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Russell EMW 2012
- 3. 3 About Christopher Russell, C.E.M., C.R.M. n Independent consulKng since 2006 Principal, Energy Pathfinder n VisiKng Fellow, ACEEE, 2012 - n Energy Manager, Howard County, MD, 2010-2012 n Director of Industrial Programs, Alliance to Save Energy, 1999-2006 n Comm. & Indus. Program Manager, American Gas AssociaKon, 1995-1999 n MBA, M.A., University of MD; B.A., McGill University Published Feb 2008 Published June 2010 ©2011 Energy PathFINDER
- 4. The Business-as-Usual ImplementaKon Rates* 4 * ImplementaKon rates are percent of energy volume unless (*) percent of projects SOURCE: C. Russell, “North American Energy Audit Best PracKces” ©2011 Energy PathFINDER 0% 20% 40% 60% 80% 100% PGE (CA) TAMU (TX) NYSERDA (NY) BC Hydro (BC) Duke Energy (NC) Enbridge Gas (ON) SCMEP (SC) XCEL (MN) ETAC (PA) NRCan
- 6. Most Energy Audits End up CollecKng Dust on a Shelf: WHY? • Lack of a clear agenda: Lack of focus within scope. To what end: Savings? ProducKvity? Accuracy? No clear “ownership” of the results • Failure to prepare staff for the idea of an energy audit Is this a witch hunt, or what? Will the results embarrass me? • A dense, technical document that only an engineer could understand • Lack of exit discussion with key managers: – Discuss findings, weed out opKons with “poliKcal” issues – Link the findings with other business prioriKes: What’s in it for YOU. 6 ©2011 Energy PathFINDER
- 8. About Energy Decision-Making NOTICES HIGH ENERGY COSTS ü EVALUATES OPPORTUNITIES ü PROPOSES SOLUTION ü POSES POTENTIAL VETO n.a. PAYS TO IMPLEMENT ü IMPLEMENTS ü MAINTAINS ü RECEIVES BENEFIT ü ü ü ü ü ü ü ü ü ü n.a. ü ü ü ü ü ü ü ü ü ü HOME- OWNER TYPICAL ORGANIZATION ü ü= STRONG INVOLVEMENT = MODEST INVOLVEMENT 8 ©2011 Energy PathFINDER
- 10. The “One Department” Syndrome • Managers pre-suppose what energy cost-control entails • Assign energy cost-control to ONE department • Turf issues are a fact of life • So: that ONE department: – sKcks to its turf – uses its exisKng budget – uses its exisKng talents and procedures – accomplishes a fracOon of potenOal energy savings 10 ©2011 Energy PathFINDER
- 12. QuesKons You Need to Ask • How do energy and energy decisions impact your business? • OpKons for taking acKon? • Delegate to whom? • Metrics to demonstrate progress? • CooperaKon across departmental lines? • Prerequisite organizaKonal changes? • Top management support? 12 ©2011 Energy PathFINDER
- 13. What is a Business Plan? • A blueprint for acKon • CoordinaKng stakeholders for common goals • Framework for: – EducaKng stakeholders – Defining goals – BudgeKng resources – Recognizing hurdles – Defining accountabiliKes – IdenKfying rewards 13 ©2011 Energy PathFINDER
- 14. You DO NOT Need a Business Plan If… • All the key decision-makers fully understand: – What an energy audit is – What it recommends, and – The implicaKons for business performance • It’s automaKcally clear to everyone involved: – Who will do the work – How the implementaKon will impact operaKons – The financial impact – Who will pay for it – Who will book the value of the results 14 ©2011 Energy PathFINDER
- 15. Business Plan Strategy: SCENARIOS • Business as usual: Simply present a list of “projects,” or… • Organize recommendaKons into scenarios, each reflecKng a different energy management strategy. For example: • Scenario 1: Emphasize advanced technology capital projects. • Scenario 2: Emphasize less costly operaKons and maintenance (O&M) iniKaKves. • Scenario 3: PrioriKze improvements that are least Kme-intensive or pose the least interference with facility operaKons. • Scenario 4: PrioriKze measures that are supported by available rebates and incenKves 15 Develop scenarios that appeal to key decision-makers’ agendas ©2011 Energy PathFINDER
- 16. Business Plan Strategy: In-House or Out-Source? • Who brings the most comprehensive experKse to the task? • What represents the most value: – CHEAP vs. FAST vs. RISK • Whose recommendaKons represent ulterior moKves or hidden agendas? 16 16 STAFF VENDORS CONSULTANTS ©2011 Energy PathFINDER
- 17. CommunicaKon Formats • Elevator Pitch – concise descripKon of outcomes benefits and the problem that they solve • Graphic PresentaKon – PowerPoint with key graphs, images, stats, core messages • Report document – For corporate/external stakeholders. Magazine format – narraKve, bold headers, text boxes for key concepts, photos of key opportuniKes • Intranet – Internal readers only. Performance scorecard, news updates, links to key resources 17 ©2011 Energy PathFINDER
- 19. Business Plan Document Outline • Cover Page • Table of Contents • ExecuKve Summary • Outline of RecommendaKons • Issues and OpportuniKes • ImplementaKon Milestones and Plan • Technical & Financial Appendices 19 ©2011 Energy PathFINDER
- 20. Cover Page • Look and feel of the company’s brand • Title that’s meaningful and inspiring: (How exciKng is “Level One Energy Audit?”) Try these: – “Leveraging $200,000 in Annual Energy Savings” – “BoosKng OperaKng Income by 12% in 2010” – “Energy OpKons for Reducing Budget Risk” • Date, key authors or points of contact 20 ©2011 Energy PathFINDER
- 21. ExecuKve Summary • Short and to the point, plain english! • Lead off with reference to current opportuniKes and business goals – How do recommended energy soluKons help? • Where does the business “hurt?” – Explain how energy choices address those hurts! • Recognize what’s already done well • It’s about the BUSINESS, not the ENERGY 21 ©2011 Energy PathFINDER
- 22. Outline of Each RecommendaKon • Brief descripKon • Net value created • Cost to implement • Cost of NOT implemenKng • Hurdles • Resources or changes needed • Outcome anKcipated: Cost savings? ProducKvity? Greater compliance? Rebates captured? 22 ©2011 Energy PathFINDER
- 23. Issues and OpportuniKes • Magnitude of value – Current waste sustained – New value to be created • Hurdles – Money, skills, authority to act • CriKcal success factors – What changes need to be made or resources secured? Training… rebates… shins of authority… – ConverKng hurdles into rewards? • Impact on business: savings equivalent to what revenue? What volume of producKon? 23 ©2011 Energy PathFINDER
- 24. • IMPLEMENTATION is the result of DECISIONS • DECISIONS are a funcKon of empowerment • EMPOWERMENT is a funcKon of: – Awareness – Capability – Accountability – MoKvaKon 24 RECOMMENDATIONS DECISIONS IMPLEMENTATION ©2011 Energy PathFINDER
- 29. THANK YOU! BLOG: hlp://energypathfinder.blogspot.com WEB: www.energypathfinder.com BOOK: “The Industrial Energy Harvest” BOOK: “North American Energy Audit Program Best PracOces” Energy PathFINDER Christopher Russell crussell@energypathfinder.com (443) 636-7746 29