With the expectation of electricity prices doubling in the near future, it is easy to join the cause of saving energy or utilising renewable sources. I have watched discussions with great interest in the past few days since the 45% per annum (over three years) phased Eskom tariff application was ‘leaked’ to the press.
I am amazed at how glibly people can make statements without analysing alternatives at all. Even if Eskom tariffs double today, running a generator will still be four times more expensive than using Eskom power. To sustain being smart about our energy consumption, our successful Energy Smart Plan comprises four essential phases. The completion of each phase will avoid any ‘crash diets’ and ‘burnouts.’ Throughout the process, it is essential to be aware of what is happening around us (new solutions, new benchmarks, competitors, etc.).
Energy management project phases
- Definition: Defining the scope. It is essential to decide up front which parts of the operation and what sources of energy are to be included in the Energy Management Strategy. The quality of supply could also impact on overall efficiency, while you might want to consider substituting some of the energy consumption of fossil fuels with renewable energy as part of the Integrated Energy Management Strategy. Companies who apply Sustainability Reporting or who are ISO 14000 certified, might even want to formulate a Green Management Strategy which will include issues such as waste, recycling, water consumption.
- Detail Investigation & Terms of Reference (TOR). Once the Energy Smart Management Framework is in place, we can now choose which improvement options to investigate in detail. Thus, while starting with the highest ROI options, it can be ascertained that nothing is done in isolation.
- Concept Design. Often, improvement solutions are not available off-the-shelf. It can be compared to someone going for a custom designed diet to suit their individual needs. In designing the concept, highly trained engineers (electrical or systems) are employed to design solutions to fit specific operational requirements. Remember, all energy saving initiatives must support your business strategy and operational requirements.
- Implementation (Project Management). We all know the best diet and training plans are obsolete unless you enter a marathon (implementing your plan) to achieve set objectives.
Does this sound like common sense? Unfortunately, it is a fact that companies often develop excellent strategies only to fail miserably at implementing these properly. Research has shown ill-implemented strategies to be a major reason why even companies listed on the New York Stock Exchange fail. Prominent in all these failures is a lack of leadership driving the change required. Often, companies do not have the internal skill or capacity to drive Energy Management Strategies and it could definitely prove beneficial to use an external resource to ensure proper project management and oversight.
Baseline and benchmarking
Every night on TV the message, ‘Know your Status’ is repeatedly flighted. Being Energy Smart is not much different from the AIDS campaign plea; you need to know your Energy Smart Status. In the next issue, we discuss some practical examples of baseline auditing excersices (Smart Energy Health Check) to determine your Energy Health Status. We shall also pay close attention to benchmarking and how it can be used to develop an integrated Energy Smart Strategy.
By Carel Venter
Carel is a Business Strategist and Business Mentor at CSD.