In today’s corporate landscape, energy management is often perceived as an uncontrollable aspect of business operations. This misconception leads to inefficient practices that overlook the potential for significant cost savings, improved operational efficiency, and reduced carbon emissions. This white paper makes the case that energy, when managed through the collection and sharing of relevant data across various departments, becomes not only controllable but also a critical lever for organizational success.

1. ‍The Misconception of Energy as Uncontrollable
   ‍Many clients operate under the belief that energy is an uncontrollable cost. This perception leads to a lack of proactive measures in energy management, directly affecting the ability to control carbon emissions. If energy is seen as an uncontrollable factor, then by extension, carbon emissions – tied closely to energy consumption – are also viewed as beyond control.
2. ‍Energy as a One-Time Project
   Energy management is often treated as a one-time project or a single transaction. For instance, companies may purchase energy once a year or invest in energy-efficient equipment (like lighting) as a sporadic measure to reduce consumption. This piecemeal approach fails to recognize that energy management is an ongoing process that requires continuous monitoring and adjustment.
3. ‍Departmental Silos
   ‍In many organizations, energy procurement is handled by the finance or procurement department, while energy consumption is managed by the engineering or maintenance department. These departments often work in silos, with little to no interaction, resulting in a disjointed approach to energy management. Without collaboration, opportunities for optimizing energy use and reducing costs are missed.
4. ‍Inadequate Data Collection and Sharing
   ‍A significant barrier to effective energy management is the failure to collect and share appropriate energy data across departments. When energy-related information is not disseminated properly, it becomes challenging to make informed decisions that could control energy use and costs.
5. ‍The Role of Energy Utilities
   ‍Energy utilities, often operating as monopolies, are not necessarily incentivized to help clients manage energy effectively. They are only accountable for distribution - approximately one-third of the utility bill cost, which leaves a substantial portion of energy management unaddressed by the providers. This gap further complicates the client's ability to manage energy proactively.
6. ‍Lack of Comprehensive Reporting
   There is a notable absence of a comprehensive reporting system that can be used across the company to manage energy effectively. Without such a system, it is difficult for organizations to track energy consumption, identify inefficiencies, and implement corrective actions.

The Opportunity in Energy Data

All clients receive monthly energy and utility bills containing significant information that, if properly understood and analyzed, can empower them to manage energy proactively. However, these bills are typically sent directly to the accounts payable department, where the only captured data points are total dollars and taxes. This limited data capture allows companies to track the cost of energy but not to assess actual performance in terms of consumption, associated carbon emissions and supplier efficiency.

The current status of Managing Energy Management

There is a sense of urgency in paying these bills on time, as many utilities impose a 5% penalty for late payments. Consequently, once paid, the bills are often filed away, rarely shared with other departments such as Operations, Procurement, Environmental/Sustainability, and Engineering. This lack of information flow hinders these departments from understanding their current status and actual performance in relation to energy pricing, use or carbon emission associated with each site.

The Knowledge Gap in Energy Literacy

A significant challenge in energy management is the general lack of energy literacy among different departments, including senior executives. Many individuals are not well-versed in their company's energy profile nor understand how to interpret utility bill information. This issue is rooted in a broader societal problem: energy management has not been a focus in academia. While engineering curricula may teach students how to calculate energy consumption, they do not address what drives energy futures or utility rate options. Similarly, finance and procurement professionals may understand energy market pricing (as a commodity) but lack a comprehensive understanding of their energy consumption and its impact on pricing.

A Proactive Approach to Energy Management

The equation for a monthly energy charge is simple: Energy Charge = Energy Consumption x Energy Price. However, both consumption and price are dynamic variables influenced by factors such as operational changes and weather conditions. Managing these variables requires a proactive approach that includes tracking, trending, projecting, and collectively managing energy data.

Departments need monthly access to this information, not only to perform their duties more effectively but also to collaborate on actions that benefit the entire corporation. A company that proactively manages energy will achieve measurable annual reductions in energy costs and see improvements in overall performance – including increased productivity, better communication, enhanced safety, reduced maintenance costs, minimized downtime, and decreased product waste.