Why Should Organizations Establish an Energy Efficiency Program Management Framework?
Customer InsightsMay 14, 2021
Improved energy efficiency is the ‘holy grail’ of effective energy sustainability. Efficiency serves two very important goals:
Reduced carbon footprint through reduced consumption
Long-term cost structure reduction
Organizations such as American Council for an Energy Efficient Economy (ACEEE) estimate an untapped energy savings potential of as much as 30% of usage. Although very few organizations would say that they use energy as efficiently as they can, most everyone recognizes that there are substantial further efficiencies to be gained when it comes to energy consumption at facilities. Internal inertia most often seems to prevent organizations from realizing the many benefits of energy efficiency gains. This in turn, arises from a lack of effective efficiency program structures – structures that are designed to overcome internal inertia and enable the identification, screening, evaluation, selection and execution of viable energy efficiency projects.
However, there are ways through which organizations can overcome the inertia that inhibits efficiency gains by instituting and operating a rigorous and complete Energy Efficiency Program Management Framework, thus unlocking sustainability and cost savings benefits from reduced energy consumption. The development and application of this framework can ensure that organizations fully realize energy savings potential within their facilities.
How will it work?
An effective Energy Efficiency Program Management Framework starts with the establishment of objectives and associated commitments, and then follows with the development of a consistent project evaluation framework, providing agency and authority to responsible parties to seek, evaluate and forward projects, and ensures accountability through transparent reporting and evaluation. We describe each of these more fully below:
Step 1: Establishment of Objectives and Commitments
The most important factor to ensure that inertia does not halt energy efficiency efforts downstream is to establish strong, specific and time-bound commitments upstream. This includes gauging latent energy efficiency (EE) savings potential and instituting measurable, specific and achievable energy efficiency objectives. Top-level commitments will set the foundations and provide support for change agents to push through resistance that is distributed throughout the organization, minimizing opportunities for inertia to block progress.
Step 2: Development of a Consistent Project Evaluation Framework
By developing a consistent, standardized project evaluation framework, organizations can set up structures that provide clear ‘GO’ or ‘NO GO’ signals. It presents them with a step-by-step approach towards initiatives, including project savings, incentives and benefits. This also serves to eliminate inertia, as doubt and ambiguity regarding the viability or desirability of moving projects forward is removed. Also, by establishing frameworks in advance of execution of initiatives through a thoughtful, deliberative process that engages stakeholders across the spectrum, high-value, balanced criteria and measures can be applied, and downstream buy-in and objection avoidance can be optimized.
Step 3: Delegation of Agency and Authority to Responsible Parties
There must ultimately be a force that drives execution of an organization’s energy efficiency program, and this force must be enabled and set up for success by granting of a mandate – through agency and authority. A responsible party, or parties that are unified under an organizational structure, must be given a clear mandate, direction and authority to seek, evaluate and forward energy efficiency projects. And once this responsible party finds projects that satisfy the criteria set out in the evaluation framework, then they have the authority to push that project forward. This process continues until all program objectives and commitments are met. This is one of the most important steps in the process and often overlooked by organizations. To summarize:
Identify key personnel in the organization and give them the tools needed to achieve objectives
Organize teams with clear roles and responsibilities to implement set objectives and commitments
Set up decision-making and communication procedures to ensure that there is clear responsibility, authority and accountability for follow through
Step 4: Accountability through Transparent Reporting and Evaluation
Finally, ultimate success of an organization’s energy efficiency program rests upon ultimate accountability towards achieving the original objectives, which can only be realized through measurement, reporting and evaluation.
Consequently, success of the program will best be assured by establishing, as part of the total program framework, clear measures for progress against objectives based on completed projects and estimated and actual energy and cost savings, along with a defined cadence for reviewing these measures and associated progress. Progress can also be measured by evaluating the pipeline of potential projects and associated potential value. In all cases, regular, high-level review will provide both accountability and support for all whose efforts are integral to and necessary for the successful accomplishment of the program objectives.
Solutions for Success
To date, most organizations have considered energy efficiency projects only from an execution mindset, trying to get buy in from the facility’s personnel, arranging for funding, evaluating utility incentives, looking for the most cost-effective contractors and not knowing if all of their investments are going to show tangible returns. Those are necessary and important considerations, but our contention is that the planning and the thought process needs to start much earlier, with a programmatic approach outlined here.
This is especially important for organizations that operate multiple facilities, as it helps implement a consistent framework across all sites, without prejudice and with utmost confidence in their decision making. Only then can they begin to emerge from their current state which has barriers toward energy efficiency and progress towards a future state with long-term cost savings, enhanced sustainability and improved operations. The table below summarizes the evolution of that process.
Let’s Get Started Today
This step-by-step approach to establishing your Energy Efficiency Program Management Framework makes it easy to get started and to get to positive results for your organization. AEP Energy can get working on identifying your unrealized savings potential, and helping you establish concrete and achievable goals for improved sustainability and lasting cost reductions, along with a realistic pathway for realizing these goals. Through our holistic and programmatic approach, we will work with your key stakeholders through each step to move from current state inertia to future state possibilities through establishment of the Energy Efficiency Program Framework. Please contact George Deljevic, Vice President Energy Services at email@example.com if you have any questions. If you’re already working with an AEP Energy Sales Representative, they will happily provide more information.
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