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Opinion Piece Professional services – delivering ROI on your energy optimisation and efficiency initiatives

03 December 2014

By Kevin Norris, Executive Director of Jasco Power and Energy

Energy costs continue to increase year on year, placing additional pressure on organisations that are already struggling in a challenging economy. As a result of this and a growing trend towards greater efficiency and reduced carbon footprint, enterprises are increasingly looking towards energy optimisation initiatives to not only lower the cost burden of utilities, but to decrease the planetary impact as well. Reducing costs and energy consumption also needs to be balanced against business impact – operations should not be negatively affected by any energy savings projects. Significant time and money is often invested into such ventures, typically around replacing older equipment with more modern and energy efficient versions to provide savings without negatively impacting the business. However, unless continual improvement can be assured, realising returns on this investment can be difficult. Professional services around energy optimisation and efficiency can help organisations to deliver on-going value and ensure that maximum benefit and return on investment (ROI) is delivered in the long term.

 

One of the prime market drivers behind the implementation of energy efficiency programmes, aside from a well-known shortage of available energy, is the fact that the cost of energy has increased dramatically over the past five years. To put this into perspective, 1000 units of electricity used to cost in the region of R500, and now costs around R1500 for the same amount. While the National Energy Regulator has delayed the inevitable by limiting electricity price increases to 8%, this is not sustainable, and we can expect to see another exponential increase in 2015. In addition, the implementation of a Carbon Tax, which is due to come into effect in January 2016, is putting further pressure on organisations to reduce and optimise energy consumption.

 

When it comes to reducing energy consumption, there are several initiatives that are often employed as quick wins, such as the replacement of inefficient light fittings with technology such as CF or LED bulbs, which use less electricity. Other areas that can be addressed include the heating, ventilation and cooling (HVAC) systems, which often use legacy equipment and do not function optimally for the requirements of the building. Turning off lights automatically, installing motion sensors to detect when there are people in the building for lighting and HVAC purposes, and other automation tools, can also be deployed. In addition, organisations are increasingly looking at alternative energy solutions such as solar panels to help take away some of the cost pressure. However, implementing alternative energy without first optimising consumption is an unnecessarily costly task, and simply changing equipment without proper thought given to management and monitoring, can lead to organisations failing to realise full ROI from their energy optimisation initiatives. Leveraging the benefits of professional services as part of an energy optimisation project can help to ensure that this challenge is minimised.

 

In order to ensure maximum returns from any energy optimisation or efficiency drive, it is vital to follow a comprehensive process that includes three important phases. Firstly an audit needs to be performed to establish the current usage. Obtaining sufficient information to establish this is not always possible from electricity bills alone, so it may be necessary to install Advanced Metering Infrastructure (AMI), which enables the real-time monitoring of consumption. Measurement is critical to management and to ensuring that energy savings objectives are met and continue to be realised in the long term. Information from this audit can then be used to establish a usage trend line, which will make it possible to determine where the areas of opportunity exist for leveraging savings. These opportunities should always be driven by a number of factors, including potential cost savings, ease of implementation and any rebates that may be available at the time. ROI is then determined by the savings that can be achieved from the energy efficiency intervention.

 

Once these two phases have been implemented, professional services come into effect to ensure maximum ROI is realised in the long term. An energy partner offering professional services will continually monitor energy consumption and savings, creating greater visibility into the success or otherwise of an energy optimisation project. The service provider can also provide guidance as to the accuracy and suitability of monthly electricity billing, which opens up the potential for further savings. The service provider can also offer advice and guidance on any energy programmes to be introduced that may have a positive or negative impact on the business, for example renewable energy solutions, or the impending Carbon Tax. Professional services around energy optimisation is about the creation of a partnership that will ensure the organisation remains as energy efficient as possible, and continues to comply with the ever-changing regulations around energy consumption and carbon emissions.

 

As energy prices continue to rise and regulatory compliance around energy consumption becomes increasingly onerous, implementing energy optimisation initiatives has never been more important. In addition, energy interventions are often required prior to the implementation of alternative renewable energy solutions such as solar. Engaging the services of an energy partner throughout the process, and in an on-going manner through professional services, will ensure that ROI is leveraged from the start and continues to be realised, to ensure that energy savings can be measured, monitored and adjusted as needs change.