Leadership & Change for Energy Efficiencyin Accounting & Management: Managementaccounting in a low-carbon economy         ...
Disclaimer> This presentation presents the views of the authors, and  not the views of UTS, or any other party.> This pres...
Referencing this material> This material has been developed by UTS Business  School as part of a project funded by the Off...
Interactive Seminar - Aim> Practical examples of how accountants can show  leadership to deliver business value in the tra...
Interactive seminar - outline> Background on our Energy Efficiency project> Energy efficiency business case proposals – cr...
About the project: Leadership & Changefor Energy Efficiency in Accounting &Management                                     ...
‘Leadership & Change for Energy Efficiency inAccounting & Management’ Project funding  > Office of Environment & Heritage ...
Key Project Partners> UTS Business School> Ernst & Young> Chartered Institute of Management Accountants  (CIMA)> Westpac> ...
ProjectOverview      Training Needs Analysis               Interactive seminars                  C-suite webinar       Eva...
Training Needs Analysis – Key Themes> Organisational response to energy efficiency needs  to be cross-disciplinary   – Acc...
Energy Efficiency – Criticalsuccess factors                                    THINK.CHANGE.DO               Patrick Critt...
What is Energy Efficiency? > Energy efficiency primarily refers to end-use   efficiency. > It involves delivering equal or...
Electricity generation by fuel type in AustraliaSource: GeoscienceAustralia 2010 p34
The boundary 100 units of                         The electricity energy input            supply chain        2 units of l...
62 units lost                                            2 units lostThe boundary 100 units of                          Th...
The boundary80% saving in energy   end use delivers  benefits across theelectricity supply chain
Key reasons for management accountants toget involved with energy efficiency>   Rising and fluctuating energy costs>   Car...
‘The Business Case and Beyond’ projectCompanies involved:                                               > Rio Tinto Iron O...
The question…  What do you do that helps get   support and resources for   energy efficiency projects?
1. Link your project to business priorities  > Piggyback on whatever is „hot‟ in the    business right now  > Solve an exi...
The GPT Group:530 Collins St Melbourne Upgrade
The GPT Group:530 Collins St Melbourne Upgrade (cont.)
The GPT Group:530 Collins St Melbourne Upgrade (cont.)
2. Involve the right people You can’t work in silos. Get the rightpeople with different expertise involved.  It is the onl...
Ron Finemore Transport:Modification of trailers on bulk tipper trucksBenefits:> The same amount of product is transported ...
3. Communicate with decision makers early   > Use existing communication forums such as     management meetings   > Use th...
4. Identify and manage project risks        Thinking about a project from a risk    perspective helps you reduce the chanc...
5. Consider all business costs and benefits  > Cost reduction         > Product quality  > Salvage value          > Greenh...
6. Identify funding options> R&D tax breaks> Government funding> Energy performance contracting> Internal energy funds
Six key strategies
Some unexpected answers This is what we do to influence our company culture, systems and processes to improve the success-...
1. Monitor, verify and promote success> Budget for monitoring & verification as part  of the the business case proposal> L...
2. Regularly brief management> Business drivers, risks and opportunities  change – keep managers informed> Communicate inf...
3. Adapt project approval processesConsider:> Combining smaller projects into one larger  project> Establishing an interna...
An important message…       Get the technical detail right      (engineering and accounting)                     AND      ...
Practical examples of how accountants canshow leadership to deliver business value inthe transition to a low carbon econom...
Practical examples of how accountants can show leadership todeliver business value in the transition to a low carbon econo...
Training Needs Analysis – Key Themes> Organisational response to energy efficiency needs  to be cross-disciplinary   – Acc...
Training Needs Analysis - Skills  Soft                  Energy Efficiency Fundamentals Skills          Developing the busi...
Energy Efficiency Fundamentals:Establish your energy base case> Not just the level of energy> It is the expected level of ...
Energy Efficiency Fundamentals:Establish your energy base case (cont.)> Estimation methods are similar to cost accounting:...
For example> A building in NT implemented a range of EE projectsTotal Annual Consumption for 04/05 in kWh:   1,605,138Tota...
Hints> Start simply, and do something:   – Find out what is happening in your     organisation   – Review electricity stat...
Some suggested places to start> Revisit your energy accounting system   – http://www.ret.gov.au/energy/efficiency/eeo/resm...
Hints> Organise data to match current  reporting systems   – e.g. batch vs process costing; KPIs> Let people know what you...
Hints (cont.)> Conduct an energy information audit:   – Ensures your organisation captures new     knowledge> Find champio...
Controlling performance using budgetsEnvironmental and social performance can be controlled using standard MA    technolog...
Developing an energy budget using multiple      regression       Example: Using multiple regression, Coles has identified ...
Example (cont’d)Coles wishes to assess the total electricity usage of store 2 using the followinginformation:Selling area ...
Source: Australian Government: Department of Resources, Energy and    Tourism, 2011, Energy Efficiency Opportunities: Repr...
Variance Analysis using dollars> Construct an energy budget model   – Probably with some engineering assistance> Apply wel...
Developing the business case for an energy efficiency project> Clear identification of the costs and benefit   – Translate...
Building the Business Case - BMACC> There are a number of problems with how some  organisations evaluate energy efficiency...
Information useful in preparing the businesscase> To assist in the identification of benefits, we have  provided a checkli...
What is wrong with payback and NPV?Project Scenario:                       A             B             C             D    ...
Mutually Exclusive Projects with Unequal           Lives           In many cases a choice will need to be made between pro...
Illustrative Example - EAC            Using two projects, Project A has a life of 2 years, and Project B with a life of 3 ...
Illustrative Example – EAC (cont’d)           Step 2          Convert the Net Present Value to an Equivalent Annual Cashfl...
BMACC> The Brown Marginal Abatement Cashflow Curve> Extends the MACCs, such as the McKinsey MACC, which we  have seen used...
BMACC (cont.)  better    160                                        Brown Marginal Abatement Cashflow Curve (BMACC)       ...
Where to find helpful information aboutenergy efficiency> NSW and Federal Governments provide training and  education mate...
Panel Discussion                   THINK.CHANGE.DO
Thank you> Thankyou for sharing your insights> Please complete the evaluation form. Consider:   – Are there any „energy ef...
Contact DetailsProfessor Suzanne BennProfessor of Sustainable EnterpriseUTS Business SchoolSuzanne.Benn@uts.edu.auPh +61 2...
References>   Bureau of Meteorology & CSIRO. 2010. "State of the Climate ".>   Cooremans, C, 2011, Make it strategic! Fina...
Developing the business case for an energyefficiency project > Reduced Cost                 > Reduced Risk > Improved     ...
Some sources of competitive advantage from EE: REDUCEDRISKS (from Worrell et al 2003 and Cooremans, 2011)    >   Reduced h...
Some sources of competitive advantage from EE: REDUCEDCOSTS (from Worrell et al 2003 and Cooremans, 2011) (cont.)    >   U...
Some sources of competitive advantage from EE: REDUCEDCOSTS (from Worrell et al 2003 and Cooremans, 2011) (cont.)    >   D...
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UTS Energy Efficiency CPA CSR Discussion Group Presentation 24 February 2012

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  • EEP Selling area - http://www.pc.gov.au/__data/assets/pdf_file/0011/108866/09-planning-appendixh.pdf
  • EEP Selling area - http://www.pc.gov.au/__data/assets/pdf_file/0011/108866/09-planning-appendixh.pdf
  • UTS Energy Efficiency CPA CSR Discussion Group Presentation 24 February 2012

    1. 1. Leadership & Change for Energy Efficiencyin Accounting & Management: Managementaccounting in a low-carbon economy THINK.CHANGE.DOCPA Australia NSW Branch CSR Discussion Group Presentation 24 February 2012
    2. 2. Disclaimer> This presentation presents the views of the authors, and not the views of UTS, or any other party.> This presentation is for educational purposes only and does not contain specific or general advice.> Please seek appropriate advice before making any financial decisions.> Reference list is provided at the end of the presentation
    3. 3. Referencing this material> This material has been developed by UTS Business School as part of a project funded by the Office of Environment & Heritage NSW under the Energy Efficiency Training Program.> If using this material please acknowledge as follows: – Benn, S., Brown, D., Brown, P., Crittenden, P., and Krithinakis, A., 2012. Leadership & Change for Energy Efficiency in Accounting & Management, CPA Australia NSW Branch CSR Discussion Group presentation. 24 February 2012. The project is funded by the Office of Environment & Heritage, Department of Premier and Cabinet, NSW.
    4. 4. Interactive Seminar - Aim> Practical examples of how accountants can show leadership to deliver business value in the transition to a low carbon economy> Highlight the role that you can play in managing risk and delivering opportunities through energy efficiency> Encourage you to get more involved with energy efficiency in your organisation!
    5. 5. Interactive seminar - outline> Background on our Energy Efficiency project> Energy efficiency business case proposals – critical success factors> Practical examples of how accountants can show leadership to deliver business value in the transition to a low carbon economy> Improving the effectiveness of Marginal Abatement Cost Curves> Panel session
    6. 6. About the project: Leadership & Changefor Energy Efficiency in Accounting &Management THINK.CHANGE.DO
    7. 7. ‘Leadership & Change for Energy Efficiency inAccounting & Management’ Project funding > Office of Environment & Heritage NSW funding > The „Energy Efficiency Training Program‟ aims to supports the development and delivery of higher education courses that enhance energy efficiency knowledge and practice. > All project materials will be made available
    8. 8. Key Project Partners> UTS Business School> Ernst & Young> Chartered Institute of Management Accountants (CIMA)> Westpac> TAFE NSW, Sydney Institute
    9. 9. ProjectOverview Training Needs Analysis Interactive seminars C-suite webinar Evaluation Teaching cases Modular 2-day course Integrated university offerings
    10. 10. Training Needs Analysis – Key Themes> Organisational response to energy efficiency needs to be cross-disciplinary – Accountant as business partner> Soft skills as well as analytical/ technical skills are important – Communication – Influencing others – Partnering – Change management – Team building – Problem solving
    11. 11. Energy Efficiency – Criticalsuccess factors THINK.CHANGE.DO Patrick Crittenden Sustainable Business Pty Ltd
    12. 12. What is Energy Efficiency? > Energy efficiency primarily refers to end-use efficiency. > It involves delivering equal or greater levels of “energy services” with less energy supply. > Energy services include cooling, heating, lighting, driving motors, operating equipment and appliances.Dunstan et al. 2011, p.10
    13. 13. Electricity generation by fuel type in AustraliaSource: GeoscienceAustralia 2010 p34
    14. 14. The boundary 100 units of The electricity energy input supply chain 2 units of light energy delivered
    15. 15. 62 units lost 2 units lostThe boundary 100 units of The electricity energy input supply chain 34 units lost 2 units of light energy delivered
    16. 16. The boundary80% saving in energy end use delivers benefits across theelectricity supply chain
    17. 17. Key reasons for management accountants toget involved with energy efficiency> Rising and fluctuating energy costs> Carbon pricing> Compliance with legislation> Licence to operate> Your competitors are doing it> Ethical considerations
    18. 18. ‘The Business Case and Beyond’ projectCompanies involved: > Rio Tinto Iron Ore> Australia Post > Ron Finemore> Centennial Coal Co. Transport> Downer EDI Mining> Foster‟s Group > Simplot Australia> Linfox > Spotless Group> National Australia Bank > Sydney Water> New Hope Corporation > The GPT Group> Newmont Asia Pacific > WoolworthsNote: These slides on the „The Business Case and Beyond‟ project have been adapted from apresentation first developed by Patrick Crittenden for the Energy Efficiency OpportunitiesWorkshops in September 2011.Case studies and other material on the „The Business Case and Beyond‟ project are availableat www.eex.gov.au.
    19. 19. The question… What do you do that helps get support and resources for energy efficiency projects?
    20. 20. 1. Link your project to business priorities > Piggyback on whatever is „hot‟ in the business right now > Solve an existing problem through your „energy efficiency project‟ > Use compliance requirements to drive change
    21. 21. The GPT Group:530 Collins St Melbourne Upgrade
    22. 22. The GPT Group:530 Collins St Melbourne Upgrade (cont.)
    23. 23. The GPT Group:530 Collins St Melbourne Upgrade (cont.)
    24. 24. 2. Involve the right people You can’t work in silos. Get the rightpeople with different expertise involved. It is the only way to build a credible business case for a project .
    25. 25. Ron Finemore Transport:Modification of trailers on bulk tipper trucksBenefits:> The same amount of product is transported with 74 fewer truck trips/annum, resulting in 72,000 avoided truck kilometres travelled> 38,000 litres of fuel saved per annum> Shared financial benefits for the customer and Ron Finemore Transport> Reduction in greenhouse gas emissions of 103 tonnes CO2e-/per annum> Benefits to the community through fewer truck movements.
    26. 26. 3. Communicate with decision makers early > Use existing communication forums such as management meetings > Use the right „business speak‟ > Use clear and focused messages and questions
    27. 27. 4. Identify and manage project risks Thinking about a project from a risk perspective helps you reduce the chance of unforeseen things happening…it demonstrates that you have thoroughly thought the project through
    28. 28. 5. Consider all business costs and benefits > Cost reduction > Product quality > Salvage value > Greenhouse > Maintenance gas reductions benefits > OH&S > Deferred CAPEX > Corporate > Productivity reputation
    29. 29. 6. Identify funding options> R&D tax breaks> Government funding> Energy performance contracting> Internal energy funds
    30. 30. Six key strategies
    31. 31. Some unexpected answers This is what we do to influence our company culture, systems and processes to improve the success- rate of future projects…
    32. 32. 1. Monitor, verify and promote success> Budget for monitoring & verification as part of the the business case proposal> Leave room to deliver more than you promise> Make sure the right people know what has been achieved and keep it on record
    33. 33. 2. Regularly brief management> Business drivers, risks and opportunities change – keep managers informed> Communicate information about what your competitors are doing (or not!)> Use relevant graphs and statistics – for example, how well you are tracking towards targets
    34. 34. 3. Adapt project approval processesConsider:> Combining smaller projects into one larger project> Establishing an internal fund for energy efficiency projects> Adding questions on energy impacts to capital expenditure approval processes
    35. 35. An important message… Get the technical detail right (engineering and accounting) AND Develop strategies to “win friends and influence people” (getting support and resources for anything is a political process!)
    36. 36. Practical examples of how accountants canshow leadership to deliver business value inthe transition to a low carbon economy THINK.CHANGE.DO Dr. Paul J Brown UTS Business School
    37. 37. Practical examples of how accountants can show leadership todeliver business value in the transition to a low carbon economy > Outcome of our Training Needs Analysis > Establishing your base case > Applying the control cycle to Energy Efficiency – Energy budgeting and control > Building the Business Case – Brown Marginal Abatement Cashflow Curve
    38. 38. Training Needs Analysis – Key Themes> Organisational response to energy efficiency needs to be cross-disciplinary – Accountant as business partner> Soft skills as well as analytical/ technical skills are important – Communication – Influencing others – Partnering – Change management – Team building – Problem solving
    39. 39. Training Needs Analysis - Skills Soft Energy Efficiency Fundamentals Skills Developing the business case for an Energy Efficiency project Extending accounting tools to an Energy Efficiency context Modifying information systems to support Energy Efficiency Budgeting & Finance
    40. 40. Energy Efficiency Fundamentals:Establish your energy base case> Not just the level of energy> It is the expected level of energy, for an expected level of activity> Expected Energy = Fixed energy + Variable Energy * Activity> How is this different from estimating „pre-determined overhead rates‟? – Units are different ($ and kilowatt-hours or Giga Joules) – Energy complies with the laws of thermodynamics (unlike people)
    41. 41. Energy Efficiency Fundamentals:Establish your energy base case (cont.)> Estimation methods are similar to cost accounting: – Regression Analysis – Modelling / simulation (like input /output analysis) – Short term metering – Long term metering (important for energy management)> Engineering models and equipment are used, so work with a specialist – e.g. consider the effect of weather on demand for energy
    42. 42. For example> A building in NT implemented a range of EE projectsTotal Annual Consumption for 04/05 in kWh: 1,605,138Total Annual Consumption for 05/06 in kWh: 1,597,135Naive Energy Saving in kWh: 8,003> Linear regression was used to control for differences in weather (the base year had a cool summer)Total Annual Consumption for 04/05 in kWh: 1,775,546Total Annual Consumption for 05/06 in kWh: 1,597,135Energy Saving in kWh: 178,411Difference is a 10% saving vs a 0.5% saving in energy
    43. 43. Hints> Start simply, and do something: – Find out what is happening in your organisation – Review electricity statements for different facilities – Review energy supply contracts
    44. 44. Some suggested places to start> Revisit your energy accounting system – http://www.ret.gov.au/energy/efficiency/eeo/resmaterial/esmg/Pages/default.a spx> Set up a register and systems to identify and manage energy efficiency opportunities – http://www.ret.gov.au/energy/efficiency/eeo/resmaterial/csm/Pages/default.as px> Obtain subsidised energy audits (for some NSW firms) – http://www.environment.nsw.gov.au/sustainbus/energyauditing.htm> Visit our website – http://www.business.uts.edu.au/energyefficiency
    45. 45. Hints> Organise data to match current reporting systems – e.g. batch vs process costing; KPIs> Let people know what you are doing and make data transparent
    46. 46. Hints (cont.)> Conduct an energy information audit: – Ensures your organisation captures new knowledge> Find champions in each major facility and department and let them loose with some decision making rights
    47. 47. Controlling performance using budgetsEnvironmental and social performance can be controlled using standard MA technology such as budgets, in the same way as economic performance is controlledProject evaluation budget: Economic, social and environmental impacts of possible projects are identified and considered during project evaluation. This involves doing a forecast and budget, and consideration of the strategic value of each project.Formal budget: Once projects have been selected, a formal budget is prepared, this includes who is responsible for which tasks.Project enacted: The project is enacted, and data is collected to allow management to track progressVariance analysis: At intervals (monthly, quarterly, yearly), the budget is compared to actual results using variance analysis. Variances are investigated and action taken to enhance performance.
    48. 48. Developing an energy budget using multiple regression Example: Using multiple regression, Coles has identified that total energy usage is distributed between three main activities with the following activity drivers: Kwh per Activity Activity Activity Driver 52,121 Fixed Usage - 558 Lighting Selling area (m2) 852 Refrigeration Volume Cool with no doors(m2) 922 Refrigeration Volume Frozen with doors (m2) 719,103 Air conditioning No entrance air lock Therefore, the multiple regression model is: Total Electricity Usage (kwh) = 52,121 + 558 x Selling area (m2) + 852 x Cool with no doors (m2) + 922 x Frozen with doors (m2) + 719,103 x No entrance air lockExample based on: Department of Resources, Energy and Tourism (RET). 2010. Energy EfficiencyOpportunities: Representative Assessment Guide.
    49. 49. Example (cont’d)Coles wishes to assess the total electricity usage of store 2 using the followinginformation:Selling area (m2) = 3500Cool with no doors (m2) = 650Frozen with doors (m2) = 340No entrance air lock = False (0)Calculate the total electricity usage for the Coles Gisborne branch.Total Electricity Usage (kwh) = 52,121 + 558 x 3500 + 852 x 510 + 922 x 310 + 719,103 x 0 = 2,872,401 kwhTherefore, if energy costs were expected to be 20c per kwh for the next year, the budget for store 2 would be: $545,092 (2,725,461*0.2)
    50. 50. Source: Australian Government: Department of Resources, Energy and Tourism, 2011, Energy Efficiency Opportunities: Representative Assessment Guide
    51. 51. Variance Analysis using dollars> Construct an energy budget model – Probably with some engineering assistance> Apply well known variance analysis formulaeEnergy Price Variance = Actual kwh*(Actual Price – Standard Price)Energy Variance = Standard Price*( Actual kwh – Budgeted kwh)> Standard price is your budgeted price
    52. 52. Developing the business case for an energy efficiency project> Clear identification of the costs and benefit – Translated into NPV, IRR, Payback, EAC etc – Opportunity cost> Identifying direct costs and cost savings may rely on engineering analysis, as well as cost analysis – e.g. a process change effect on your base case and on demand for labour> All costs and benefits should be included – Information value, strategic value
    53. 53. Building the Business Case - BMACC> There are a number of problems with how some organisations evaluate energy efficiency projects – Exclusion of relevant cost and benefits • Lack of education • Difficulty in assessing – Not making the link between the project and the firm‟s strategy – Risk of project is not assessed/ presented well • Using firm level hurdle rates (rather than risk adjusted) • Consider best vs. worst case – Using payback period as a key decision tool
    54. 54. Information useful in preparing the businesscase> To assist in the identification of benefits, we have provided a checklist: – the six key drivers of energy efficiency discussed earlier in the presentation – a list of benefits identified in reviews of the literature (Worrell et al 2003; Cooremans, 2011) • See additional slides at end of presentation
    55. 55. What is wrong with payback and NPV?Project Scenario: A B C D EInitial Investment $ 100,000 $ 100,000 $ 100,000 $ 100,000 $ 100,000Life of project (years) 10 10 15 15 15First year cash profit $ 25,000 $ 25,000 $ 25,000 $ 17,500 $ 17,500Yearly growth rate for cash profit 0% 0% 0% 5.0% 5.0%Hurdle Rate 15% 8% 15% 15% 8%Payback Period (years) 4.00 4.00 4.00 5.20 5.20Net Present value (NPV) $ 25,469 $ 67,752 $ 46,184 $ 30,289 $ 101,037Equivalent Annual Cashflow(EAC) $ 5,075 $ 10,097 $ 7,898 $ 5,180 $ 11,804
    56. 56. Mutually Exclusive Projects with Unequal Lives In many cases a choice will need to be made between projects that have differing lives. The Equivalent Annual Cashflow method (EAC) Equivalent annual cashflow (EAC) is the calculation of an annuity value having the same term, rate of return and net present value as the project that it represents. To determine the Equivalent Annual Cashflow (EAC) of a project: 1. Calculate the NPV of the project‟s cashflows. 2. Divide the NPV by the annuity factor relating to the time in years and the relevant Discount Factor to determine an annual cashflow figure. That is, the EAC of a project is calculated by dividing the NPV of the project by the annuity factor, relevant to the project life and the company‟s cost of capital (refer to the calculation of the „PMT‟, i.e. Payment, function using Excel).Source: Pazmandy, G. and Brown, P. J. (Ed), 2008, Readings in Business Analysis, 2nd Edition, McGraw Hill Custom Publishing.
    57. 57. Illustrative Example - EAC Using two projects, Project A has a life of 2 years, and Project B with a life of 3 years. The company‟s cost of capital is 10%. Cash flows are as follows: Project A Project B Initial Cost -$4,800 -$8,200 Annual After Tax Cash Inflows: Year 1 +$3,000 +$3,500 Year 2 +$3,000 +$3,500 Year 3 +$0 +$3,500 Cost of Capital 10% Solution to Illustrative Example - EAC: To select the most profitable project, they will need to be transformed to a uniform time period to enable the comparison to be effected. Step 1 Calculate the Net Present Value of the Project Project A Project B Project Net Present Value = +$406.61 +$503.98 The above NPVs are not comparable as Project A is for 2 years, whereas Project B has a 3 year life. To enable the comparison, the NPV has to be converted to an Equivalent ANNUAL amount.Source: Pazmandy, G. and Brown, P. J. (Ed), 2008, Readings in Business Analysis, 2nd Edition, McGraw Hill Custom Publishing.
    58. 58. Illustrative Example – EAC (cont’d) Step 2 Convert the Net Present Value to an Equivalent Annual Cashflow amount using the PMT (Payment) function in Excel or the formula • Equivalent Annual Cashflow = NPV/ Annuity PV Factor • Project A has a useful life of 2 years – The Annuity PV factor for 2 years is 1.7355 – Therefore: 406.61 / 1.7355 = 234.29 • Project B has a useful life of 3 years. – The Annuity PV factor for 3 years is 2.4869 – Therefore: 503.98 / 2.4869 = 202.66 Project A Project B Equivalent Annual Cashflow = $234.29 $202.66 Using the equivalent annual cashflow method Project A has the higher positive EAC and would be accepted in preference to Project B. Note that this is consistent with the decision made using the lowest common multiple time period method.Source: Pazmandy, G. and Brown, P. J. (Ed), 2008, Readings in Business Analysis, 2nd Edition, McGraw Hill Custom Publishing.
    59. 59. BMACC> The Brown Marginal Abatement Cashflow Curve> Extends the MACCs, such as the McKinsey MACC, which we have seen used in practice> Different (better) to other MACCs: – Uses Equivalent Annual Cashflow, not NPV or payback – Includes a risk distribution – Includes unique colour coding scheme – Includes other information> Pending Creative Commons licence
    60. 60. BMACC (cont.) better 160 Brown Marginal Abatement Cashflow Curve (BMACC) 140Equivalent Annual Cashflow* or Project F Strong Strategic alignment 120 Medium Strategic alignment 100 Weak Strategic alignment 80 60 40 or Project A 20 2 yr life 3 yr life 4 yr life 5 yr life 6 yr life 7 yr life 1 yr life 0 Project A Project B Project C Project D Project E Project F Project G -20 -40 -60 worse GHG Emissions Abatement (per year)# Source: Brown, P. J., Brown Marginal Abatement Cashflow Curve (BMACC), UTS Business School, URL: http://www.business.uts.edu.au/energyefficiency/project-material.html
    61. 61. Where to find helpful information aboutenergy efficiency> NSW and Federal Governments provide training and education materials. – For example, see: www.environment.nsw.gov.au www.energyefficiencyopportunities.gov.au
    62. 62. Panel Discussion THINK.CHANGE.DO
    63. 63. Thank you> Thankyou for sharing your insights> Please complete the evaluation form. Consider: – Are there any „energy efficiency‟ related actions you plan to take following this seminar? – Can we follow up with you next year as part of our evaluation?> Please discuss with us any further ideas you have about the project
    64. 64. Contact DetailsProfessor Suzanne BennProfessor of Sustainable EnterpriseUTS Business SchoolSuzanne.Benn@uts.edu.auPh +61 2 9514 3621For further information and updates on the Leadership &Change for Energy Efficiency in Accounting &Management project go to:http://www.business.uts.edu.au/energyefficiency
    65. 65. References> Bureau of Meteorology & CSIRO. 2010. "State of the Climate ".> Cooremans, C, 2011, Make it strategic! Financial investment logic is not enough, Energy Efficiency.> Dunstan, Chris, Katie Ross, and Nicole Ghiotto. 2011. "Barriers to Demand Management: A Survey of Stakeholder Perceptions." Prepared for the Australian Alliance to Save Energy by the Institute for Sustainable Futures, University of Technology, Sydney.> Geoscience Australia. 2010. "Australian Energy Resource Assessment." Commonwealth of Australia.> International Energy Agency. 2011. "World Energy Outlook ”.> Linfox Energy Efficiency Opportunities Public Report 2010. Accessed from www.linfox.com/~/media/Documents/PDF/Linfox_EEO%20Act%20PR%202010%20Appendix%20small.ashx> Pazmandy, G. and Brown, P. J. (Ed), 2008, Readings in Business Analysis, 2nd Edition, McGraw Hill Custom Publishing.> Porter, M. E., 1985, Competitive advantage. New York: Free.> Department of Resources, Energy and Tourism (RET). 2011. "Continuing opportunities. Energy Efficiency Opportunities program - 2010 report. A look at results for the EEO program 2006 - 2010." Australian Government Department of Resources, Energy & Tourism (RET).> Department of Resources, Energy and Tourism (RET). 2008. Energy Savings Measurement Guide.> Sustainability Victoria. 2010. "Energy Efficiency Best Practice Guide Lighting.”> The GPT Group Sustainability Report. Accessed 6/9/11 www.gpt.com.au/content.aspx?urlkey=Energy> Total Environment Centre. 2010. "Demand management and energy policy development: A case study of New South Wales.”> World Business Council for Sustainable Development (WBCSD). 2004. "Facts and trends to 2050.”> World Business Council for Sustainable Development (WBCSD). 2009. “Transforming the Market: Energy Efficiency in Buildings.”> World Economic Forum. 2010. "Energy Vision Update 2010. Towards a more energy efficiency world.".> Worrell, E., Laitner, J., Ruth, M., & Finman, H., 2003, Productivity benefits of industrial energy efficiency measures, Energy, 28(11), 1081–1098.
    66. 66. Developing the business case for an energyefficiency project > Reduced Cost > Reduced Risk > Improved > Greenhouse gas temperature control > Increased reliability reductions in production > Improved reputation > Improved product > Safety quality Include all business costs and benefits to increase the chance of success
    67. 67. Some sources of competitive advantage from EE: REDUCEDRISKS (from Worrell et al 2003 and Cooremans, 2011) > Reduced hazardous waste > Reduced dust emissions > Reduced CO, CO2, NOx, SOx emissions > Increased facility reliability > Reduced wear and tear on equipment/ machinery > Decreased liability > Legal risks > Carbon and energy price risks > Disruption of energy supply > Commercial risk
    68. 68. Some sources of competitive advantage from EE: REDUCEDCOSTS (from Worrell et al 2003 and Cooremans, 2011) (cont.) > Use of waste fuels > Reduced product waste > Reduced waste water > Materials reduction > Increased product yield > Improved equipment performance > Shorter process cycle time > Reduced dust emissions > Reduced CO, CO2, NOx, SOx emissions > Reduced wear and tear on equipment/ machinery
    69. 69. Some sources of competitive advantage from EE: REDUCEDCOSTS (from Worrell et al 2003 and Cooremans, 2011) (cont.) > Decreased liability > Reduced need for personal protective equipment > Improved lighting > Reduced turnover, absenteeism and health costs (improved worker morale, reduced noise, improved air quality and temperature control) > Reduced needs for engineering controls > Lowered cooling requirements > Reductions for labor requirements > Delaying or reducing capital expenditures > Additional space

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