Energy Efficiency Risks and Opportunities for Your Business and Your Career

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Energy Efficiency Risks and Opportunities for Your Business and Your Career

  1. 1. ENERGY EFFICIENCY: Risks and Opportunities for Your Business and Your Career Christopher Russell, Principal Energy PathFINDER .com (443) 636-7746
  2. 2. Or… If energy efficiency were a rock, would you prefer to roll it UPHILL or DOWNHILL? 2©2013 Energy PathFINDER.com
  3. 3. About Christopher Russell, C.E.M., C.R.M.  Independent consulting since 2006 Principal, Energy Pathfinder  Visiting Fellow, American Council for an Energy Efficient Economy, 2012+  Energy Manager, Howard County, MD, 2010- 2012  Director of Industrial Programs, Alliance to Save Energy, 1999-2006  Comm. & Indus. Program Manager, American Gas Association, 1995-1999  MBA, M.A., University of MD; B.A., McGill University 3©2013 Energy PathFINDER.com About Christopher Russell
  4. 4. TODAY’S PURPOSE: Reveal the RATIONALE STRATEGY ORGANIZATION COMMUNICATION & PHILOSOPHY …of industrial energy management as it applies to career and business development 4©2013 Energy PathFINDER.com
  5. 5. ENERGY IS ALWAYS IN MOTION. Energy that doesn’t create wealth destroys it. WEALTH DESTROYED HEAT, FRICTION, & CHEMICAL REACTIONS DESTROY PLANT & EQUIPMENT, CREATE LIABILITIES WEALTH CREATED TRANSFORMATION OF INPUTS INTO FINAL PRODUCTSHEAT, PRESSURE, & MOTIVE POWER FUGITIVE ENERGY COMMITTED ENERGY FUEL & ELECTRICITY Technical Rationale for Energy Management 5©2011 Energy PathFINDER.com
  6. 6. EXPENSES, INTEREST, OR INFLATION CAPITAL IS ALWAYS IN MOTION ECONOMY (opportunity) PLACE OF LOW RETURNS PLACE OF HIGH RETURNS CAPITAL IS NEVER AT REST 6©2013 Energy PathFINDER.com
  7. 7. THE INDUSTRIAL FACILITY IS A MICRO ECONOMY FACILITY (opportunity) WEALTH INPUTS WEALTH CREATED EXPENSES, INTEREST, OR INFLATION Who will get superior returns from your facility assets? YOUR BUSINESS or the UTILITY COMPANY? 7©2013 Energy PathFINDER.com
  8. 8. (c)2009 Energy Pathfinder Mangement Consulting, LLC www.energypathfinder.com 8 MONEYMONEY FUEL & ELECTRICITY HEAT, PRESSURE & MOTIVE POWER PRODUCTS TO SELL BUSINESS RATIONALE FOR ENERGY MANAGEMENT WE TRACK MONEY. WHY NOT ENERGY? 8©2011 Energy PathFINDER.com
  9. 9. STRATEGY UP HILL: Proclaim “reduced utility bills” as your purpose. DOWN HILL: Proclaim a vision for supporting core business goals through strategic energy management. 9©2013 Energy PathFINDER.com
  10. 10. STRATEGY UP HILL: Approach energy management as a project. DOWN HILL: Approach energy solutions as an investment. 10©2013 Energy PathFINDER.com
  11. 11. STRATEGY UP HILL: Use an ENERGY AUDIT to determine a list of projects. DOWN HILL: Develop BUSINESS PLAN that provides a roadmap to business results. 11©2013 Energy PathFINDER.com
  12. 12. STRATEGY UP HILL: Evaluate proposed efforts for their cost to do. DOWN HILL: Evaluate proposals… • for impact on overall invested capital performance • in comparison to the cost of doing nothing 12©2013 Energy PathFINDER.com
  13. 13. PURSUING ECONOMIC OPPORTUNITY 1. Benchmark current capital performance 2. Perceive opportunities for superior performance 3. Estimate investment risk/return 4. Reinvest capital 5. Continuous improvement. See Step 1. For the ECONOMY… For the FACILITY… DYNAMICS ARE THE SAME 13©2013 Energy PathFINDER.com
  14. 14. ORGANIZATION UP HILL: Delegate all energy matters to a single department (silo). DOWN HILL: Organize leadership and skills in cross- departmental teams. 14©2013 Energy PathFINDER.com
  15. 15. ORGANIZATION UP HILL: Allocate budget, skills, and time commensurate with energy’s proportion to total expenses. DOWN HILL: Fund efficiency efforts proportionately to the magnitude and speed of cash flow that it creates. 15©2013 Energy PathFINDER.com
  16. 16. COMMUNICATIONS UP HILL: Assume everyone already knows what you’re talking about. DOWN HILL: Manage expectations through education. 16©2013 Energy PathFINDER.com
  17. 17. ENERGY COST CONTROL What Your Business Leaders Should Know • PRICE MANAGEMENT & PROCUREMENT • BEHAVIOR – Education & awareness – Make good choices with current assets • O&M PROCEDURAL – Optimize current assets – Leak & loss repair, PM routines • CAPITAL EXPENDITURE – Replace & upgrade – Invest in new technology ©2013 Energy PathFINDER.com 17
  18. 18. 1-2 YEARS 2-5 YEARS 5+ YEARS PRICE/PROCUREMENT AWARENESS & BEHAVIOR O&M/PROCEDURAL CAPITAL INVESTMENT SAVINGS POTENTIAL OVER TIME* *Author’s Summary of Industry Knowledge 18©2013 Energy PathFINDER.com
  19. 19. COMMUNICATIONS UP HILL: Address mechanical performance. Explain everything in techno- speak. Describe results as energy saved. DOWN HILL: Address capital performance. Articulate outcomes and rewards as they accrue to the agendas of other departments. 19©2013 Energy PathFINDER.com
  20. 20. Ask not how much energy management shall take from current resources. 20©2013 Energy PathFINDER.com Ask how much (and at what rate) energy management shall create new wealth.
  21. 21. COMMUNICATIONS UP HILL: Execute without informing, persuading or collaborating. DOWN HILL: Declare amnesty for past practices; seek, encourage, and reward compliance. 21©2013 Energy PathFINDER.com
  22. 22. COMMUNICATIONS UP HILL: Perceive energy management as a distraction from standard operating procedures DOWN HILL: Fold energy performance criteria into existing business metrics and accountabilities 22©2013 Energy PathFINDER.com
  23. 23. COMMUNICATIONS UP HILL: Use simple payback. Results describe HOW LONG it takes for a budget to replenish itself. DOWN HILL: Use rates of return. Describe the RATE and MAGNITUDE of capital: (1) Created via your agenda , or (2) Destroyed through inaction 23©2013 Energy PathFINDER.com
  24. 24. You should not have to defend superior rates and magnitudes of investment returns. 24©2013 Energy PathFINDER.com Detractors need to defend the rate and magnitude of capital destruction caused by DOING NOTHING. DEFENDING ENERGY MANAGEMENT?
  25. 25. PHILOSOPHY UP HILL: Confuse energy efficiency with environmentalism. DOWN HILL: Perceive energy improvements as business opportunities. 25©2013 Energy PathFINDER.com
  26. 26. PHILOSOPHY UP HILL: Perceive energy management as a cost center. Facility assets are a cost to be minimized.. Success = no unusual expenses; don’t get noticed. DOWN HILL: Energy management = profit center. Success = creating cash, improving return on invested capital, get noticed for supporting other departmental agendas 26©2013 Energy PathFINDER.com
  27. 27. “Yeah, but…” UP HILL: Keep pushing the same buttons… and keep getting the same results. DOWN HILL: Apply some of the ideas from this presentation. 27©2013 Energy PathFINDER.com
  28. 28. YOUR FACILITY… CAN BE AN ATM MACHINE. 28©2013 Energy PathFINDER.com
  29. 29. CONCLUSIONS • Demystify • Don’t save… CREATE! • Monetize • Collaborate • Document and celebrate 29©2013 Energy PathFINDER.com
  30. 30. YOU-TUBE: search “Energy Pathfinder Investment Calculator” Energy PathFINDER .com Christopher Russell @ENERGYpathfndr Feb 2008 June 2010 THANK YOU!

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