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Energy essentials

A guide to energy

Introduction 2 Energy management as a career 28

Who can be an energy manager? 29
What is energy management? 4
Skills and competencies 29
Energy management and energy efficiency 5
Technical skills 29
Energy Management Systems (EnMS) 5
Managerial competencies and skills 29
Treating energy as a tangible resource 6
Career path 30
Effective procurement strategy 6
Professional recognition 30
Understanding by measuring 7
Continued professional development 31
Why manage energy? 8 Career support from the EI 31
Reducing energy costs and minimising risks 9
Additional information 32
Complying with policies and regulatory frameworks 10
Further reading 33
Improving organisational effectiveness 11
Glossary 34
Improving corporate social responsibility 11
Career resources 35
How to manage energy 12 EI accredited courses 35
The business case 13
Implementing energy management 13
Energy management standards 14
Plan 16
This edition was researched and developed by the EI Knowledge Service Team Energy policy 16
with substantial input from EI Fellows and Members with subject expertise, whose Monitoring and targeting 16
contribution is gratefully acknowledged. This guide contains a number of technical
terms. Where possible the EI has defined these. For all terms emboldened in the Energy strategy 18
text, a more complete definition can be found in the Glossary. Further information Getting senior management support 18
can be found on the Energy Matrix: knowledge.energyinst.org
Do 20
First edition 2016
Copyright © 2016 by the Energy Institute, London. Ensuring staff engagement 21
The Energy Institute is a professional membership body incorporated by Royal Buy-in from suppliers and partners 22
Charter 2003. Registered charity number 1097899, England
All rights reserved. Check 23
No part of this publication may be reproduced by any means, or transmitted Act 24
or translated into a machine language without the written permission of the
publisher. Data analysis 25
ISBN 978085293 792 1
Published by the Energy Institute.

Designed by thirdperson.co.uk
Energy essentials | Energy management     3

Meeting the world’s growing and achieve global sustainability. The does not improve without active
energy needs while mitigating the transition to a low carbon economy intervention. Energy management
effects of climate change is one of raises infrastructure, affordability, and varies between organisations, but
the most demanding challenges of other challenges for all nations that it starts with an individual taking
our time. rely on burning carbon-based fuels for initiative and asking questions about
energy. energy use. This guide places that
Global energy demand is expected
‘energy manager’ at its centre and
to increase substantially in the next Key to solving these issues will
describes the questions that should
few decades. This is mainly due be managing energy use more
be asked as energy management is
to the projected growth in world effectively. Energy management
introduced in the organisation.
population, and the economic and is an essential strategy for all energy
industrial growth of developing users who seek to minimise exposure This introductory guide shows why
countries such as China and India. to energy price volatility and reduce energy management is important
Figure 1 shows the projected increase their carbon footprint and resource for all organisations and gives
in world energy consumption up to use. It can have further benefits for an overview and explanation of
2040. At the same time, reducing an organisation’s overall effectiveness the process involved. It describes
the amount of greenhouse gas and social responsibility. the main steps for introducing,
emissions, in particular carbon dioxide implementing and maintaining an
People are at the centre of energy
emissions from fossil fuel energy use, energy management system (EnMS).
management; energy performance
is necessary to tackle climate change Lastly, it investigates the opportunities
for those interested in the energy
management profession and describes
how to successfully develop their
History Projections It is not meant to provide detailed
800 engineering or financial advice; rather

Energy Consumption
it illustrates the broad concepts

(quadrillion BTUs)
non-OECD required to manage energy in a
systematic manner. This guide is
designed for individuals who need a
high level introduction to managing
200 OECD
energy, the informed layperson,
and anyone who is at the early
1990 2000 2010 2020 2030 2040 stages of their career as an energy
management professional.
Figure 1: Historical and projected world energy consumption of OECD and
non-OECD countries between 1990 and 2040 (OECD: Organisation for Economic
Cooperation and Development) Sources: BP Statistical Review of World Energy June
2014 and Energy Information Administration (EIA) International Energy Outlook 2013
4     Energy essentials | Energy management Energy essentials | Energy management     5

1 What is energy
Energy management Energy Management Systems
What makes a successful
and energy
Energy management can be tailored
efficiency to the size and the needs of any • Assessment of the EnMS at
regular intervals and whenever
organisation. In order to be effective,
Managing energy is directly there is a significant change in
The terms ‘energy management’ and it requires the implementation of a
related to other types of energy consumption
‘energy efficiency’ are often used plan or system which is flexible, value-
management within an
interchangeably. However, there are driven and in alignment with the • Adjusting and improving the
organisation such as resource
differences between them. strategic aims of the organisation. EnMS based on lessons taken
management, asset management
and risk management. Energy efficiency is the use of Energy management systems are from regular assessment
the minimum amount of energy designed to help organisations by
while maintaining a desired level providing a systematic and well-
of economic activity or service. In structured framework. An EnMS
other words, energy efficiency is the supports energy management, but is
amount of useful output achieved not a substitute for it. Although the
per unit of energy input. Improving basic elements of an EnMS should be
energy efficiency means either similar across organisations, there are
achieving more from the same input differences in the implementation of
or achieving the same output with the system depending on the size and
less energy. the complexity of an organisation’s
operations. This guide uses the Plan-
Energy management is a
Do-Check-Act management process
systematic and continuous effort to
as an example of such a framework
improve energy efficiency within an
for improving energy performance.
organisation. It can take many forms
Whilst an EnMS is not a requirement
and involve all types of interactions
for managing energy, it provides
with energy, from procurement and
a useful and practical context for
purchasing strategies to technological
understanding and a structure
improvements and behavioural
for continuous improvement.
Organisations should choose any or
all of the components of the EnMS
based on their specific circumstances
and requirements.
6     Energy essentials | Energy management Energy essentials | Energy management     7

What caused this spike in energy use?

Energy use
Treating energy as 2. Measuring consumption: Understanding by Time of day

a tangible resource Energy differs from other commodities


and consumable resources in that,

Energy use is the consumption of in many cases, it is intangible and Managing energy, as with any other Is equipment being left on overnight?
an energy source or fuel such as invisible. For that reason, and because resource, requires the development
electricity, natural gas, diesel, petrol it is continuously delivered, the level of an understanding of its use within
or coal. Energy is used to provide of consumption of an energy source an organisation. At the core of
a service such as lighting, heating, such as electricity or gas is difficult to energy management is the process of

Energy use
transport, or running industrial gauge. The only way to quantify the monitoring and targeting (M&T).
equipment or household devices. As a use of electricity and natural gas is by
monitoring consumption data. M&T is based on the fundamental
consumable resource, energy should
principle that ‘you cannot manage
be managed in a similar way to other
what you do not measure’. It is the
resources, such as office supplies or Effective procurement strategy
first crucial step towards improving an Time of day
raw materials for manufacturing. Managing energy is inextricably linked
organisation’s energy performance.
However, there are two unique with managing an organisation’s Friday
challenges when it comes to treating assets, facilities, processes and M&T aims to identify opportunities to
energy as a consumable resource. transport activities. Procuring new save energy. Monitoring is the process The business is closed on weekends – what is using this energy?
energy efficient products and services of establishing existing patterns of
1. Identifying and managing risk:
that operate as well as or better than energy use and identifying drivers and
The influence of geopolitical and
existing ones can reduce energy use variables of those patterns. Targeting
market risk on the energy system is
and maintenance and replacement refers to the identification of the

Energy use
significant, and as a result prices are
costs. desirable level of energy use.
volatile. Organisations must have a
sound understanding of their current Successful monitoring allows energy
and future energy needs in order for use to be correlated with driving
their purchasing to be cost-effective. factors such as weather, units of
Various factors add to the complexity production and behaviour. As a result, Time of day
such as politics, regulations, and areas of excessive and avoidable
weather conditions. energy consumption can be identified. Saturday

Figure 2 shows instances of potential

waste identified through monitoring Figure 2: Instances of potential energy savings
of detailed energy consumption data.
8     Energy essentials | Energy management Energy essentials | Energy management     9

2 Why manage energy?

Reducing energy costs

and minimising risks
One of the main reasons for Increased energy efficiency can reduce financial position of the organisation.
There are a range of drivers businesses to manage their energy the amount of energy an organisation Energy management can also help
that motivate organisations to consumption is the financial benefit, uses as well as the associated energy organisations be more adaptable and
manage their energy use. Efficient including reduced exposure to price- costs. This can have a major impact resilient to change.
use of energy helps to maintain related risks. According to the US on competitive pricing of products
competitive advantage and opens Energy Information Administration and services, and thereby the
up many other opportunities. (EIA), real end-use prices of electricity
The majority fall into one of the and fossil fuels (natural gas, oil
following categories: products, coal) in the United States
have become increasingly volatile in 2010 = 100 United States
• reducing energy costs and
the past 20 years (see Figure 3 below). 220
minimising risks
Similar trends have been experienced
• complying with policies and in other regions over this time period,
regulatory frameworks including Europe.
• improving organisational Security of energy supply has risen 140
Natural Gas
effectiveness, and to the top of the political agenda in
many countries. In order to mitigate Electricity
• improving corporate social 100
energy price risks and increase
security of supply, many countries Regular Petrol
have prioritised minimising demand 60
through increased energy efficiency as Diesel Fuel
well as diversifying their energy supply




At the business level, energy
management provides many
Figure 3: Indices of energy end-use prices since 1995 (Source: EIA November 2015 Monthly
opportunities for organisations to Energy Review)
minimise their exposure to these risks.
10     Energy essentials | Energy management Energy essentials | Energy management     11

Complying Scheme (ESOS), an energy efficiency Improving Reducing unnecessary use of Improving corporate
with policies organisational social responsibility
assessment and energy savings International energy standards equipment or machinery can save
identification scheme. International energy standards energy. It can also improve overall
and regulatory At the national level, many countries
have been developed to help effectiveness safety in an industrial unit or office
Putting in place a system to manage
organisations improve their building, through reducing time
have introduced their own energy energy use can be an aspect of
energy performance, comply with Efficient use of energy can be a spent in hazardous environments
management-related legislation: an organisation’s corporate social
legislative requirements and take commercially valuable objective in or reducing the risk of equipment
The need for a worldwide responsibility initiative. It is an
• China’s Top-10,000 Programme advantage of financial incentives. itself, helping an organisation reduce damage.
transition to a low carbon and more opportunity for an organisation
affected approximately 17,000 Examples include ISO 50001 energy costs and exposure to price
energy efficient economy has led Continual assessments of energy to demonstrate good practice to
of the country’s organisations; ‘Energy Management Systems volatility. It can also have positive
to the introduction of a wide range intensive processes and equipment both customers and shareholders.
from large industrial and – Requirements with guidance implications for other non-energy
of energy policies and regulatory can also reduce the frequency of Successful energy management can
transportation organisations to for use’, an internationally aspects of business operations, such
frameworks. These apply at all maintenance and help to extend the benefit the wider reputation of an
public buildings. The programme recognised standard for good as productivity levels, health and
scales, from city-wide initiatives to operational lifetime of equipment organisation, raise its profile and help
has set mandatory national targets energy management practice, safety, and equipment performance.
regional frameworks and international and machinery. For example, ensuring the organisation gain a competitive
for energy use and carbon dioxide and ISO 50002 ‘Energy Audits – By identifying energy-inefficient
agreements. that building heating, ventilation advantage in the market.
emissions. To meet these targets, Requirements with guidance for practices and equipment, and
and cooling (HVAC) systems are
An example of an international- participants were required to use’, which sets good practice making adjustments accordingly, a
commissioned and controlled
level policy is the European Union’s implement various measures, methods for carrying out business can improve its operational
appropriately, so they work in concert
Energy Efficiency Directive (EU EED). including setting up energy energy audits. effectiveness, process productivity,
instead of struggle against one
Under the Directive, all 28 Member management systems, reporting and overall competitiveness.
Implementing these standards another, may extend the lifetime
States are required to use energy energy consumption data and
helps organisations follow industry Improvements in energy efficiency can of HVAC machinery by reducing
more efficiently at every stage of carrying out audits.
good practice and presents an result in a more productive working unnecessary use.
the energy chain, from generation
• The UK’s Climate Change Act opportunity for organisations to environment and improved staff
to distribution to final consumption.
2008 established the world’s first lead on the future development morale and comfort. For instance, a
This directive applies not only at
legally binding target for reducing of new standards. Implementation review of office building lighting can
the Member State scale, but also
greenhouse gas emissions (80% also sends a proactive corporate reduce energy consumption whilst
indirectly to individual organisations.
reduction by 2050 compared message to customers and the also improving light quality. This leads
Under Article 8 of the Directive, there
to 1990 levels). To reach this supply chain. to better working conditions, which
is a mandatory requirement for large
target, the UK will pursue many can increase employee productivity.
private sector organisations of each For more on standards, see p14
decarbonisation routes, including
EU Member State to conduct energy
encouraging organisations to
audits at regular intervals. In the UK,
invest in low carbon technologies
this has been implemented through
and reduce their energy demand.
the Energy Savings Opportunity
12     Energy essentials | Energy management Energy essentials | Energy management     13

3 How to manage energy

The business case an energy manager or procuring and Implementing

energy management
installing additional energy meters.
The introduction of effective energy At this early stage, case studies from
management within an organisation is similar organisations can be used
Managing energy in a systematic,
an important step towards improving to build an initial business case,
Energy managers serve as structured manner is an on-going
overall performance. For many which will be crucial for gaining
focal points for energy related process; once the commitment has
organisations, formalising this process commitment at all levels.
activities and strategies within an been made, an organisation can
can represent a significant cultural
organisation. They may operate This chapter describes the key steps follow a step-by-step process that
alone or as part of a team. This for managing energy. It highlights forms a continual cycle of assessment
section highlights important The size of an energy management the importance of making a strong and improvement.
considerations for an energy team varies depending on the size of business case and engaging with
This process may be informal,
manager. an organisation and the activities it stakeholders at all levels: senior
following logical steps for continuous
undertakes. It can range from a single management, staff members and
improvement without necessarily
part-time role to a team of dedicated external business partners.
adhering to a particular standard.
staff, or contracted service companies
Conversely, an energy management
and consultants. For energy
system (EnMS) based on a formal
management to be successfully
standard can be adopted.
implemented, collaboration
between departments and collective Whichever route is chosen, a common
responsibility across the whole recommended structure for this
organisation should be encouraged. process is Plan-Do-Check-Act. This
structure is the backbone of many
The mandate to manage energy can
energy and other management
originate from senior management,
practices, and repeating this cycle
but in cases where it is driven by
should drive continuous improvement.
other employees, senior management
support and buy-in should be
sought. Initially, this might take the
form of a commitment to improve
energy practice and begin the
process of examining organisational
energy use. However, to enable a
3.6 ACT
detailed examination of energy use
as described in this chapter, some
organisations may also need to
approve initial expenses such as hiring
14     Energy essentials | Energy management Energy essentials | Energy management     15

Energy management standards improvement to ensure that energy Various standards on how to
Since 2000, several national and savings are achieved and maintained. conduct energy audits have also D
international standards have been In addition to this, the main benefits been developed. Examples of these


developed for use by energy of the standard are that it: standards are ISO 50002 – Energy Continual improvement Energy policy
managers to provide support and Audits and BS EN 16247 – covering
• sets out the process of measuring

guidance for implementing an the general requirements and process EC
and verifying (M&V) the energy A K
EnMS. This standardisation process of undertaking energy audits in
performance of an organisation. Energy planning
culminated in the development of ISO buildings, industrial processes and
50001:2011 – Energy Management • can be used from large the transport sector. These standards Management
Systems standard. ISO 50001 organisations to small and define the attributes, common review
supersedes many of the earlier medium sized enterprises features and methodologies, as Implementation
national and European standards (SMEs) across a broad range well as the deliverables of good and operation
and, having been developed by of commercial, industrial and quality audits.
professionals from more than 60 public sectors.
ISO standards are reviewed and
countries, is considered to be the
• enables energy management best updated at regular intervals to
benchmark standard for energy
practices to be introduced into ensure that they adequately reflect
management worldwide. It is Monitoring, measurement
business operations. industry’s latest developments and and analysis
highly compatible with other well-
known international management • increases transparency and
requirements. To stay up to date Checking
with good practice, organisations Nonconformities,
system standards such as those effective communication on the corrective and
should always use the latest available
for Environmental Management management of energy resources. preventative action
Systems (ISO 14001:2015) and
• encourages the adoption of
Quality Management Systems (ISO The following sections give an
energy efficiency measures across
9001:2015). interpretation of the Plan-Do-Check- Internal audit
an organisation’s supply chain. of the EnMs
Act structure and process as applied
ISO 50001 was developed to ensure
• ensures that everyone in an to energy management.
consistency and validity of energy
the organisation will be involved
performance worldwide, and as a
in the process.
result, has raised the professional Figure 4: Significant steps for implementing ISO 50001 Energy Management System Model – (BSI)
status of energy management. It has • takes into account any external
been implemented by a wide range of financial incentives (tax benefits,
organisations around the world and enhanced capital allowances, etc).
establishes a holistic and structured
Whilst not a requirement, the
approach to improving energy
implementation of ISO 50001 can
performance. This standard uses the
be certified through a 3rd party
3.6 ACT

process of continuous assessment and

certification body.
16     Energy essentials | Energy management Energy essentials | Energy management     17

Energy planning process “It is largely recognised that whilst

20% of office staff tend to feel
too hot, 10% will always feel
Planning inputs Energy review Planning outputs
too cold with 70% generally
Past and present
being ‘about right’. Without a
A Analyse energy use • Energy baseline
energy use and consumption corporately agreed Energy Policy
• Energy performance
setting out formally what the
Relevant variables Indicators
band for the company heating
affecting significant • Targets and objectives
energy use
B Identify areas of
and cooling should sit within,
significant energy use
• Energy strategy Facilities Managers will inevitably
and consumption
Energy performance The basics of these steps are the current level of an organisation’s be left with no option but to
described here. More detailed energy consumption. respond to the whims of those
The planning stage of the energy C Identify opportunities explanation is given in the Data at the extremes of the group
for improving energy Energy baselines can be established at
management process has two main analysis section, below. rather than, more sensibly, fixing
performance various levels:
aims. The first is to better understand temperatures for the largely silent
Energy review
an organisation’s energy use. The • whole organisation majority… and recommend
The energy review should give a
second is to form a plan that uses Figure 5: ISO 50001 – Energy planning process – (BSI) short sleeved shirts for the
breakdown of energy use within an • a building or industrial site
this knowledge to improve energy former and fleeces for the
organisation through the analysis of
performance. The basic steps included • a process or piece of equipment latter.”
past and present energy consumption
in the planning stage are illustrated in (in order to determine energy
data. A successful energy review Chartered Energy Manager
Figure 5. savings)
should lead to the:
The first time through this process, • an individual energy efficiency
• identification of energy
an energy manager may choose opportunity.
consumption patterns, including
to simplify the planning stage. It
peak consumption periods An energy baseline can be used to:
is important to remember that the Energy policy Monitoring and targeting
performance between internal
energy management process is An organisation’s energy policy serves The process of M&T is a • correlation of energy consumption • identify and help understand the
operations or with other organisations
cyclical, and more in-depth planning as a reference document for the fundamental part of energy to its driving factors reasons for fluctuations in energy
(for example those with buildings
can be carried out in subsequent implementation of an EnMS, and management. It enables consumption
• identification of the most energy of similar size or carrying out similar
iterations of the process. contains the organisation’s high-level organisations to develop an
intensive areas and/or processes • identify energy performance processes). Benchmarks can also help
mission statements regarding energy. in-depth understanding of their
To begin to improve an organisation’s indicators (EnPIs – described to set appropriate future targets.
It should be a concise document energy use, identify their areas of • forecasting of future energy
energy performance, certain below)
tailored to an organisation’s size and significant energy consumption, consumption Energy Performance Indicators
parameters need to be measured or
the nature of its business. The energy and establish targets for efficiency • estimate energy savings achieved Energy Performance Indicators (EnPIs)
estimated. These parameters feed • identification and prioritisation
policy acts as the guiding document improvement. through the implementation of are essential for monitoring and
into an energy review, the outputs of cost-effective energy savings
for managing energy. an EnMS. measuring energy performance. They
of which should include energy By monitoring the normal pattern of opportunities.
are metrics by which an organisation
management targets and objectives. The energy policy should use the energy consumption, effective M&T
An effective baseline should cover can relate its energy requirements to
These can influence the organisation’s information gathered in other phases can also alert an organisation to any Also, it can be used to establish an
energy use over a representative the various driving factors that have
energy performance objectives as well of the planning stage to outline irregularities in energy consumption organisation’s energy baseline.
period of time (e.g. over a year) and an impact on that consumption.
as its strategic business planning. the organisation’s current energy that may occur.
Energy baseline take into account all major variables
performance, future targets and the The use of an EnPI will provide
Monitoring can be broken down The energy baseline is the initial that might affect a process or piece
processes required to achieve these a straightforward quantitative
into several steps, including reference point to which future of equipment such as its age and
targets. The policy should be regularly relationship between energy
performing an energy review, energy consumption data can be maintenance status.
3.6 ACT

adjusted to reflect any progress consumption and one of its driving

establishing an energy baseline, compared. It uses the data collected
made in an organisation’s energy Similarly, a benchmark enables factors.
and calculating Energy Performance during the energy review to establish
performance. energy managers to compare energy
Indicators (EnPIs).
18     Energy essentials | Energy management Energy essentials | Energy management     19

Most UK companies have energy bills that are

around 5% of total organisation costs. However,
many companies are primarily concerned with
maintaining output, turnover and profit, even
though energy is one of the most controllable costs.

They are defined as the energy plan. It describes the various actions It is vital that the organisation’s senior Making a business case • Which energy saving measures The identification of all the pertinent
consumption per unit of an activity required to meet the objectives and management team stays informed To convince senior managers of the should be prioritised? risks is an essential element of
metric. targets set out in the energy policy. of current and proposed energy- merits of energy management, a a credible business case. Senior
• What will the benefits be?
related policy developments, and that robust business case must be made. managers will want to understand
EnPI = energy consumption / A range of stakeholders (such as
the most up-to-date legislation and This can be based on the energy • What are the projected energy the factors that may have a negative
activity metric (driving factor) energy managers, senior management
developments are incorporated into strategy, and should include elements savings (preferably expressed in impact on the implementation of
team members, various line managers
Examples of factors that influence the EnMS. Adherence to regulation such as the potential energy saving monetary terms)? a project and that could also affect
and financial managers) will need
energy consumption include a process should be factored into both the measures and investments identified other aspects of the business. Three
to collaborate on the document, • How much will it cost to
output, outside air temperature, time, energy policy and the EnMS as a through monitoring and targeting, of the most significant risks while
explaining the procedures, resources implement?
staffing and occupancy levels, and whole. as well as the possible routes to
and tools required.
building characteristics. implementation. Additional emphasis • What is the payback period?
The key components of the energy should be given to the opportunities Financial appraisal tools
Targets and objectives • What are the associated risks?
strategy include: for continual cost savings as operating
Organisational energy objectives and Depending on the size of the
costs are reduced, which could benefit • What is the timetable?
targets are determined by the data • setting clear roles and organisation and the scale of the
the business’ bottom line. A good
collected through monitoring. The responsibilities for those involved • What other resources, such as required investments, the financial
understanding of the organisation’s
objectives should be detailed, in the energy management people or equipment, may need appraisal of any of the identified
objectives is useful to demonstrate
qualitative, and describe the goals for process Getting senior management to be allocated by the senior projects could vary from simple
the positive contribution energy
organisational energy use. These support management team? payback period (SPP) calculations
• prioritising action items and management can make in meeting
should be included in the energy Senior management support is crucial to the use of more advanced and
measures those objectives.
policy document. Energy targets for successful energy management. Successful case studies of other complex financial tools such as
should be specific, quantifiable • setting specific timetables It demonstrates that energy The proposal needs to be clear, similar organisations can be a discounted cash flow (DCF)
representations of the organisation’s management is considered to be a comprehensive and written in a way good source for potential energy techniques, which include net
• specifying the processes for
energy objectives. Timetables for the key priority within an organisation. that is suited to the target audience. saving opportunity ideas, including present value (NPV) and internal
procuring energy and equipment
achievement of these targets and Support is one of the major drivers for For non-energy management experts, associated benefits and costs. rate of return (IRR). Life Cycle
objectives must also be determined. • specifying the processes for making energy performance change the business case should be presented Contacting independent consultants Cost Analysis (LCCA) is especially
releasing funds and resources for last. Strong leadership from board- in concise and simple terms. Headline or Energy Services Companies recommended for capital intensive
energy efficiency projects level directors and senior managers proposals should also be backed up (ESCos) may provide initial valuable projects. LCCA takes into account
can motivate all employees to be by a more comprehensive document information on potential energy the costs and, in particular, the
• promoting behavioural change
actively involved in the process and describing the technical and financial saving measures and ways to finance benefits that may occur over the
activities and encouraging staff
understand the role they play within details of the project or initiative. them. whole lifetime of a project. It is
members to participate in energy
it. Additionally, senior management a more reliable and complete
management training courses, A convincing business case should Potential low (or even no) cost energy
support allows for substantial, method than SPP to evaluate
Energy strategy and give a satisfactory answer to each of saving opportunities identified by
company-wide changes to be whether an investment will be
3.6 ACT

A formalised energy strategy is the following fundamental questions: the initial energy review and strategy
• taking into account any implemented through the approval of financially profitable over the long
based on the information collected can make the business case more
mandatory policies and financial resource use (for example: funding, • Why is energy management useful term.
through the monitoring and targeting appealing to senior managers.
incentives. employees, facilities). and important?
process, and is recorded as an action
20     Energy essentials | Energy management Energy essentials | Energy management     21

implementing an energy management to incur taxation and other financial Do Each of the objectives set will procurement strategy, an energy when market prices are relatively low
project can often be: reductions before the net profit is naturally be reached at a different manager should adopt a method for or expected to substantially increase
realised. Each component of the planning time. Having a combination of estimating the future cost-savings in the near future (known as forwards
• exceeding the proposed budget
stage is used to develop an in-depth short- and long-term goals will help needed to justify investments. or futures).
It can be useful to establish
• reduced production output or understanding of an organisation’s staff stay motivated and committed. Calculating Simple Payback Periods
appropriate comparisons to illustrate Demand response programmes can
services capacity due to pausing energy consumption. These Putting some ‘quick wins’ in place (SPP) and Life Cycle Cost Analysis
potential energy savings. For instance, also reduce energy costs and mitigate
operations for a longer period components set the groundwork for can help the EnMS gain momentum (LCCA) are two of the most common
if an organisation has a £1m annual risks. The term ‘demand response’
than initially planned implementing measures designed to and encourage more people to get methods.
energy bill and saved 20%, that refers to various mechanisms for
reduce energy consumption. The ‘Do’ involved.
• expected benefits not being represents £200,000 per year. One Preventative maintenance of existing energy users to reduce their electricity
stage of the EnMS process includes:
realised due to the underlying question to consider is the extra Actions can be divided into three energy intensive equipment, such consumption during periods of high,
energy use not being properly turnover the company would need to • making changes to processes and categories: as air handling units or boilers or peak, energy demand or transfer
understood from the outset. generate a profit of £200,000. For a behaviours can improve equipment lifespan, some consumption to off-peak times.
• Low- or no-cost – these quick
company making a 5% margin, £4m reliability, and energy efficiency. By These programmes and related
• the procurement of energy wins include switching off lights
The biggest hurdle to justifying energy of extra turnover would be needed. understanding the energy use of financial incentives, for example lower
services and products, and when not in use, or identifying
efficiency within an organisation is energy-intensive assets, an energy electricity prices during non-peak
The main outcome of a successful poor performance of plant and
that in most cases, energy projects • the installation of new equipment manager can identify opportunities to demand hours, help to ensure the
business case should be the allocation equipment. These could be
do not increase revenues or generate specified in the planning stage. increase efficiency or upgrade those electricity network can cope with high
of all necessary resources: funds, staff, identified by an initial energy
direct income, but instead reduce assets. demand.
3.4.1 Ensuring staff engagement

facilities etc. Ideally, a ring-fenced survey carried out across an

energy bills and lengthen asset life. This stage involves a collective effort
investment budget will be created organisation. For example, LED lighting has
Many organisations do not record from all individuals in the organisation
for the implementation of energy considerably lower maintenance costs
the amount of money that has been to achieve the targets and objectives • Medium-cost – these require
management projects. than conventional lighting, due in part
saved due to investing in energy laid out in the planning stage and minimal cost and little design
to a longer useful lifetime. However,
efficiency, and board members and stated in the energy policy and input, for instance replacing
a lighting upgrade must be evaluated
financial directors may be more strategy documents. Awareness incandescent or old fluorescent
based on the current system costs
accustomed to evaluating projects and competence are important, so lamps with newer higher-
compared to the costs of installation, Ensuring staff engagement
that have direct financial benefits. this stage may involve setting up efficiency lamps.
operation and maintenance of the Although technology plays an
It is therefore important to be able training courses for staff members,
• High-cost – these require a large proposed new system. important role in managing energy
to estimate (in financial terms) organising awareness campaigns and
amount of investment and design and reducing consumption,
the difference between energy encouraging discussions within the When it comes to purchasing
input, for instance a new boiler. fundamentally it is people and
consumption costs before and workplace. It also requires developing or procuring energy, various risk
their behaviours that drive energy
after the implementation of energy or using existing effective internal management techniques are available,
Aspects such as operational costs and demand. As such, effective energy
management projects. communication channels in order such as direct agreements between a
the procurement of energy supply, management requires the continuous
to keep everyone informed of the utility provider and end-user (known
3.6 ACT

For many organisations, energy services and assets should be clearly support of an organisation’s
actions taken along with the current as Power Purchase Agreements or
savings represent direct bottom line monitored and reported so they can employees.
status and progress of the project. PPAs), or buying energy in advance,
profits, whereas the same amount inform decisions. When devising a
of investment in other areas is likely
22     Energy essentials | Energy management Energy essentials | Energy management     23

Getting staff members on board has Effective communication is a primary and many large enterprises have their Check results, the need to verify and prove Finally, the ‘Check’ stage includes
two main benefits: method for ensuring staff member own in-house courses (see Chapter 4). potential savings is a critical step testing for compliance with legal
engagement, and can help minimise In the ‘Check’ stage, actual in the process. A successful M&V requirements applicable to an
• It creates a common sense of
the barriers mentioned above. performance should be compared process will increase the credibility organisation’s energy use, and
purpose and encourages them to
Having communication channels with the energy policy targets and of energy management within the reporting the results to senior
take responsibility for solutions;
in place between departments objectives. This will determine organisation, and subsequently it management at regular intervals.
this can lead to more consistent
can make energy management whether or not the organisation is on may allow for future allocation of
and longer-lasting results.
initiatives more interesting and easier track with its energy management resources for implementing energy
• The staff members working to understand. Staff members are Buy-in from suppliers and goals and should also highlight any efficiency projects.
directly with specific operational more likely to be engaged when the partners processes and operations that need
The International Performance
areas are more likely to identify recommended energy saving actions Making energy management a core improvement.
Measurement and Verification
potential issues and opportunities are communicated at a more personal value in business-to-business contracts
This stage requires the assessment Protocol (IPMVP) is a widely adopted
in those areas. level, for instance equating energy can help reinforce key objectives and
of the whole management process framework used to promote good
savings to items with which they achieve better energy efficiency levels
to confirm the system is effective, practice in recording, estimating,
In some cases, processes can be identify. An open forum for ideas and through the entire lifecycle of a product
leading to continual improvement and documenting energy savings.
automated. Where this is not suggestions can also be useful for or service.
and delivering planned results. It It specifies various methods and
possible, engaging people to determining where and how energy
Those organisations that already involves regular monitoring, analysis techniques for determining savings
change entrenched energy habits savings could be focused.
effectively manage their energy should and assessment of the areas that of a wide range of projects, from
and behaviours can be challenging.
Staff engagement should follow a feel encouraged and empowered to have the biggest impact on energy industrial processes to new and
Resistance to change has a variety of
similar process to technical energy extend their knowledge to companies performance. These could include existing buildings. It also describes the
causes, some of which include:
management, prioritising those in their supply chain, business partners EnPIs, deviations between actual and fundamental principles that underpin
• lack of understanding of the need people with a significant impact on and customers, and also to make expected consumption and the levels the design of an M&V plan to
for change energy use. In this way, approaches energy efficiency a factor in tenders for of effectiveness of the action items produce verifiable savings reports, and
can be tailored to individual or group new business. implemented. ensures the results of these reports
• fear of not having the necessary
requirements, rather than being a will be real, accurate and complete.
skills/competencies Establishing energy efficiency as a key The key component of the ‘Check’
one-size-fits-all approach.
component of business relationships stage is Measurement and Verification The ‘Check’ stage also includes
• reluctance to change the status
Appointing employees that are can have an impact far beyond good (M&V). This refers to methods undertaking and communicating
considered reliable, knowledgeable practice. Procurement is often a major and tools designed to estimate an objective, impartial internal
• absence of the right motivations and influential as energy management element of an organisation’s capital the achieved energy savings in an assessment of the EnMS that confirms
or incentives ‘champions’ is one method of budgeting, and tendered contracts accurate, reliable and transparent the system is operating properly and
successfully engaging staff. To win can become a vehicle for specifying way. Over time, the amount of energy delivering the planned results.
• a lack communication or
‘hearts and minds’ to the energy energy efficiency in the products and saved and the value returned from
consultation, and Any errors and non-conformities,
3.6 ACT

management cause, training can also services purchased. Contractors may each investment can be calculated. To
both actual and potential, should
• not feeling involved in making help. Many associations offer online also recognise the benefits for their increase confidence in the ability of
be identified and addressed through
change happen. energy management training courses own organisation of increased energy energy efficiency projects to deliver
corrective and preventative actions.
specifically designed for employees efficiency.
3.6 ACT
24     Energy essentials | Energy management Energy essentials | Energy management     25

In depth: Monitoring and targeting output usually requires greater energy In the UK, the base temperature for

Energy review consumption. In the case of energy most buildings is 15.5°C, whereas
The first step in monitoring energy used for heating or cooling buildings, in the United States, it is 65°F

consumption is to perform an energy weather is usually considered the (approximately 18°C).
review. main driving factor.
Figure 6 depicts an example of the
The energy review should be Example: Degree days relationship between the levels of gas
evaluated at regular intervals and Building heating and cooling are consumption in a building and the
This section contains especially when significant changes often significant drivers of energy number of heating degree days.
a more detailed take place in an organisation’s use. ‘Heating degree days’ are used
Typically, the relationship between
Act explanation of concepts systems, processes and activities as a measure of cold weather over
fuel consumption for space heating
and techniques for (e.g. procuring new equipment). A a specific period of time. Equivalent
and heating degree days can be
formal energy audit can be a major indicators for hot weather are known
The final stage of the Plan-Do- to energy performance, but also for analysing energy data. represented by a straight line on an
supporting component of the energy as ‘cooling degree days’.
Check-Act cycle involves reviewing maintaining the improvements already x–y diagram. This line is referred to as
review. It can provide a detailed
the overall performance and the achieved. Degree days measure the difference the performance characteristic line or
assessment of how energy is used
results of the EnMS, and taking all between the outside temperature trendline.
and what the saving opportunities
the necessary actions to ensure the and a theoretical or desired static
are. The trendline allows the energy
system’s effectiveness and adequacy. indoor temperature (often referred
manager to calculate expected
Initially, energy consumption data to as the base temperature) that is
This is the stage where the energy consumption and compare it to actual
can be collected from utility bills and comfortable for carrying out everyday
management loop closes. All lessons energy consumption. For instance,
manual meter readings. To develop activities without the need for heating
learned through the previous steps given the consumption data plotted
a more detailed understanding of or cooling. Thus in the context of
should be fed back into the process in Figure 6, for 100 heating degree
energy use, more frequently collected, heating, if the outside temperature is
and proactively incorporated into new days expected gas consumption is
or granular, data is needed. Current higher than the base temperature, the
projects and initiatives. about 520,000 kWh. In this example
smart metering technologies allow for heating system should not need to be
when space heating is not needed (0
There will be cases where significant real-time monitoring and collection of turned on, and the heating degree
degree days), there is still an expected
input into the system will be energy consumption data; half-hourly days equal zero.
required (for instance, from senior or more frequent data is particularly
management) and particular actions useful.
will be needed to drive a step change
Sub-meters are a good option for
in the EnMS. The outcome of the 700,000
organisations that wish to gain a
‘Act’ step should include any top-
more in-depth understanding of the 600,000
line changes to the energy policy

Gas consumption (kWh)

most energy intensive areas they have
document, the key characteristics of 500,000
identified. Once installed, these allow
measuring an organisation’s energy
isolated monitoring of a specific area 400,000
performance (such as EnPIs) and the Expected
of energy use such as a staff room,
targets and objectives of the energy 300,000 Actual
kitchen, or even individual equipment
management process.
or appliances. 200,000

Importantly, the energy management

Analysis of the collected data should 100,000
process does not end at the Act stage.
aim to correlate energy use with
After the lessons learned have been 0
its driving factors. For instance, 0 20 40 60 80 100 120 140
fed back into the energy policy and
when examining energy use within Heating degree days
other documents, the cycle begins
an industrial process, the process
again with Planning. The cyclical
output is often the main driver for Figure 6: Example of the relationship between gas consumption and
nature of this process is important not heating degree days, with trendline
energy consumption; increased
only for making further improvements
26     Energy essentials | Energy management Energy essentials | Energy management     27

gas consumption of approximately CUSUM Analysis Figure 7 shows an example of how An upward trend in the CUSUM chart indicates
300,000 kWh; this would be driven A particularly effective M&T technique the actual energy consumption (red 700,000
consistent use of more energy than expected,
by demand unrelated to the outside for setting targets and detecting points) of a process correlates with 600,000 whereas a downward trend indicates less
temperature, such as water heating. irregularities in energy performance is expected consumption (blue line). energy use than expected. A horizontal trend

Gas Consumption (kWh)

cumulative sum, or CUSUM analysis. implies that there are no substantial differences
Building heating and cooling Secondly, the differences between
For the implementation of CUSUM 400,000 between the actual and the expected
represent just one example of energy actual and expected consumption
analysis, the differences between Expected consumption. An alteration in the slope of the
consumption that should be examined over the applicable time interval are 300,000
the actual and expected energy trendline implies that a change has taken place
during an energy review. All forms of calculated, as illustrated in Figure 8. 200,000
consumption must be estimated. in the performance of the monitored procedure.
energy use should be monitored; this
CUSUM analysis consists of three Thirdly, the cumulative sum of 100,000
can be accomplished using simple CUSUM charts are particularly useful for
steps: differences (commonly referred to
spreadsheets or more automated and 0
achieving continuous improvement in energy
as CUSUM chart) is calculated and 1 3 5 8 11 14 16 20 23 25 28 30 34 37 39 43 46 49
fully-featured energy management Firstly, the actual and the expected Week efficiency. As explained above, if a downward-
plotted as shown in Figure 9.
software. energy consumption are plotted on Figure 7: Relationship between actual and expected energy sloping trendline is consistently observed,
the same chart. The expected energy The trendline of a CUSUM chart consumption less energy is being used than expected for
Degree day correlations
consumption is calculated based on indicates whether the monitored the monitored activity. To ensure continuous
Heating is usually provided by gas,
the EnPIs of the process or area being procedure consumes more or less improvement in efficiency, this expected amount
therefore heating degree days
examined. energy than expected. 200,000 should be ratcheted down via new targets,
are usually correlated with an
150,000 resetting the expected energy consumption
organisation’s gas consumption.
(or EnPIs) to the current level of use. This
Cooling is normally provided by 100,000

Gas Consumption (kWh)

adjustment should level the slope of the CUSUM
electrical chillers, therefore cooling 50,000
Automatic monitoring and targeting (aM&T) line, until the efficiency of the monitored
degree days tend to be correlated 0

• automatically identify process is altered again.

with electricity consumption. Larger organisations or those -50,000

with more experience managing malfunctions in data collection M&T reporting

Many resources for calculating -100,000

energy can opt for automatic • automatically identify missing In order for the M&T process to be fully
heating and cooling degree days are -150,000
monitoring and targeting (aM&T) data. effective, an energy manager should create
available online. -200,000
systems. These systems are widely 1 3 5 8 11 14 16 20 23 25 28 30 34 37 39 43 46 49 energy consumption reports based on analysis of
Energy Performance Indicators used and benefit from modern M&T software products have a the collected data. These reports can vary from
As discussed in the example, heating integrated communication wide variety of useful features: simple visual representation of consumption
Figure 8: Differences from expected consumption
degree days are used as a metric systems. An aM&T system consists to more analytical reports that include the
• bill validation allows the user
for measuring energy consumed of meters, data logger devices correlation between consumption and driving
to examine whether supplier
for space heating. This relationship for capturing and storing energy factors. Reports should be tailored to the needs
invoices are in line with the
between the number of degree days metering data, and software for 200,000 of the target audience. For instance, reports
collected metering data
and energy used for space heating analysis. 150,000
addressed to senior management could contain
is an Energy Performance Indicators • system alerts highlight a synopsis of the most important findings,
A typical aM&T system is able to: 100,000

Gas Consumption (kWh)

(EnPI), and would be expressed in irregularities in energy whereas reports addressed to key end users are
units of energy per degree day. • automatically collect meter consumption likely to be more detailed or focused. If over-
A deviation from this relationship readings at regular intervals 0
consumption is detected, exception reports
• benchmarking functions
may indicate that something has (half hourly, daily, weekly) -50,000 can be created. Action can then be taken based
enable automatic
changed within the heating system, depending on the energy -100,000 on the findings presented in these reports.
comparisons of current
such as equipment maintenance, manager’s requirements
energy performance against -150,000
replacement, or malfunction, or
• transmit the collected data to established benchmarks . -200,000
human-driven change in use. Another 1 3 5 8 11 14 16 20 23 25 28 30 34 37 39 43 46 49
the aM&T software for further
3.6 ACT

example EnPI is the amount of energy
used per person in a building or other
context. Figure 9: Cumulative sum of differences
28     Energy essentials | Energy management Energy essentials | Energy management     29

4 Energy management
as a career
Who can be an Skills and Working knowledge of systems

energy manager? competencies

and processes are often vital to
understanding a large and complex
organisation’s energy use. For
Energy management is a diverse field Energy managers’ skills vary widely
example, understanding technical
Energy managers come from suitable for people from a range of depending on their organisation
issues would be necessary to carry out
a variety of backgrounds and backgrounds. It is multidisciplinary, and responsibilities, but these can
energy performance measurement
require both technical and involving elements of engineering, be grouped broadly as technical
and verification and assess the
managerial skills. There are management, accountancy, and managerial. Technical abilities
effectiveness of energy conservation
resources available to help get marketing, psychology and other are essential for those in roles with
started as an energy manager disciplines. direct responsibility for energy
and to continue professional management, as opposed to those
An energy manager may have
development throughout a career who are coordinating consultants or Managerial competencies and
direct responsibility for energy use,
in energy management. in-house teams who deal with the skills
modifying activities to improve energy
more technical aspects. Managerial Energy managers should be seen as
performance. In larger organisations,
skills are indispensable for any energy leaders and collaborators within their
the energy manager has a more
manager. organisations, setting the energy
indirect, advisory capacity: identifying
agenda, getting buy-in at all levels,
the actions or investments that could
and identifying and managing those
improve energy efficiency or reduce Technical skills
who can influence energy use. An
demand, and informing the relevant A sound knowledge of both physics
energy manager’s people skills and
operational manager about them. and engineering principles is useful
ability to influence decisions are
for interpreting energy data as well as
The scope of the role is as important as specialist technical
for putting energy efficiency measures
commensurate with the scale and knowledge.
into practice. Ideally this skillset would
structure of an organisation. For
be supplemented by knowledge of Energy managers inform, engage, and
large, complex or energy intensive
mathematics and statistics to allow motivate others to share their interest
organisations, energy management
for a more in-depth understanding of and plans for energy efficiency
is a full time technical position
energy data. improvement. They must also
with an engineering focus. In
engage customers, colleagues, senior
smaller organisations, energy In practice, energy managers may
management and external service
management may be an additional need to consult specialists to resolve
providers, and involve them in the
or part-time responsibility given to questions regarding fields outside
process of energy management.
4 Energy management as a professional career path

someone in another role, such as their experience. These specialists

environmental management, logistics, could include internal employees Energy management requires an
facilities management, operations who work directly with the process understanding of financial processes.
management, or health, safety and in question, or may be external Energy managers must be able to
quality management. consultants.
4 Energy management as a professional career path
30     Energy essentials | Energy management Energy essentials | Energy management     31

eer path

assemble and manage budgets for of tasks and activities and provide Career path Continued professional Career support from the EI will learn how to effectively develop
energy efficiency schemes as well a structure for implementation, development The EI’s three-level energy energy saving projects, illustrate
as assess relative scheme benefits. reporting, and complying with Basic training and information As with any other profession, energy management training framework their return on investment to
Procurement of energy efficiency regulation and legislation. resources are available for those just managers should reflect upon supports professionals in developing management, evaluate and monitor
technologies as well as supply starting out in energy management or their learning needs and plan their their knowledge and skills at every financial savings, and understand and
contracts is a key area of energy those handling it alongside another professional development each stage of their career. Professionals can use a comprehensive set of energy
management that directly impacts job role. Good places to start are the year. This should not merely consist start at any level depending on their management technologies and
financial outcomes. Procurement numerous exhibitions and conferences of counting hours of accredited experience. principles.
considerations include return on in the energy demand sector, along CPD courses or other points-based
Level 1: A 5-day introductory course The EI, along with other engineering
investment for new equipment, with self-directed study such as approaches, but should focus on the
providing a comprehensive, practical and professional institutions, offers
market rates for electricity or gas, and reading articles or attending webinars. desired learning outcomes and areas
overview of the fundamentals of seminars at exhibitions, conferences,
the energy credentials of outsourced To transition into energy management for improvement. CPD can involve,
energy management. This course bespoke training events and branch
products and services in the supply from a non-technical field, there are but is not limited to, the following
provides the essential knowledge meetings along with assessed CPD
chain. a number of formal training avenues activities:
and skills needed to save energy, journal articles, many of which cover
at certificate and degree level. Some
In organisations with more • Attending events such as courses, reduce operational costs and carbon energy management or related
of these are listed in the Additional
sophisticated procurement strategies, conferences, seminars or lectures emissions, comply with legislation and themes.
information section.
energy managers may also need to meet an organisation’s environmental
• In-house training
understand market volatility and goals. Offered as a 5-day classroom
manage risks when purchasing Professional recognition • Self-directed private study – course or a 60-hour online course.
energy. They will need to clearly set Full time energy managers, or those reading articles
Level 2: A 15-module (200-hour)
out the potential impacts of such in energy-intensive organisations,
• Informal ‘on the job’ training online course that provides a
price volatility, providing a basis for often have a Bachelor’s or Master’s
comprehensive overview of the
strategic energy procurement. degree in an energy engineering • Distance and E-learning
essential technical theory of energy
discipline. They may demonstrate
A detailed understanding of • Secondment and special projects use, as well as in-depth understanding
their professional status and
an organisation’s operations is of the managerial and commercial
qualifications through membership of • Disseminating your own
fundamental to controlling energy aspects of an energy management
a professional engineering institution, knowledge, for example through
consumption. It will enable the energy role. This course can be started at
ment as a professional career path
or institutions that deal with written articles, presentations,
manager to prioritise available time any time and completed at your own
surveying, management and other blogs or social media.
and resource on the areas that have pace. Expert tutors are available to
disciplines. Additionally, they may
the most potential for efficiency answer any questions and provide
achieve Chartered Energy Manager
improvements within buildings, guidance as you work through the
or Chartered Energy Engineer status;
industrial processes, or staff activities course.
for those building a career in energy
and behaviours such as transport and
management, chartership can be a Level 3: A 12-day course designed as
business travel. Time management
rewarding way of demonstrating and a comprehensive technical overview
is essential to scope the multitude
maintaining professionalism. of energy management. Participants
32     Energy essentials | Energy management Energy essentials | Energy management     33

Further reading*

Additional information
Capturing the multiple benefits of energy Energy management in business, the International Performance Measurement
efficiency, International Energy Agency manager’s guide to maximising and and Verification Protocol, Concepts and
(IEA), 2014 sustaining energy reduction, Kit Oung, options for determining energy and
2013 water savings, Vol. 1, Efficiency Valuation
Climate Change Act, Committee on
Organization, 2012
Climate Change, 2008 Energy management in the built
environment, Energy Services and Making the business case for a carbon
Complying with the Energy Savings
Technology Association, 2012 reduction project, Carbon Trust, 2013
Opportunity Scheme, Environment
Agency, 2015 Energy management matrix, Carbon Monitoring and targeting, techniques to
Trust https://www.carbontrust.com/ help organisations control and manage
Energy audits, ISO 50002:2014 ED1,
resources/tools/energy-management-self- their energy use, Carbon Trust, 2012
British Standards Institution, 2014
Information and support for energy
Energy audits, BS EN 16247, Parts 1– 4,
Energy management systems, BS EN ISO savers, Vesma.com, 2015
British Standards Institution, 2014
50001:2011, British Standards Institution,
Win the energy challenge with ISO
Energy efficiency: a recipe for success, 2011
50001, International Organization for
World Energy Council, 2010
Energy Savings Opportunity Scheme, Standardization, 2011
Energy efficiency plan, European Environment Agency, 2014
World energy investment outlook,
Commission, 2011
EU Energy Efficiency Directive, European International Energy Agency, 2014
Energy efficiency, the definitive guide to Commission, 2012
the cheapest, cleanest, fastest source of
From shop floor to top floor: best
energy, Steven Fawkes, 2013
business practices in energy efficiency,
Energy-efficient product procurement – A William R Prindle ICF International for
guide to developing and implementing Pew Centre on Global Climate Change,
greenhouse gas reduction programs, US 2010
Environmental Protection Agency, 2011
How to implement energy management
Energy management, a comprehensive in small and medium-sized enterprises,
guide to controlling energy use, Carbon Dansk Standard, 2013
Trust, 2013
International energy outlook, US Energy
Energy management handbook, Wayne Information Administration, 2013
Turner and Steve Doty, 6th ed, 2007

*All of these documents can be accessed via the EI’s Energy Matrix at knowledge.energyinst.org
34     Energy essentials | Energy management Energy essentials | Energy management     35


Automatic monitoring and targeting opportunities to improve energy current position and establishing the cash flow in the future. This difference Career resources
(aM&T): products specifically designed efficiency. management framework. in values is due to the interest-earning
to measure, record and distribute energy potential of money, and can also take EI Energy Management training: www.energyinst.org/training/
Energy efficiency: the use of the Exception report: a document which
data, and analyse and report on energy into account inflation and other variables. energy-management-courses
minimum amount of energy while identifies that which is abnormal or not
maintaining a desired level of economic as forecast and requires attention or Simple payback period (SPP): the Register of Professional Energy Consultants, ESOS lead assessors:
CUSUM analysis: the difference between activity or service; the amount of useful explanation period of time, measured in years or efficiency.energyinst.org
the baseline (expected consumption) and output achieved per unit of energy input. operating hours, required to recover the
Internal rate of return (IRR): the Chartered Energy Manager: www.energyinst.org/membership/
the actual consumption of energy over a funds expended in an investment.
Energy management: the systematic discount rate at which the net present individual-membership/charteredenergymanager
period of time; provides a trendline and
approach to continuous improvement of value of costs equals the net present
shows variations in performance. EI Careers website: careers.energyinst.org
energy efficiency within an organisation. value of profits for a particular project or
Degree days (heating or cooling): investment. A valuation method used to
Energy performance: a measure of the
the difference between the outside estimate the profitability of an investment
EI accredited courses
energy efficiency or energy use of an
temperature and a static theoretical opportunity.
organisation, process, building, or other
indoor temperature (often referred to as
asset. Can include aspects such as shifting Life cycle cost analysis (LCCA): a tool
the base temperature) that is comfortable The EI accredits a range of university courses for those wishing
energy demand or using waste energy. to determine the most cost-effective
for carrying out everyday activities to further their knowledge of energy management and
option among different competing
without the need for heating or cooling. Energy performance indicators efficiency. For the most up-to date list of EI accredited courses,
alternatives to purchase, own, operate,
E.g., if the outside temperature is higher (EnPIs): metrics by which an organisation please visit: careers.energyinst.org/courses
maintain and, finally, dispose of an object
than the base temperature, the heating can relate its energy demand to the
or process.
system should not need to be turned on, various driving factors that have an
and the heating degree days equal zero. impact on that consumption. Measurement and verification (M&V):
the process of quantifying savings
Demand side response: a variety of Energy policy (of an organisation):
delivered through an energy saving
schemes where customers are financially a written statement of senior
action or measure; enables savings to be
incentivised to lower or shift their management’s commitment to managing
properly evaluated.
electricity use at peak times. This aims to energy. Often it forms part of a wider
manage load and voltage profiles on the corporate social responsibility (CSR) policy. Monitoring and targeting (M&T):
electricity network. For large organisations an energy policy the process of establishing the existing
should be no more than two pages long; pattern of energy use and its key drivers
Discounted cash flow (DCF): uses
a few paragraphs may be sufficient for and variables, and the identification of The information contained in this publication is provided for general information
future cash flow projections and
smaller organisations. the desirable level of energy use. purposes only. Whilst the EI and the contributors have applied reasonable care
discounts to arrive at a present value in developing this publication, no representations or warranties, express or
estimate of an investment opportunity. Energy strategy: a working document Net present value (NPV): the sum of implied, are made by the EI or any of the contributors concerning the applicability,
setting out how energy will be managed the values of incoming and outgoing suitability, accuracy or completeness of the information contained herein and
Energy audit: an inspection, survey the EI and the contributors accept no responsibility whatsoever for the use of
in an organisation. It should contain an cash flows, as valued at specified times.
and analysis of energy use within a this information. Neither the EI nor any of the contributors shall be liable in any
action plan of tasks, which will initially This takes into account the time value
building, process, or other energy way for any liability, loss, cost or damage incurred as a result of the receipt or use
involve understanding the organisation’s of money, where a cash flow today is of the information contained herein. Permission to reproduce extracts from ISO
system undertaken to identify areas of
worth a different amount from the same Standards is granted by BSI Standards Limited (BSI) on behalf of ISO. No other use
wasted energy and the corresponding of this material is permitted.
About Energy Essentials

Produced and published by the Energy Institute (EI),

the Energy Essentials series provides an accurate,
concise, accessible explanation for a variety of topical
energy sectors. The guides are intended to promote
understanding of energy topics among the general
public, and are suitable for students, professionals
whose work crosses over into the energy sector, or
anyone with an interest in energy.

Energy Essentials are designed to provide foundation-

level understanding with a scientific basis. Great
care has been taken to ensure that these works are
understandable by the lay person, and above all
unbiased and factually accurate.

Because of the constantly evolving nature of energy

technologies and markets, all data and information
is current as of the date of publishing. For latest
figures and supplemental resources, please access the
online version at knowledge.energyinst.org/energy-
management or contact the EI Knowledge Service at

The development of this guide has involved an

extensive review and analysis of relevant literature.
The document has been through a robust peer
review process, with contributions from over 60
subject specialists, including our Energy Management
Panel, consisting of professionally qualified Fellows
and Members of the EI with a broad range of
backgrounds and expertise. The information, suitable
for non-specialists, is presented in a format intended
to be accessible, neutral and based on sound science.

Finally, the document has been approved by the EI’s

Energy Advisory Panel (EAP). We intend the result to
be a high quality document that allows the reader to
understand the subject with scientific and technical
accuracy, in order to use that knowledge as a basis
for informed discussion.

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