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Energy Management
Driving Operational & Financial Performance
Don Macdonald
Sustainability & Energy Program
Director
Don.m...
Market Adoption Indicators
2014 certifications
ISO 9001
ROI benchmarks 9-13%
ISO 14001
ROI Benchmarks 7-12%
CSR

ISO 50001...
Multi-Nationals Adopting ISO 50001 - > 4000 to Date
•• 3M
Commercial Superior
3M
Energy Performance Pilots: •• Coca-Cola
C...
Benchmark EnMS Maturity

Updated
2011, 7%
Energy
Energy efficiency Benchmarking Maturity

EDF, 2013
Financial Criteria Benchmarking Maturity

EDF, 2013
Re Deployment of Operating Cost Savings

EDF, 2013
Energy Investments & Operations
Why Energy Audits Aren’t Enough

Source: UNIDO 2010

Source: UNIDO

8
Source: DOE
Organizations That Measure ROI/IRR
of CSR 2009 - 2011

• Proportion of clients
reporting Program ROI / IRR
increasing
• In...
Executive Leadership is critical to ‘Mind the Gap’
Facility managers typical energy champions
Harnessing the Power of a Process
Business processes for competitive advantage:
• Six Sigma
• Lean Manufacturing
• Continu...
State of the Art –
Inconsistent use of Management Processes
• Training for employees: 76%
•
•
•
•
•
•
•
•
•

40
35
30
25
2...
Management Systems Strategy –
Technical and Behavioral

Focus EnMS on plants,
Focus EnMS on plants,
buildings and operatio...
Energy Management System
Best Practices
Step 1 – Commitment
Step 2 - Data
Step One:
Secure Commitment from Top Management
• Set Energy Policy
• Define Scope and B...
Step 3 – Energy Use
Step Three:
Identify Key Energy Uses
• Facilities
• Systems
• Equipment
• Processes
• Relevant Variabl...
Step 4 - Baseline
Step Four:
Establish a Baseline
•

Reference point for energy performance

•

Outlines current energy pe...
Step 5 - Opportunities
Step 6 - Prioritize
Step Five:
Identify Energy-Saving Opportunities
•
•
•

New Sources
Renewable So...
Implementation and Operation

•
•
•
•
•
•

Competency, Training & Awareness
Communication
Documentation, Control of Docume...
Checking and Management Review
 Monitoring,
Measurement and
Analysis

 Non-Conformance,
Correction, Corrective and
Preve...
EnMS and Other Standards
Common Elements with other ISO Systems:
ISO 9001:2008

ISO 14001:2004

• Design

• Legal / Other ...
Building a Best in Class
Energy Management System

23
Building a Best in Class
Energy Management System

24
EnMS & SEP Best Practice Mapping
Organizational level
Barriers

Best Practices
EnMS & SEP Best Practice Mapping
Capital level
Barriers

Best Practices
EnMS & SEP Best Practice Mapping
Data level
Barriers

Best Practices
EnMS & SEP Best Practice Mapping
Communication/PR level
Barriers

Best Practices
The Superior Energy
Performance (SEP) Program
ISO 50001 /SEP
Demonstration sites US
Source: DOE
DOE SEP Pilot
Results

Source: DOE
Results – Energy Cost Savings

Source: DOE
Shareholder Perspectives
EnMS – Accounting for Value
•

Profit Margin
– Procurement - energy hedging
– Product design can ...
Results – Costs of Implementation
In most cases ROI < 2 Yrs.

Source: DOE
Case Studies, Results &
Feedback from the Field
Feedback from Facilities
Staff Support
• A cross-functional energy
management team is needed for
effective implementation....
AU Optronics, Taiwan
St. Mary’s Cement
Save Energy Now – Best Practice Alternative
Data Center Assessment Summary Verizon
Save Energy Now – Best practice Alternative
Data Center Assessment Summary Lucas film
Briggs & Stratton – Best Practice Alternative
Dahanu Power Station, India
Delta Electronics
Schneider Global HQ

÷4
Final energy consumption
vs. previous sites in the area

Certified
ISO14001
HQE Exploitation
NF EN...
Schneider Electric Smyrna, TN
ISO 50001 Certified, SEP Pathway
Haynes International
Pfizer Ireland – ISO 50001
Reduced energy
and resource
intensity,
decrease CO2
emissions.
Used ENERIT ISO
50001 IT Platfor...
CNH / Fiat Certification – Building into CSR
UL DQS Certified first plant
.

• Sustainability
CNH is part of Fiat Industri...
Volvo
•

Absolute energy use and
intensity - 38%, 2001 to
2010

•

As part of U.S.-DOE’s
Save Energy Now,
accomplished 10-...
Energy Management within ISO 14001 Programs
Mass Transit Agency Leadership
LA Metro, NY MTA
DOW
UL DQS –
Integrity, Competence and Trust in Management Systems




2800 Staff / 2300 global Auditors, 76 offices in 55 c...
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ISO 50001 Energy Management, SEP Executive Briefing - UL DQS Inc.

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ISO 50001 is designed to help companies enhance their use of energy-consuming assets, evaluate and prioritize the implementation of energy-efficient technology, and promote efficiency throughout the supply chain.

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  • Here is a well known illustration on the typical cycle of poor decision making (in the absence of continuous improvement processes) and the resulting costs over time.
    Firms of different sizes and complexities often focus continuous energy management efforts within selected divisions or processes all the way across similar operations over multiple geographies in benchmarking style efforts.
    We are seeing up take of multiple facilities (some cases 10-50 in scale) use such benchmarking to drive process improvement, costs and even product design issues depending on the industry.
    The key point, with continuous management processes these efforts simply return to the mean.
  • These are some examples of financial drivers we see firms asking for specific dollar / Euro assignments being made much, similar to financial reports style.
    We for example recently awarded a very large transportation agency an ISO 14001 certificate and they demonstrated a significant ROI on the investment, documenting direct and in-direct costs.
    We are now looking to support them in rolling these very energy improvement processes into the platform (no pun intended) to further drive improvements.
  • Don
  • Transcript of "ISO 50001 Energy Management, SEP Executive Briefing - UL DQS Inc."

    1. 1. Energy Management Driving Operational & Financial Performance Don Macdonald Sustainability & Energy Program Director Don.macdonald@us.dqs-ul.com http://www.linkedin.com/pub/don-macdonald-leed-ap-r
    2. 2. Market Adoption Indicators 2014 certifications ISO 9001 ROI benchmarks 9-13% ISO 14001 ROI Benchmarks 7-12% CSR ISO 50001 • Published ROI Data Suggests 6.5-17% range expected within 1-2 yrs. • Performance metrics (self-defined) incorporated • Web-based & continuous performance tools • Measured benchmarking • Integrated with ISO 9001, 14001, & SEP, CSR Environ & GHG Mgmt Energy Mgmt LEED Quality Risk Mgmt
    3. 3. Multi-Nationals Adopting ISO 50001 - > 4000 to Date •• 3M Commercial Superior 3M Energy Performance Pilots: •• Coca-Cola Coca-Cola •• Alcoa Alcoa •Cleveland Clinic •• Allsteel --HON Allsteel HON •• Amcor PET Amcor PET •US GSA •• Bentley Prince Street Bentley Prince Street •• Cook Composites •Grubb & Ellis Company Cook Composites •• Sikorsky Sikorsky •Marriott International, Inc. •• OLAM Spices OLAM Spices •• MedImmune MedImmune •MIT Campus’s •• Cummins Cummins •• Ingersoll Rand Ingersoll Rand •Target Corporation •Wal-mart Stores, Inc. ISO 50001 ISO 50001 •• CNH / /Fiat CNH Fiat •• Schneider Schneider •• Siemens Siemens •• ABB ABB •• Didion Milling, Inc Didion Milling, Inc •• Kenworth Trucks Kenworth Trucks •• Dow Chemical Dow Chemical •• Eaton Eaton •• General Dynamics General Dynamics •• Neenah Foundry Neenah Foundry Company Company •• Free scale Semi Free scale Semi •• Haynes International Haynes International •• Owens Corning Owens Corning •• Holcim Holcim •• Lockheed Martin Lockheed Martin •• Cooper Tire Cooper Tire •• Republic Conduit Republic Conduit •• Bridgestone Tire Bridgestone Tire •• Nissan Nissan •• Schneider Electric Schneider Electric •• Spirax Sarco Spirax Sarco •• Traco Traco •• Volvo Volvo •• World Kitchen World Kitchen •• Harbec Harbec •• United States Mint United States Mint
    4. 4. Benchmark EnMS Maturity Updated 2011, 7% Energy
    5. 5. Energy efficiency Benchmarking Maturity EDF, 2013
    6. 6. Financial Criteria Benchmarking Maturity EDF, 2013
    7. 7. Re Deployment of Operating Cost Savings EDF, 2013
    8. 8. Energy Investments & Operations Why Energy Audits Aren’t Enough Source: UNIDO 2010 Source: UNIDO 8
    9. 9. Source: DOE
    10. 10. Organizations That Measure ROI/IRR of CSR 2009 - 2011 • Proportion of clients reporting Program ROI / IRR increasing • Internal resource constraints continue, functional silo’s • Breadth of adoption increasing
    11. 11. Executive Leadership is critical to ‘Mind the Gap’ Facility managers typical energy champions
    12. 12. Harnessing the Power of a Process Business processes for competitive advantage: • Six Sigma • Lean Manufacturing • Continuous Improvement 40% • ISO 9001 • ISO 14001 • Plan-do-check-act Formal energy management standards (ANSI, BSI): 35% 30% 25% 20% 15% 10% 5% 0% Energy Management Standard Continuous Improvement ISO 9001 or 140001 Six Sigma Lean JCI Study - 83 Organizations surveyed…
    13. 13. State of the Art – Inconsistent use of Management Processes • Training for employees: 76% • • • • • • • • • 40 35 30 25 20 Formal review of energy policy - CSR: 47% Incentives for energy efficiency success: 45% Effective & empowered energy team: 41% Enterprise level energy data: 29% Corporate reduction goal: 28% Energy action plan for organization: 28% Formal energy policy: 27% C-level responsibility: 27% Adopted energy standard: 27% s t z i n a g O f o r e b m u N 15 10 5 0 0-2 3-4 5-6 7-8 9-10 Energy Management Score JCI Study - 83 Organizations surveyed… Result: Lower ROI, Mixed Results
    14. 14. Management Systems Strategy – Technical and Behavioral Focus EnMS on plants, Focus EnMS on plants, buildings and operations buildings and operations above target. above target. ••DriveProcess Improvement Drive Process Improvement ••DriveROI/IRR Drive ROI/IRR ••DriveIntegrated CSR Drive Integrated CSR ••Linkageto GHG Linkage to GHG
    15. 15. Energy Management System Best Practices
    16. 16. Step 1 – Commitment Step 2 - Data Step One: Secure Commitment from Top Management • Set Energy Policy • Define Scope and Boundaries Step Two: Collect, Track, and Analyze Energy Data • Current and past energy use, consumption • Estimate future energy use, consumption
    17. 17. Step 3 – Energy Use Step Three: Identify Key Energy Uses • Facilities • Systems • Equipment • Processes • Relevant Variables • Personnel (including on-site Contractors)
    18. 18. Step 4 - Baseline Step Four: Establish a Baseline • Reference point for energy performance • Outlines current energy performance • Predicts future energy performance • Provides benchmarking method
    19. 19. Step 5 - Opportunities Step 6 - Prioritize Step Five: Identify Energy-Saving Opportunities • • • New Sources Renewable Sources Alternative Sources Step Six: Prioritize Opportunities • Return on Investment • Ease of Implementation
    20. 20. Implementation and Operation • • • • • • Competency, Training & Awareness Communication Documentation, Control of Documents Operational Control Design Procurement
    21. 21. Checking and Management Review  Monitoring, Measurement and Analysis  Non-Conformance, Correction, Corrective and Preventive Action  Evaluation of Compliance  Control of Records  Internal Audit  Management Review
    22. 22. EnMS and Other Standards Common Elements with other ISO Systems: ISO 9001:2008 ISO 14001:2004 • Design • Legal / Other requirements • Procurement • Significant Energy Use • Management Responsibility • Objectives, Targets, Action Plans • Evaluation of Compliance
    23. 23. Building a Best in Class Energy Management System 23
    24. 24. Building a Best in Class Energy Management System 24
    25. 25. EnMS & SEP Best Practice Mapping Organizational level Barriers Best Practices
    26. 26. EnMS & SEP Best Practice Mapping Capital level Barriers Best Practices
    27. 27. EnMS & SEP Best Practice Mapping Data level Barriers Best Practices
    28. 28. EnMS & SEP Best Practice Mapping Communication/PR level Barriers Best Practices
    29. 29. The Superior Energy Performance (SEP) Program
    30. 30. ISO 50001 /SEP Demonstration sites US
    31. 31. Source: DOE
    32. 32. DOE SEP Pilot Results Source: DOE
    33. 33. Results – Energy Cost Savings Source: DOE
    34. 34. Shareholder Perspectives EnMS – Accounting for Value • Profit Margin – Procurement - energy hedging – Product design can embody energy considerations – Supply chain costs - energy, raw material & transportation – Extend QMS and EMS systems whether certified or “Self Declared” • Investment Fixed Capital – Energy process modifications often lead to end-of-the-pipe pollution control facilities • Tax Rate – Availability of grants, utility program credits, insurance ratings • Sales Growth – Life cycle energy reductions embedded in product manufacturing – Competitive advantage, less energy and related raw material processing • • Investment Working Capital – Reduced excess energy and materials, waste prevention, recycling, raw material substitution Cost of Capital – Improve loan characteristics – Energy risk management attracts shareholders which leads to lower cost of debt and equity – Non-disclosure of energy efficiency, like environmental performance may have short-term impacts that lead to premium capital costs
    35. 35. Results – Costs of Implementation In most cases ROI < 2 Yrs. Source: DOE
    36. 36. Case Studies, Results & Feedback from the Field
    37. 37. Feedback from Facilities Staff Support • A cross-functional energy management team is needed for effective implementation. – e.g., plant energy leader, plant leader, quality leaders, engineers. • All types of employees can contribute to energy management – Line and production workers add separate sets of expertise Influence of Energy Management • Managing energy has similar structure as managing cash, safety, health, environment and quality. • Energy management becomes a way of doing business, instead of making improvements on projectby-project basis. • Energy management becomes a shared responsibility across operations, maintenance, finance. Costs • Capital investment is not always required to achieve cost savings. • Change of mindset: lower price per unit of energy is not the only way to reduce energy costs Other • R&D should consider use of energy to produce a product. • Achievements can bring recognition across the organization.
    38. 38. AU Optronics, Taiwan
    39. 39. St. Mary’s Cement
    40. 40. Save Energy Now – Best Practice Alternative Data Center Assessment Summary Verizon
    41. 41. Save Energy Now – Best practice Alternative Data Center Assessment Summary Lucas film
    42. 42. Briggs & Stratton – Best Practice Alternative
    43. 43. Dahanu Power Station, India
    44. 44. Delta Electronics
    45. 45. Schneider Global HQ ÷4 Final energy consumption vs. previous sites in the area Certified ISO14001 HQE Exploitation NF EN16001 ISO 50001: first certified building in the world! 80 kwh/m²/ an Final energy consumption ROI in 5 to 7 years
    46. 46. Schneider Electric Smyrna, TN ISO 50001 Certified, SEP Pathway
    47. 47. Haynes International
    48. 48. Pfizer Ireland – ISO 50001 Reduced energy and resource intensity, decrease CO2 emissions. Used ENERIT ISO 50001 IT Platform to facilitate certification.
    49. 49. CNH / Fiat Certification – Building into CSR UL DQS Certified first plant . • Sustainability CNH is part of Fiat Industrial – fully integrating the environment and society with economic objectives. 2010 Fiat Sustainability Report. 49 • Certified Management Systems Commitment to sustainability includes having our manufacturing activities performed in responsible facilities that are certified to meet environmental, quality, safety and now energy management system standards.
    50. 50. Volvo • Absolute energy use and intensity - 38%, 2001 to 2010 • As part of U.S.-DOE’s Save Energy Now, accomplished 10-year goal of 25% improvement in energy intensity in 2010 (29.6%) • Goals 2010 to 2012 reduce idling losses – or energy use outside of production – by 50 percent by 15% per unit produced against a 2008 baseline.
    51. 51. Energy Management within ISO 14001 Programs Mass Transit Agency Leadership LA Metro, NY MTA
    52. 52. DOW
    53. 53. UL DQS – Integrity, Competence and Trust in Management Systems   2800 Staff / 2300 global Auditors, 76 offices in 55 countries Over 20,000 customers, 100 countries
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