This is an overview of how to address some of the barriers in the boardroom towards implementing energy efficiency

1. From Plant Room to Boardroom
Winning the argument for energy efficiency
investments
Andre Burgess, Partner EMVC Solutions
June 20th 2014, Energy and Environment Expo 2014

2. About us
• EMVC Solutions is an energy advisory business, delivering
solutions in distributed, low carbon energy generation and
energy efficiency services, including smart energy control and
monitoring services.
• As a business we believe in putting the power and the value
back into the hands of businesses and communities when it
comes to how they source their energy and manage their
consumption.

3. 384 392 km
In one year, we use 31 billion barrels of oil
- stacked on each other is 60 times longer than the distance to the moon…..

4. ... if everyone on earth lived as North Americans…
…we need to change how we consume things……
…all together, we consume almost 50
percent more of the earth's renewable
resources than the earth can recover in one
year.…
…all the natural resources that we
use are also part of the planet…

5. The Fifth Fuel?
• An estimated £0.5bn (21%) of the UK’s energy spend is being
wasted.
• Energy prices are expected to continue to rise and good Energy
Management is essential for business survival.
• With estimates of GDP growth resulting from energy efficiency
converging on around 1%, energy efficiency should be considered
as part of mainstream economic policy rather than an energy issue
only
• Even with our ‘advanced’ technologies we have an overall efficiency
of 11%. (Cambridge University, 2005)
• We can never achieve 100% but….improving that performance
would bring great benefits in terms of cost reduction, improved
energy security, reduced emissions and job creation

6. The
Challenge of
selling Energy
Efficiency
The Rebound Effect: claims
that key energy savings
benefits are often not
realised, because improved
efficiency gains are
undermined and
counter‐balanced by
increased consumption and
expenditures.
The Cost and the Challenge:
The failure to properly
evaluate the benefits of
energy efficiency likely results
in underinvestment in energy
efficiency.
Focus on Creating Value:
CEOs don’t generally get to
the top by cost-cutting but by
creating strategic shareholder
value. Something inherently
dull about saving money,
however worthy it is, and
something inherently exciting
about creating value.

7. Selling Multiple Benefits
• Winning the argument in the boardroom involves
moving from a cost-cutting approach (single benefit),
to a strategic value creation approach of energy
efficiency investments (i.e. multiple benefits or “co-
benefits” or “non-energy benefits”)
• Co-benefits include:
– increased production capacity
– increased productivity
– increased quality
– reduced maintenance costs
– reduced waste disposal costs
– increased employee engagement and satisfaction.

8. Creating a complete financial picture
0
500
1000
1500
2000
2500
3000
3500
Year 1 Benefits
Aggregate Benefits (US$ 000’s)
Direct Energy Savings
Utility rebate
Maintenance Savings
Productivity and Safety Gains
Electricity Increase Hedge
Illustrative Example - $4.5 million investment for lighting retrofits in multiple installations
Indirect
benefits
Operational
Savings
Direct
Savings Aggregate
benefits
measured
over time
results in
improved NPV

9. CSR
• Beyond the cost focus, it’s increasingly important for
company leaders to ensure that corporate
investments, as a whole, contribute to broader goals.
• CEOs say their major motivating factors for taking
action on sustainability issues, including
environmental issues, are part of a broader strategy
for strengthening brand, trust, and reputation.

10. External Incentives
• As much as 10% of the total benefits
flowing from energy efficiency measures
are likely to accrue directly to energy
providers
• Increased energy sales require increased
capacity, and the cost of installing new
capacity and transmission capability is
almost always more expensive than
energy efficiency measures.
• Slowing demand growth generally
provides net benefits to energy providers.
• Utility incentives as well as participation
in Capacity Markets

11. Deep Retrofits – the Value Elements
Enterprise costs
- health costs
- employee costs
- promotions and marketing costs
Property costs and risks
- retrofit development costs
- non-energy property operating costs - savings create value directly for the
property owner by increasing net operating income, which is capitalized to
create property value, which in turn increases company value (multiple of
earnings).
- retrofit risk mitigation (underperforms its forecasts, creates legal and insurance
problems, frustrates employees/tenants and facility managers, reduces space
flexibility/adaptability, and faces current and future regulatory problems.)
Enterprise revenues
- customer access and sales
- property derived revenues (Increased subleasing, property sales, and other
revenues directly translate to value by increasing enterprise revenues)
Deep energy
retrofits offer
bottom-line
benefits for
business
beyond energy
cost savings
alone.
Rocky Mountain institute

12. Energy Efficiency: Benefits at Individual,
Sector, National and International level
IEA

13. The Value of Data
• Energy Management Programmes
• Demand Management
– lowering base load
– reducing peak consumption
– making smaller businesses able to participate in Demand
response programmes
• Sustainable supply chain management
• Identifying wasteful equipment and processes
• Reduced supplier costs
• Required for government incentives?

14. Thank You
Andre Burgess
Partner, EMVC Solutions
E-Mail: andre@emvcsolutions.com
Web: www.emvcsolutions.com