of success or failure of the project into a project charter, management and communication with stakeholders, managing and tracking of schedule, costs and quality, and managing subcontractor or internal resources responsible for implementing the project.
Assuming a perfect delivery of the project, however, is only the start of energy efficient projects – their benefit is only delivered over time, which brings in monitoring and targeting skills. This is the establishment of key performance indicators (KPIs) and measurement of parameters like energy consumption from meters, which will have been identified in the design process and installed as part of the project.
Over €2 billion of annual savings are anticipated to be delivered in the Irish economy by 2020. Without the severe contraction in our economy and subsequent demand destruction in demand (13 per cent reduction in final energy consumption from 2007 to 2011), the challenge to deliver our 20-20-20 energy reduction target would be daunting. However, this is still a very stretching target that requires focused delivery.
Addressing the skills gap through targeted seminars such as the Energy & Environment Division’s CPD seminar is just one of the many ways these skills will need to be fulfilled in the coming years.
Mark Coyne joined Dalkia Ireland as technical director in May 2006 with responsibility for the development and delivery of energy services and for technical competency development within the organisation. Previous to this, he spent 13 years with ESB International as key account manager and various project management and commercial roles within the power plant engineering division. Coyne is a chartered electrical engineer with postgraduate diplomas in project management and leadership/management.http://www.engineersjournal.ie/2013/10/03/delivering-energy-efficiency-why-do-we-leave-billions-on-the-table/http://www.engineersjournal.ie/wp-content/uploads/2013/09/energy-money-1024x1024.jpghttp://www.engineersjournal.ie/wp-content/uploads/2013/09/energy-money-300x300.jpgElecenergy,Engineers Ireland,industry