Conduct an energy-efficiency assessment - large businesses

Conducting an energy-efficiency assessment helps business owners and management understand of how and where energy is used, where to improve usage and equipment, and how to reduce costs.

Energy management practices should be undertaken at a level appropriate to the size and resources of the business. This is also true for energy-efficiency assessments. Organisations need to factor in their size, energy expenditure, and resources when planning an energy-efficiency assessment.

A preliminary scoping assessment can identify savings potential and may secure resources for a more detailed assessment.

A well-planned energy-efficiency assessment in one area of an organisation can often be leveraged by using methodologies that can transfer the findings and outcomes to similar sites, technologies or processes.

Best practice energy-efficiency assessments have several key components in common.

Start with a strong plan

The project plan should detail the objectives and scope of the assessment.

This includes:

  • activities to be undertaken
  • timing
  • key personnel
  • financial and technical resources required
  • potential risks and strategies to manage them
  • expected deliverables

The plan should also outline actions to be taken post-assessment, including reporting on outcomes and timelines for tracking, review and potential future assessments. The plan often evolves as the project team is established.

The amount and cost of energy use for the organisation can be a guide to the level of resources dedicated to the assessments.

Engage the right people

The value of an energy-efficiency assessment can be dramatically increased by proactively engaging with stakeholders throughout the organisation.  The necessary skill sets may exist within disparate parts of an organisation, which reinforces the need to use both a team-based and company-wide approach.

Ideas for energy-efficiency improvements can often be found at all levels of an organisation, from 'shop floor' operators through to corporate office. Stakeholders also include the people who have influence over capital and operating budgets, executives with the authority to make changes, and those with a direct role in implementing the improvements.

The assessments should include not only those with energy and process expertise but also people external to the process, who may provide alternative perspectives and encourage different ideas. A ’cross-silo’ approach may lead to the most innovative solutions.

Decide when to use external resources

Depending on factors such as an organisation’s energy expenditure, size and resources, it may be worth creating full-time positions dedicated to energy efficiency or deploying staff to specific assessment tasks. For some organisations it may be necessary to source external technical expertise.

Energy services companies can support specific aspects of an assessment, including data collection, opportunity identification and analysis, facilitation and reporting.

Preparing a ‘scope of work’ helps to clarify expectations and the input required to facilitate the contractor’s work. The scope of work should contain the principles discussed on this page to ensure that the business can compare quotes, the services on offer, and an estimate of potential outcomes.

The scope should also clearly outline how analyses and recommendations should be presented to enable findings to be incorporated into business cases. This includes any assumptions made in the estimation of project costs and energy savings.

Understanding energy use

Developing a good understanding of energy use, and relating energy to core business activities can yield many insights into the relationship between energy and productivity.

Gathering new data typically begins with high-level data that is readily available.

Invoice data can be summarised based on the types of energy used and the processes or sites where the energy is used, with each expressed as a proportion of total energy use. This information is often available in existing financial or greenhouse gas accounting systems, or can be sourced from energy retailers. Consumers can request that retailers provide more detailed metering data on which the invoices are based.

This type of high-level analysis can enable the company to better understand risks and opportunities for improvement. However, information at this level is relatively vague as it represents the aggregated energy spend for an entire facility or business unit. To derive full value from the assessment process, a much deeper understanding of energy use is required.

An initial analysis of available data often reveals data gaps where greater information is required, and identifies key energy-using areas or processes which should be prioritised for more detailed analysis.

Several technologies and techniques can be used to measure energy use within a facility or process. Temporary meters can be hired and used on a short-term basis, or permanent meters can be installed where appropriate and cost-effective. Ensure that the measurement frequency and timeframe capture a representative operational period. Intraday, daily, monthly or seasonal variations may need to be measured and taken into account.

The data set can then be augmented using other sources, such as automated processes like supervisory control and data acquisition (SCADA) or programmable logic controller (PLC) systems. Discussions with facility or process managers, accounting personnel, environmental reporting staff and other personnel around the site can often uncover other data sources to consolidate into the energy analysis.

In addition to energy usage data, collect detailed data on other variables such as production throughput, ambient temperature, process parameters, and operating modes or profiles.

Combining energy data with other business data provides insight into the effects of one factor on the other. For example, the energy use per unit of production may differ at different production volumes. Changes in environmental conditions may impact energy-use patterns.

Other business contextual information such as organisational changes, growth projects, and planned shutdowns can also have a significant impact on energy use and should be taken into account.

A rich collection of energy and business contextual data enables a comprehensive understanding of the factors that influence variations in energy use.

Analysing the results

Analysis of energy data can initially be used to calculate an energy baseline to establish the relationship between energy use and business activity. This baseline relates energy expenditure to business output over a specific timeframe.

Analysis can yield many insights into the reasons for changes in energy consumption, efficiency and productivity. Graphs and statistics often raise questions which stimulate further investigation, bringing a more in-depth and accurate understanding of energy use and the efficiency opportunities that may exist.

Different analysis techniques can yield different findings and insights. The correct selection and use of analysis techniques is critical, as this will underpin the identification and evaluation of opportunities.

Common analysis techniques include:

Graphs of energy use over time (seasonal, monthly, weekly, daily, hourly)

Understanding the reasons behind energy-use patterns and changes in energy use in relation to business activities can often yield new insights.

X-Y plots of energy use versus production or other parameters

This technique can reveal whether or not there are relationships between energy use and production. It can also highlight if any production thresholds exist where a dramatic change in energy use occurs.

Benchmarking

Using energy performance indicators reveals whether a process, facility or business unit is operating at its optimum performance level. Benchmarking can be used to compare actual energy use with theoretical (calculated or simulated) energy use. Comparisons with other plants, sites, processes, shifts, operators, or other aspects, can be drawn.

Pinch analysis

A design method based on graphical analysis that can be used to optimise the design of complex thermal systems so as to maximise heat recovery. For processes or plants with complex flows of hot and cold streams, pinch analysis can be used to evaluate whether there are further opportunities for better heating and cooling through the placement of heat exchangers at optimum locations within the process. This method requires engineering expertise.

First principles (theoretical calculations)

A theoretical calculation of estimated energy use can be used to assess systems which cannot easily be measured. Theoretical models are less costly to interrogate than changing the actual system, allowing different scenarios to be explored through the manipulation of operating modes, variables and parameters.

Energy mass balance

The practice of balancing the energy and materials flows within a site, facility, or individual equipment or machinery, can provide a deep understanding of energy and material flow. This modelling can indicate where energy is exiting the process through heat or steam losses, and where opportunities to improve efficiency may exist.

This listing of analysis techniques is not exhaustive. There are many other engineering, logistical, and experimental methods that may be employed to develop a better understanding of energy use.

Identification of opportunities

The process of opportunity identification ideally uses the data which has been analysed to identify areas where energy saving opportunities may exist.  Providing the results of this energy analysis to a broad range of people throughout the organisation can often result in further ideas and insights.

The importance of involving a cross-section of personnel to identify opportunities cannot be understated.  Workshops are a common means of gathering the relevant experts to discuss the data and information gathered during the energy assessment and brainstorm potential ideas and opportunities.  Further collaboration can be achieved through focus groups, site visits, staff suggestions, and consultation with suppliers or external experts.

All identified opportunities should be documented in a ‘register of opportunities’ or similar document. This often becomes an enduring record used to track ideas and outcomes, and revisit potential opportunities if operating conditions or energy prices change.

The detailed investigation phase determines the feasibility of each opportunity, and provides decision-makers with the information they need to make a final investment decision. Further analysis is often required before a decision is made on what opportunities to implement. This may require investment in equipment to improve measurement accuracy or time spent collecting more data.

 Businesses often have established practices for evaluating and seeking funds for new projects, such as project charters or templates. Energy efficiency opportunities that merit a more detailed analysis should use these existing processes.

 A ‘whole of business’ approach which extends beyond cost and energy impacts to include strategic, labour, health & safety and other concerns, improves the understanding of the overall costs and benefits of energy efficiency opportunities.  Project risks also need to be understood and addressed

 Other factors which may be considered in this analysis are:

  • Shutdowns or downtime required to implement the change;
  • Changes in production output;
  • Changes in other process inputs, such as water or raw materials;
  • Changes in maintenance costs;
  • Hardware changes that make spare parts inventories obsolete;
  •  Business plans or forecasts that affect the lifetime or throughput of the process that is being changed; and/or
  • Costs of training or new skills that might be required.

Comprehensive and detailed analysis builds confidence in the findings amongst the project team and senior management.

Business decisions and implementation

Once the results of an energy-efficiency assessment are back, begin the process of deciding where best to start. Calculating the payback period or cost savings of each particular improvement can assist with prioritising the efforts.

Tracking and communication - closing the loop

Once improvements have been implemented, make sure the changes are tracked and reported: this can yield further insights into energy use, track any issues or unintended consequences that have resulted from a change, and build internal knowledge and expertise in energy management.

Communicating the outcomes to senior managers and the rest of the organisation will help build valuable support for future energy management initiatives.

More information

Energy Efficiency Opportunities Assessment Handbook

Energy Savings Measurement Guide

Energy Management in Practice Manual Sustainability Victoria

Australian standard for energy auditing AS/NZS 3598 Standards Australia

A Best Practice Guide to Energy Performance Contracts Energy Efficiency Council

Guiding Principles for Successfully Implementing Industrial Energy Assessment Recommendations US Department of Energy

Staff Awareness and Motivation Guide The New Zealand Energy Efficiency and Conservation Authority