A Practical Guide to Preparing and Presenting Energy Investment Proposals

1. 2016 Investing in Energy
A Practical Guide to Preparing and Presenting
Energy Investment Proposals

2. Outline
• Energy Investment proposals often fail
• A new guide “ Investing in Energy” can help
• The guide presents a simple framework for
successfully preparing and presenting energy
investment proposals

3. Question
“In your view, what are the reasons why investment
proposals for energy-saving activities fail?”
Energy investment proposals seem to fail quite
often….

4. Some common Causes of
Failure
• Poor or incomplete analysis
• Inadequate financial return
• Inadequate link with corporate strategy
• Benefits not presented to address other peoples
priorities
• Insufficient attention to influencing Others
• The legacy of previous failed Investments

5. But…..
• Immediate Quantifiable savings can be made
• Lighting 10%-50%
• Motors 5%-50%
• HVAC 10% - 30% etc.
• These savings go straight to the bottom line (profit)
• Energy reduction can confer other benefits and may be
linked to other priorities
• Controlling energy use is becoming increasingly importrant
from a strategic perspective

6. A New Guide from SEI
• “Investing in Energy”
• A new package of tools designed to assist
engineers and technical managers to prepare
and present energy investment proposals
• Three Components
• The guide
• A set of teaching notes
• Overhead slides and supporting material

7. 1. Gather all necessary information
2. Assess the proposal realistically
3. Develop an influence strategy
4. Present the proposal so as to win support
5. Follow through
All of these steps are vital to success!
A Five–Stage framework for Making
successful investment proposals:

8. • Options: what different priorities/actions?
• Options: what different solutions?
• Strategic context in company
• Issues facing the company
• Information on appraisal process in company
• Comprehensive cost and saving data
• Evidence that proposal is good
1. Gather all necessary information

9. 2. Assess the proposal realistically
• Do as much of the assessment yourself.
• Ask for help where necessary - but stay involved.
• Don’t be afraid of more complicated assessment
methods.
• Make sure you use current evaluation criteria.
• Be your own harshest critic.

10. • Attend to this right at the start.
• See it as an integral part of each phase of the
process.
• Know who will influence/block/favour the
proposal, within the process.
• Acknowledge the formal and informal influencing
processes.
• Don’t leave it up to the written proposal on its
own!
3. Develop an influence strategy

11. • Invest time and effort into both written and verbal
presentation of ideas.
• Avoid unnecessary jargon/detail.
• Address others’ needs and concerns.
• Present the benefits very clearly.
• Economic arguments are important, but they
aren’t sufficient on their own.
• Do as much as possible yourself!
4. Present the proposal so as to win
support

12. Assuming you are successful:
• Make sure you are ready to start quickly.
• Include all those needed in order to proceed with
the project.
• Establish systems to track progress and the
ongoing performance.
• Report on performance - the bad as well as the
good!
• Record the costs and the gains.
5. Follow through

13. Basic Financial Appraisal
Techniques
• Chapters 3 and 4 of the guide explain the main financial indicators in a
clear and simple way:
• Fixed versus variable costs
• Cash flow model
• Simple Payback
• Accounting Rate of Return
• Net Present Value
• Internal Rate of Return
“Financial measures are critical to the assesment of
investment proposals yet many technical
managers feel uncomfortable with these.”

14. Conclusion
• “Investing in Energy” is a new guide from SEI which
will help you prepare and present successful energy
investment proposals.
• In addition to providing a hands on manual “Investing
in Energy” also contains teaching materials for
training others.
• Additional copies of “Investing in Energy” can be
obtained from Sustainable Energy Ireland