The Three Stages of Energy Management Maturity

From Basic Awareness to Organizational Competency, Taking Charge of Energy Consumption Is an Evolutionary Process

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OpsManagement'11

By Aaron Hand

Like many things in life, energy management comes in different forms, with varying levels of awareness among those who engage with it. As consumers and plant managers alike become increasingly aware of the importance and relative ease of pursuing energy-saving initiatives, it's the low-hanging fruit that most of us are aware of and take action on.

At a Wednesday morning OpsManage session this week in Nashville, Tenn., Bill Schiel, director of business development for Invensys Operations Management, described four distinct levels of corporate energy management. Although Level 4 is more of an enterprise-oriented awareness that involves monthly and quarterly reports and such, the first three levels consist of steps plant sites can take to improve energy awareness and ultimately deliver cost savings.

Level 1 involves active, point-of-use information and closed-loop accountability at the work level, Schiel explained, while Level 2 incorporates real-time energy awareness of energy costs, deviations and action effectiveness. "A lot of us live in Level 1 and Level 2," he said. Level 3 is more off to the side, he said, but is where true energy cost allocation comes into play. "Energy cost is very often part of the overhead; the fixed cost structures that vary widely," he said. "Levels 1 and 2 enable Level 3, which is activity-based costing for energy (ABC4e)."

According to the U.S. Department of Energy (DOE), corporate energy management (CEM) moves accountability for energy outcomes to the upper levels of a company rather than those outcomes being the sole responsibility of plant managers and engineers. The idea is to involve all departments, in fact. "Bringing corporate-level attention and management into the picture helps to ensure enterprise-wide opportunities are explored," the DOE writes.

Energy-saving activities need to move from what is typically ad hoc awareness—going after the low-hanging fruit—to a higher level of awareness, and ultimately to a more managed stage, Schiel said. At the ad hoc level, a plant might install energy-efficient lighting and occupancy sensors, variable-speed drives, and low-flow water fixtures. They'll do spot checks and manual reporting of energy and water usage on a monthly or even weekly basis. "But there's no real correlation of what you did to what you measure," Schiel said. There's little checking on whether the changes worked and whether they're still working. "Low-hanging fruit grows back."

At the awareness stage, an organization learns more about energy usage and adapts through sub-metering, experimentation and ROI awareness. Weekly, daily and even shift reports become part of the normal operations management, along with real-time notification of successes, deviations and failures, Schiel said. Challenges here include the demand for more meaningful data, related to individuals' responsibilities. Although knowing deviations and failures is good, Schiel said, there is not yet the eye to preventing them.

Finally, at the managed stage, energy management is an organizational competency. "Everyone knows how energy usage and deviation affect financial performance," Schiel said. Energy is managed as a variable cost and used by ERP for planning; the benefits of energy management are sustained year after year, regardless of workforce turnover; automation is in place to prevent deviations; and the smart grid becomes a competitive advantage.

Perhaps easier said than done, however. As Bill Tokash, director of sustainability at Invensys PLC, noted, "At first, every project on energy efficiency is a snowflake. You've got to start from scratch and figure out what you're doing every time."

In the U.S., deregulation is done by state, making it difficult to get through the maze of regulatory status, Tokash said. There are also different rules within each regional transmission organization; grid regions are different, with varying developments on smart grid efforts; and the carbon footprint grid is different still. Twenty states have Energy Efficiency Resource Standards (EERS), and five states have energy goals, he added.

Although most plants have plenty of data on time-based energy usage, there is little operational information, Schiel said. "Continuous improvement based on time-based data and no accountability is difficult," he added.

With Wonderware at its core, Invensys offers solutions within the Level 1-3 space, including energy data collection and analysis; demand response; building management systems (BMS) integration and control; real-time manufacturing energy intensity and events; carbon reporting; condition monitoring; forecasting, procurement and financials; workflow management; site activity management; audit trails and evidence provision; and multiple deployment models.

Schiel seemed particularly excited about the incorporation of ArchestrA Workflow into the mix. "Now that we have it, I can't do enough with it," he said. "It orchestrates all these activities in a predefined manner, creating an audit trail. To me, that's closing the loop that is typically open."

Another theme that has been heard often this week is the idea of adding context to data. The same is true in energy management, where both internal and external context can have considerable effect. "Data without context is just data," Schiel said.

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