MY “Five Steps for Planting the Seeds of an Energy-Savings Program”
Phil Adams | March 7, 2012 at 6:03 pm
What struck me about Mario Rufino’s article over at Environmental Leader is how eloquently it frames the backstory of the sustainability officer: well-intentioned, under-funded, and somewhat disconnected. It highlights what we see every day in our customer work: the importance of a holistic approach to energy management particularly as it pertains to sustainability.
Here are MY “Five Steps for Planting the Seeds of an Energy-Savings Program”
Step One: Understand that your CFO is your Biggest Asset. You don’t have to “operate in survival mode” or do “more with less”. If you can show ROI, and better yet, a self-funding program, the CFO will give you resources.
Step Two: Understand your Total Energy Costs. Quantity used is certainly one important aspect, and taking steps to be more efficient makes a lot of sense, but don’t forget about commodity price. Did you know that you can buy green power at little to no premium to conventional power if you source green power as part of an energy procurement? Are your facilities in deregulated markets on competitive supply or still with the utility? Is your buying process yielding the lowest price? If you could save money on the commodity, could you reinvest some of those savings into efficiency or sustainability measures?
Step Three: Create an Integrated Plan. What you do and when you do it matters. Trying to do more with less? What about engaging in a demand response program, and then utilizing those ISO payments to fund an efficiency project? How about tapping utility incentive programs for efficiency projects? Some utilities reimburse for up to 70% of a project’s costs, think you could convince your CFO to support the other 30%?
Step Four: Let ROI Drive Focus. There are many efficiency measures you can do. Being analytical about the impact of the project and rigorous about ROI and payback periods will help determine the “batting order” of your plan, and will demonstrate financial savvy that can win points with your CFO.
Step Five: Lather, Rinse, Repeat. Your plan must be dynamic. Things change. Pennsylvania becomes competitive. Demand Response payments change in PJM. A utility offers a new incentive program. Natural gas prices are at all-time lows. Changes in the regulatory and pricing environment are happening all the time, your plan needs to be nimble enough to react to changing circumstances.
Leave a Reply
- Our take on what's happening, what matters, and what's working in the new energy marketplace.
Subscribe to Our Blog
Browse by TagAccountability Acquisition Alban Engine Allowances Auction Budget Certainty Cap and Trade Carbon Competition Cost Savings Demand Response Efficiency Efficient process Electricity Energy Management Financials Government Green GSA Healthcare Higher Education Incentives Inside World Energy Investors Investors News Market Edge Market Expertise Market Opening Natural Gas NStar Office Hero Procurement Rate Caps Renewable Energy Retroficiency Reverse Auction RGGI Risk Managment Savings Seven Levers of Energy Mgmt Smart Grid Sourcing Utilities Virtual Energy Audit Wholesale