The Rise of the Corporate Energy Manager / Take Greenbiz/Groom Energy CEM survey

 More companies are establishing corporate-wide programs for coordinated energy reduction and improved capital allocation. The execution of these programs is often by lead by a Corporate Energy Manager along with his or her direct and extended team. This role requires new skills and Key Performance Indicators (KPIs). Look for more companies to staff this position in upcoming years.

Corporate energy management programs are increasing.   Despite flat energy prices, companies continue to see opportunities that energy efficiency affords for margin expansion while meeting manufacturing production or occupancy comfort goals. Improved energy efficiency is also needed to meet publicly stated carbon or energy reduction goals and to demonstrate top customers the commitment to operational efficiency. 3M, Alcoa, Applied Materials, AT&T, Best Buy, Briggs and Stratton, Cinemark, Eastman Chemical Company, General Electric, Genzyme, Niemen Marcus, Millipore, Pfizer, Staples and hundreds of others have established corporate energy management programs lead by a Corporate Energy Manager.

These companies are realizing 5-20% energy savings through coordinated capital allocation for retrofits, no or low cost operational changes, utility incentives, shared best practices, and shared corporate services.

While some specific job responsibility differs, for the most part these positions are responsible for shepherding increased energy efficiency company-wide, across all sites and plants and ensuring alignment between company goals and local execution.

Most corporate energy management program are in their infancy as companies establish an understanding of their total energy spend across facilities, identify top energy consuming assets, leverage any energy procurement and demand response opportunities, develop software tools for monitoring energy costs and ensure energy accountability with senior management, line managers, and facility managers.

An energy management program and role require new skills. Organizations are traditionally staffed to optimize manufacturing production ("don't slow down the line") or occupancy comfort ("keep the hotel guest, office works or students happy").   Facility management and operations teams are skilled at ensuring operational reliability.  But they often may not have the time, skills or corporate mandate to focus on energy management across all corporate operations. New skills are also needed to act upon the flood of new data from the increased use of energy management software that pulls together energy cost and use data from utility bills and submeters.

Ten years ago very few companies had a Corporate Energy Manager. Today perhaps twenty percent do, and in five years we expect the vast majority of large companies will have staffed this position as the profit enhancement from energy efficiency is simply too great ignore and the return on investment for the program is often less than one year.

For those just starting a program, the Energy Star has a decent framework. 

What do you think about this new role?  If you are involved with energy management, consider taking our Corporate Energy Manager survey (info below).

Take the GreenBiz/Groom Energy Corporate Energy Management Survey 

We have partnered with GreenBiz on a survey to better understand the role of the Corporate Energy Manager.  If you involved with energy management, please take this 10 minute survey. In return, we'll send you summarized results so you can benchmark your program (no individual company information will be shared).   Take the survey here.

NAEM Survey: Common Approaches to Managing EHS and Sustainability Data

NAEM recently published a free, useful report about how large companies are managing EHS and sustainability data.   Here are some highlights of the report from 116 large and mostly US companies (69% of respondents had revenue from $1-25B). This summary and the full report will help EHS and sustainability professionals benchmark their approaches and investments.

Key findings from NAEM Survey on Managing EHS and Sustainability Data

• Large companies continue to use a variety of software approaches (in-house, off-the-shelf software and a combination) to solving the data management problem
• Companies with a high level of EHS risk are more likely to use supported, off-the-shelf software products
• The average age of off-the-shelf products is 4 years
• Top two features for internally developed solutions are accident/incident management and incident reporting, where the top two features for off-the-shelf products are chemical/MSDS management and accident/incident management
• Supply chain monitoring, managing product regulations, and product footprinting are the largest unmet needs, but there are very few unmet related to health and safety 
• Maintenance cost average $75,000 for companies with 80,000 employees but could go as high as $175,000 (the license revenue cost were not asked in this version of the survey)
• Integration is uncommon, with around 50% of companies have EHS/Sustainability software that is not electronically integrated with the business system (such as ERP)
• On average, 20% of employees access EHS and sustainability data systems
• Top 3 reasons for investing in data management system are

1. Improve EHS and sustainability performance
2. Improve communications about EHS and sustainability activities
3. Improve corporate-level visibility of EHS and sustainability performance

• Greenhouse gas emissions reporting is tracked by internally developed systems at 40% of the companies

I found this report very useful and it comes from a highly qualified list of respondants. The high percentage of internally developed software is surprising and I fully expect that over the next 3 years the majority of companies move to SaaS or hosted version of software.  The full report is available for free here.

55% Energy Reduction, Really? Yes - the Power of LED and On-Bill Financing

LED Lighting with Controls

Atlas Box and Crating, a Groom Energy customer, cut its energy use by half and was able to take advantage of on-bill financing from the local utility.

Using multiple technologies (upgrades to lighting, compressed air, and other technologies), Atlas Box reduced the total energy consumption at its two manufacturing locations by 1.25 million kilowatt-hours - 55% of its total energy consumption. Much of this savings is generated by the use of LED lighting with controls.

Not only do these projects provide a strong financial return but they also allow Atlas Box to reduce its carbon emissions, which is important to its top customers like EMC who encourage suppliers to become more sustainable.

The local utility, National Grid, provided on-bill financing which enabled the company to avoid using its capital dollars for the upgrades.

These projects demonstrate the power of new technology to drive large energy savings with strong financial returns.

If you would like to learn more, join us for a case study with Atlas Box representatives on March 12 at 2p EST. Register here.

Is Energy Management a Subset of Asset Management?

As more organizations automate internal processes related to sustainability, EHS and energy management, asset management is another area that overlaps.   Companies can expect more energy management features in asset management software and may, in some situations, be able to meet their needs with a single application rather than two.

Energy management and asset management have different initial aims. Energy management seeks to reduce the energy cost of operating building and factory equipment and is typically the purview of the facilities, energy or operations team at the local, and increasingly, the corporate level.   Asset management intends to avoid downtime of production lines and facilities and to save costs and is used by the facilities or operations team at the local level. Historically, energy management and asset management have been separate processes with separate software solutions.

However, more teams are realizing a connection between energy management and asset management. Real-time energy consumption and other attribute monitoring can be used to detect problems with roof-top units (RTU) and other HVAC equipment, motors, and fans as well as to identify energy savings opportunities. Several companies now have their asset management team coordinate work with the energy management team.

With real-time monitoring of equipment, operators aim to proactively recognize opportunities quickly and to apply preventive maintenance actions before responding to outright equipment failure. Both asset and energy management requires identifying assets, monitoring real-time equipment usage, and alerting operators of problems. 

Software vendors are responding to this emerging need.  Traditional asset management vendors such as IBM/Maximo and Infor have added initial energy management capabilities and energy management vendors who utilize interval data are adding basic asset management capabilities to their core products.

A single software product for each process makes sense.   A single master list of equipment (name plate info, age, drawings, etc.) can be used for both asset management and energy management.   Proposed and completed maintenance and energy projects can be tracked in one system. Operators and facility managers will receive the same type of alerts and work orders for both maintenance and energy improvements.

Such an approach doesn't fit all situations and associated vendor capabilities are still nascent in many cases.  

But energy and maintenance leaders should monitor this trend and may find situations where it make sense to add light weight asset management to an energy management implementation or conversely to supplement an asset management deployment with energy monitoring capabilities.

Public GHG Reduction Goals Drive Energy Accountability

In our travels and client work, we note material differences in energy accountability in organizations with public GHG reduction goals compared to ones without public goals. Examples abound but include Applied Materials, City of Boston, Harvard University, and Sanofi to name just a few. Energy and sustainability leaders need to leverage these public goals when they have them and to advocate for public goals if their organization lacks one. 

These public and often BHAG (Big Hairy Audacious Goals from the Collins and Porras book, Built to Last) reduction goals provide many tactical benefits and drive energy accountability and reduction. Here are some examples of specific behavior changes driven by public goals that we have seen in the last six months:

• A yearly review of the GHG goal and energy reduction plans by the Board of Directors at a large company. Before establishment of the GHG reduction goal, the Board did not review energy reduction plans.

• Corporate-level tracking of energy projects to ensure coordination and achievement. Previously, energy projects were considered "maintenance" and were only of concern at the local level.

• An invigorated cross-functional, Energy Governance Committee to monitor quarterly progress against energy goals and to guarantee accurate and timely energy data distribution to budget owners.

• Senior management at one Fortune 500 company established a goal to stay in the top quartile of their industry in two well known sustainability ratings. This reputational goal strengthened the business case for investment in energy projects.

• At a food manufacturer, the account team that sells to Walmart now reviews energy efficiency projects for the upcoming year so they can demonstrate operational improvements to Walmart and other large customers committed to a greener and leaner supply chain. While not directly a public GHG reduction goal, meeting customer expectations for GHG and energy improvements provides similar organizational benefit. 

• In response to a BHAG GHG reduction goal at a major U.S. city, the city's leadership team including the Mayor invested in a comprehensive energy management program (additional staff, projects and technology). The City previously did not systematically focus on energy reduction.

• A multinational combined corporate staff responsibility for energy procurement, energy consumption and GHG reduction into one team for better cross department coordination and senior management visibility.

Conversely, organizations lacking a public GHG reduction goal often see energy management efforts atrophy. Two instances:

• At a large manufacturer, the sustainability team was reduced to one person and folded into the EHS team as energy and GHG reduction became less of a priority for senior management as public discussion waned. 

• The highly successful energy and sustainability team at one company is disbanded after the company was acquired by a larger company that did not have a public GHG or energy goal.

In short, public goal GHG goals are effective tools. While not easy to secure, these goals drive operational improvements in energy use. More management teams and Boards need to establish and support them.

4 Trends in Energy Management Software (EMS) Vendor Market in 2012

In 2012, we've seen many changes in the vendor market for energy management and sustainability software.   Energy and sustainability leaders need to be aware of these changes as they evaluate vendors in 2013.   Here are four notable trends. 

1. BMS vendors begin to open up their closed, proprietary building control systems.

Led by Johnson Controls, BMS control manufacturers begin to add API and other ways to allow customers to open their BMS data and controls to non-BMS vendors.  Control manufacturers are slowly catching up to the realities of an open, multiple vendor approach to monitoring and controlling energy and assets.    Industry-accepted communications standards, low cost communications and innovative sensors and meters are driving a move from "dumb" facilities and operations with no visibility to "smart" facilities and operations that are networked and digitally communicate usage trends and remotely control assets.  

2. High profile, venture-backed startups switch CEOs and business models in search of a winning approach

A number of the high profile venture-backed startups went through CEO changes, layoffs, and strategy changes as they adjust their expense levels and approaches to actual customer needs and market demand.  

After raising $45M, Hara is on its third CEO in 18 months and is offering free trials and free versions of its software (similar to Noesis Energy which raised $14M).

C3, which raised $89M, downsized and switched its messaging and focus from large commercial customers to utilities with its acquisition of Efficiency 2.0.  

Initially backed with $17M, SCIenergy merged with Transcend, the energy financing startup with the Transcend CEO now running the newly combined entity.

SeriousEnergy, which raised $130M and tried to combine varied businesses including manufacturing high performance windows, energy management software and energy financing, downsized and experienced significant management turn over (some of it detailed in this GTM article).

   

3. Acquisitions by large companies hit the market

Schneider Electric's acquisition of Summit Energy seems to be going well as we receive numerous inquires about it from companies.  Schneider Electric now offers a very broad energy management set of offerings from meters, to controls, to utility bill management and to procurement.  The Siemens' acquisition of Pace Global is also watched by many.  

  

Look for other large firms like Honeywell and Johnson Controls to make acquisitions in 2013. 

4. Innovative firms continue to raise money

Innovative and often very focused startups raised money in 2012. Some notable ones are: 

• First Fuel, energy data analytics, raised $10m in Series A
• Outsmart, energy monitors, raised $1.5M in Series B
• Powerit Solutions, energy controls, raised $8.5m in Series B and C
• Stem (formerly Powergetics), energy storage, raised $10M in series A
• Urjanet, utility bill aggregation, raised $4m in Series B

The need for organizations to lower costs and to improved operations continues to drive purchases of energy management solutions. Purchasers need to be aware of the changing vendor landscape to ensure the most intelligent and least risky purchase decision.

Who Has Time to Read and Analyze Submeter Energy Data (Part 2)??

Part one discussed the benefits for energy and facility managers of near-real time data for specific energy loads, work areas, or equipment.   We reviewed some of the challenges such as time-starved staffs, misplaced internal corporate incentives for energy improvement, and a long ROI for the actual meter installation.

Responses

We received responses from many of you -- thank you. Here is a sampling.

Paul Hepperla, VP of Strategy at Verisae, shared some quantitative data that reinforces the challenges. He noted that the Institute for Building Efficiency surveys found that about 50% respondents only rely on utility bills for their energy data and at least another 10% don't look at any energy data (utility or meter). Small team size are confirmed in IFMA surveys that show 2.3 FTE's on energy teams for large entities (more than $30M in energy spend and 5M square feet).

Paul and others noted that identifying true energy use anomalies from these large data sets requires human domain expertise and is more than simply looking for graphical trends of, say, kWh per square foot.

Bill Holmes of Holmes Energy shared a story of an engineer in a steel mill who had servers full of years of data from every second from every system but had no budget, time or tools to make sense of it.

Many noted that flat energy priced elongate the ROI of meter investment and that few utilities currently provide incentive for behavior changes.

Several corporate sustainability managers mentioned the need for solutions that were corporate-wide (or at least corporate-wide across their largest facilities or across their stores or hotels).

Practical Solutions Emerge

Practical, workable and affordable solutions are emerging but all involve a combination of technology and human domain expertise (and increasingly this human expertise is at the vendor).

Our list of practical solutions does not yet not include solutions from utilities involving smart meters. While utility smart meters are a very important trend, they are only a part of and not the entire solution for organizations.   Utility smart meters provide only main meter data which is not load-specific and the utilities do not have domain experts to interpret the data.   Technology-only solutions (all the rage now with the "big data" trend are similarly insufficient).

We are impressed with solutions that are a cost-effective extension of the existing facility or energy management team since in general we don't see companies en masse increasing the size of these teams. These solutions fall into three broad categories.

1. Outsourced energy analysis to interpret the data and generate proposed work orders. Here vendors have human energy analysts who interpret data for several clients at a time. (Vendor examples include Verisae, EnerNOC, Cimetrics, Schneider Electric, Ecova and others.)

2. Outsourced monitoring and control of HVAC and lighting. Here a third party not only analyzes interval data but also remotely controls assets such as turning down temperatures or controlling lights based on weather or occupancy changes. (Vendor examples include Phoenix Energy Technologies and others.)

3. Truly open BMS systems. Here organizations can easily provide multiple vendors access to submeter data from their BMS for analysis. (One example is Johnson Controls' Panoptix Platform Services that enable facility managers to share data via APIs with third party vendors. Other BMS manufacturers are rumored to be headed in the same direction.)

The benefits and challenges of submeter data for energy reduction are well recognized. Because of small energy staff size and occasional skill set mismatches, solutions that are a mix of technology and outsourced domain expertise are currently the most promising.