developing a performance management framework for energy
TRANSCRIPT
Developing a Performance Management Framework for Energy and Carbon ReductionDavid Solsky – CEO
May 2011
Agenda
• Background
• What's driving global energy and carbon reporting
• Getting a handle on the data – A Measurement Framework
• Energy Audits as a source of data
• The role of disaggregated smart metering
• Analysing the data – a practical example
• Where to find the savings
• The Marginal Abatement Cost Curve
• Case Studies
• Tips for building a data management framework
About Us
• Global provider of web based, enterprise sustainability software
• Core technology platform was developed in 2003 for electricity smart meter reading and management
• Platform evolved to incorporate measurement and management of energy, carbon emissions, environmental and social responsibility data
• Flagship product is our Enterprise Sustainability Platform (ESP)
• Currently supporting data collection and reporting at more than 20,000 sites for over 100 clients globally
• Offices in London, New York and Sydney
• Global channel partner network across UK, USA, Asia and South Africa
• 35 employees (plus an extensive partner network)
CarbonSystems
Powering Business Sustainability
.
What’s driving global energy & carbon management
• Compliance driven carbon emissions reporting and trading schemes
• Australia (NGERS)
• United Kingdom (Carbon Reduction Commitment)
• United States (EPA GHG Reporting) and California AB32
• Singapore Energy Conservation Act 2013
• Rising Global Energy Costs
• Cost Saving opportunities – energy efficiency
• Competitive advantage
• Corporate Social Responsibility – stakeholder pressures e.g. Wal-Mart, National Resource Defence Council (NRDC), Apparel Coalition
The goalposts are shifting
Energy
Carbon
SustainabilitySingapore
Australia & UK
Global Brand Leaders
USA
• You can’t Manage............ what you don’t Measure
• We need better metering systems....currently only 5% accurate
• Management infrastructure is required
Rohit Razdan – McKinsey
• Measure Accurately!
• Be transparentMr Lee Eng Lock - Trane
• Develop a rules based approach to data management
• Good quality information, relies on high quality data
The Power of Information
1. The data is all non financial – its never been collected in a centralised data repository
2. The data is usually fragmented and decentralised – it resides with multiple stakeholders across the business
3. The supply chain is not yet geared up to provide data in a timely and easy to manage format
4. Data accuracy has not been a consideration due to the non financial nature of the data
The Data Challenge
The Sustainability Journey will require a broad spectrum of data
1. Developing a baseline from which develop a strategy
• Energy consumption
• Carbon emissions
2. Delivering financial grade business and compliance reports
• Supporting documentation and evidence packs
• Analytical review
3. Drive operational efficiency and cost savings
• Benchmarking data
• Metering data (interval)
• Qualitative data about the infrastructure that drives the consumption
• Project and investment data
4. Verify ROI and payback on sustainability initiatives
• Actual consumption at an infrastructure/device level
• Financial data – cashflows, assumptions
A Measurement Framework
Step 1
• Develop Baseline Energy & Carbon Footprint
Step 2
• Understand what drives footprint –infrastructure, regions, building type etc
Step 3
• Identify Project Opportunities – develop Marginal Abatement Cost Curves (MACC’s)
GHG Scope
The Role of Energy Audits
• investigating the usage of all types of energy consumed and energy using equipment within the building, complex or plant;
• identifying the energy usage of all major heating and cooling applications and its percentage against total energy use;
• identifying cost-effective measures to improve the efficiency of energy use;
• estimating the potential energy savings, indicative budget costs and payback periods for each recommended action; and
• reviewing energy management strategies, including monitoring systems and evaluation process.
Types of Energy Audits
• Overview or desktop audit
• Assess reasonableness of overall usage
• Compare with benchmarks
• Rough order of savings/costs
• Accurate to +-40%
• Cost $1,000 - $3,000
Level 1
• Identifies sources of energy to a site
• Amount of energy used
• Where it is used
• Identifies where savings can be made
• Preliminary assessment of savings/costs
• Accurate to +-20%
• Cost $2,000 - $10,000
Level 2
• Detailed analysis of energy usage
• Often requires specialists to carry out parts of audit scope
• Usually requires local metering or logging
• Provides financial grade justification for investment or performance contractor
• Firm estimate of savings/costs
• Accurate to +10% for costs and -10% for benefits
• Cost $5,000 - $25,000
Level 3
Metering is a strategic priority
• Utility (Elec, Gas, Water) smart metering is the only way to get a granular view of consumption at an infrastructure level
• Time of day usage is critical to understand infrastructure performance
• Correlation of meter data and temperature data provides deeper insight into performance in built environment
• Metering can be highly cost effective if coupled with infrastructure upgrade projects e.g. chillers, boiler etc
• Ensure that any major plant/equipment upgrade includes a meter to verify consumption, hence savings and ROI
• SP Services in Singapore have data for the 12,000 contestable meters in the local market
Identifying Savings OpportunitiesIn
vest
me
nt
$
Energy & Carbon Reduction Opportunity %
0-10%
10-25%
25%+
Behavioural Change, Education,
Performance Management,
Operations Management
Maintenance
Controls
Lighting
Optimisation
Insulation
Variable Speed Drives
Voltage Optimisation
Boiler and Chiller Upgrades
Building Mgmt Systems
Building Fabric
Onsite Generation e.g.
Cogen, CHP
Renewable Energy
Plant Upgrades
The MACC Background
A Marginal Abatement Cost Curve is a set of options available to an economy to reduce pollution. They are valuable tools in understanding emissions trading, driving forecasts of carbon allowance prices, prioritizing investment opportunities, and shaping policy discussions.
Initially developed to analyse abatement opportunities at a global or country level, they are rapidly becoming the tool of choice for companies to assess energy and carbon reduction opportunities.
MACC Example
The cost and size of emission reduction opportunities in the US economy 2030
Marginal Abatement Cost Curves (MACC’s)
Developing a MACC – what's required?
Quantitative Metrics
Infrastructure Known State
Database of Possible
Interventions
Dye Mill in China
Tips for Successful Projects
Project Ownership and Leadership Is Key
• Executive sponsorship is key
• Visibility to the board is preferable
• This should ideally not be viewed as a “green project”, but a business initiative
Build a Balanced Project Team
• Key Stakeholder Groups to include:
• Property/Facilities
• Energy Management
• Finance/Procurement
• Sustainability
• Executive Management
Screenshots
Screenshots
Screenshots
Summary
• Think beyond energy.....its a major piece of the puzzle....but not the only piece
• Develop a company wide, integrated approach to measuring sustainability performance
• If possible, develop a single platform to capture and manage all sustainability data to ensure a holistic approach to performance management
• Reduce the time and cost of managing data – allow your people to focus on the strategic elements of sustainability management and the reduction projects
• Move towards a “rules based” management approach – manage by exception
• Validate performance to external benchmarks, and don't be afraid to collaborate
