The objective of an energy efficiency assessment is to build a greater understanding of how energy is used within a company and to identify ways to reduce costs through the more efficient use of energy.
It involves the comprehensive analysis of energy use within a process, facility, site or organisation and using that analysis to identify and evaluate ways to improve energy performance.
The level of analysis undertaken will determine the level of accuracy and number of opportunities found. A range of approaches based on certain key principles can be followed however. This can enable companies to increase the level of rigour and resources invested in assessments over time, as areas of potential and priority are identified.
In this section
- Essential components of a successful assessment
- Additional energy efficiency assessments resources
Essential components of a successful assessment
Energy management practices should be undertaken at a level that is appropriate to the size and resources of the business. This is also true for energy efficiency assessments. Organisations need to consider their size, energy expenditure, and available resources in planning an energy efficiency assessment.
The level of rigour that is applied to an assessment determines the extent of the insights and benefits that are gained. An initial scoping review of energy use across the organisation can identify the key energy-using areas that assessments should be focused on. Initial assessments could be used to identify the potential for savings within the business and secure resources for more detailed assessments.
A well-planned energy efficiency assessment in one area of an organisation can often be leveraged by using methodologies that can transfer the findings and outcomes to similar sites, technologies or processes.
Best practice energy efficiency assessments have several key components in common.
Planning and resources
To deliver value for the organisation, an energy efficiency assessment requires proper planning and resourcing, coupled with a communication strategy that engages with all relevant stakeholders. Planners may consider a progressive approach to conducting the assessments in particular areas of the business, with a plan to complete assessments of the whole business process over a period of time.
The project plan for an energy efficiency assessment should detail the objectives and scope of the assessment. This includes the activities that will be undertaken, the timing of the assessment, the key personnel involved, the financial and technical resources required, expected deliverables, as well as potential risks and the strategies to manage them. The plan should also outline actions to be taken post-assessment, including reporting on outcomes and timelines for tracking, reviewing and potentially undertaking future assessments. The assessment project plan often evolves as the project team is established.
The amount and cost of energy use for the organisation can be a guide as to the level of resources dedicated to the assessments.
People and skills
The value of an energy efficiency assessment can be dramatically increased by pro-actively engaging with stakeholders throughout the organisation and actively seeking their input into an energy efficiency assessment. The necessary skill sets may exist within disparate parts of an organisation, which reinforces the need to use a team-based and company-wide approach.
Ideas for energy efficiency improvements can often be found at all levels of the organisation from ‘shop floor’ operators through to corporate office. Relevant stakeholders also include the people who have influence over capital and operating budgets, people with the authority to make changes to processes and procedures, and people who have a role in implementing energy efficiency improvements.
Energy efficiency assessments should include not only those with energy and process expertise, but also people external to the process being assessed who can provide alternative perspectives and encourage different ideas. A ’cross-silo’ approach to the assessment is what often results in the most innovative opportunities being identified.
The document, Functional Skills for an Energy Efficiency Assessment, outlines the range of skills that are required to conduct rigorous effective energy efficiency assessments to the EEO Assessment Framework and highlights the importance of multi-disciplinary teams.
The U.S. Environmental Protection Agency’s Teaming up to save energy provides guidance on building an energy management team with descriptions of the likely barriers that may be encountered and engagement techniques to overcome them. The document includes checklists and many useful tips. It is applicable to multiple sectors and organisation sizes.
Using external resources
The capacity of organisations to undertake energy efficiency assessments will vary depending on the available resources and skills. Depending on factors such as an organisation’s energy expenditure, size and resource availability, it may be reasonable to create full-time positions that are completely dedicated to improving energy efficiency or deploying existing internal resources to particular assessment tasks. For other organisations it may make more sense to source external technical expertise. External experts can also provide specialist advice to fill skills or knowledge gaps.
There are a wide range of energy services companies that can support specific aspects of an assessment, including data collection, opportunity identification and analysis, facilitation, and reporting.
If external experts are required, it is of primary importance to ensure that the cost of the external expertise does not outweigh the benefits that could accrue if projects are successfully implemented.
Preparing a very clear scope of works helps to clarify the job, the expectations, and the input that is required to facilitate their work. The scope of works should contain the principles discussed in these pages to ensure that consultants perform thorough assessments. It also ensures accurate cost estimates can be obtained from different firms. The scope should also clearly outline how analysis and recommendations should be presented to enable findings to be incorporated into business cases. This includes any assumptions made in the estimation of project costs and energy savings.
Understanding energy use
Developing an understanding of energy use, and relating energy to core business activities, is a core element of the energy efficiency assessment process and can yield many insights into the relationship between energy and productivity.
Gathering new data typically begins with high-level data that is readily available.
Invoice data can be summarised based on the types of energy used and the processes or sites where the energy is used, expressed as a proportion of total energy use. This information is often available in existing financial or greenhouse gas accounting systems, or can be sourced from energy providers. Energy users can request that energy retailers provide more detailed metering data on which the invoices are based.
This type of high-level analysis of energy use can enable the company to prioritise and focus their time and resources on areas where the greatest energy improvements are likely to be found. However, information at this level is relatively vague as it represents the aggregated energy spend for an entire facility or business unit. To derive full value from the assessment process, a much deeper understanding of energy use is required.
An initial analysis of available data often uncovers data gaps where greater information is required, and identifies key energy-using areas or processes which should be prioritised for more detailed analysis.
Several technologies and techniques can be used to measure energy use within a facility or process. Temporary meters can be hired and used on a short-term basis, or permanent meters can be installed where appropriate. It is important to ensure that the measurement frequency and the time period over which the measurements are taken sufficiently capture a representative operational period. Intraday, daily, monthly or seasonal variations may need to be measured and taken into account.
The data set can then be augmented using other sources, such as automated control systems such as SCADA or PLC systems, and other instrumentation. Discussions with facility or process managers, accounting personnel, environmental reporting staff, and other people around the site can often uncover other data sources which can be incorporated in the energy analysis.
In addition to energy usage data, it is also important to collect detailed data on other variables such as production throughout, ambient temperature, process parameters, operating modes or profiles, and other business contextual data.
Combining energy data with other business data can also provide a deeper understanding of the relationship between energy use and other business variables. For example, the energy use per unit of production may differ at different production volumes. Changes in environmental conditions may impact energy use patterns. Other business contextual information such as organisational changes, growth projects, planned shutdowns, and other business plans could also have a significant impact on energy use and should be taken into account.
A rich collection of energy and business contextual data enables a comprehensive understanding of the factors that influence variations in energy use.
Analysis of energy data can first be used to calculate an energy baseline that establishes the relationship between energy use and business activity. In its most basic form, the energy baseline relates energy expenditure to business output over a specific time period. For example, a manufacturing plant may calculate the energy baseline from energy use data and production data for a given time period.
Analysis can yield many insights into the reasons for changes in energy consumption, efficiency and productivity. Graphs and statistics often raise questions which stimulate further investigation, resulting in a more in depth and accurate understanding of energy use and the opportunities that may exist within the organisation.
Different analysis techniques can produce different findings and insights. The correct selection and use of analysis techniques is critically important, because the information gathered and analysis undertaken will underpin the identification and evaluation of opportunities.
Common analysis techniques include:
- Graphs of energy use over time (seasonal, monthly, weekly, daily, hourly) – Understanding the reasons behind energy use patterns and changes in energy use in relation to business activities can often yield new insights.
- X-Y plots of energy use versus production or other parameters – This technique can reveal whether or not there are relationships between energy use and production. It can also highlight if any production thresholds exist where a dramatic change in energy use occurs.
- Benchmarking – Using energy performance indicators reveals whether a process, facility or business unit is operating at its optimum performance level. Benchmarking can be used to compare actual energy use with theoretical (calculated or simulated) energy use. Comparisons with other plants, sites, processes, shifts, operators, or other aspects, can be drawn.
- Pinch analysis – Pinch analysis is a design method based on graphical analysis that can be used to optimise the design of complex thermal systems so as to maximise heat recovery. For processes or plants with complex flows of hot and cold streams, pinch analysis can be used to evaluate whether there are further opportunities for better heating and cooling through the placement of heat exchangers at optimum locations within the process. This method requires engineering expertise.
- First principles (theoretical calculations) – A theoretical calculation of estimated energy use can be used to assess systems which cannot easily be measured. Theoretical models are less costly to interrogate than changing the actual system, allowing different scenarios to be explored through the manipulation of operating modes, variables and parameters.
- Energy mass balance – The practice of balancing the energy and materials flows within a site, facility, or individual equipment or machinery can provide a deep understanding of energy and material flow. This modelling can indicate where energy is exiting the process through heat or steam losses, and where opportunities to improve efficiency may exist.
This listing of analysis techniques is not exhaustive. There are many other engineering, logistical, and experimental methods that may be employed to develop a better understanding of energy use.
Identification of opportunities
The process of opportunity identification ideally uses the data which has been analysed to identify areas where energy saving opportunities may exist. Providing the results of this energy analysis to a broad range of people throughout the organisation can often result in further ideas and insights.
The importance of involving a cross-section of personnel to identify opportunities cannot be understated. Workshops are a common means of gathering the relevant experts to discuss the data and information gathered during the energy assessment and brainstorm potential ideas and opportunities. Further collaboration can be achieved through focus groups, site visits, staff suggestions, and consultation with suppliers or external experts.
All identified opportunities should be documented in a ‘register of opportunities’ or similar document. This often becomes an enduring record used to track ideas and outcomes, and revisit potential opportunities if operating conditions or energy prices change.
Detailed analysis of selected opportunities
The detailed investigation phase determines the feasibility of each opportunity, and provides decision-makers with the information they need to make a final investment decision. Further analysis is often required before a decision is made on what opportunities to implement. This may require investment in equipment to improve measurement accuracy or time spent collecting more data.
Businesses often have established practices for evaluating and seeking funds for new projects, such as project charters or templates. Energy efficiency opportunities that merit a more detailed analysis should use these existing processes.
A ‘whole of business’ approach which extends beyond cost and energy impacts to include strategic, labour, health & safety and other concerns, improves the understanding of the overall costs and benefits of energy efficiency opportunities. Project risks also need to be understood and addressed.
Other factors which may be considered in this analysis are:
- shutdowns or downtime required to implement the change
- changes in production output
- changes in other process inputs, such as water or raw materials
- changes in maintenance costs
- hardware changes that make spare parts inventories obsolete
- business plans or forecasts that affect the lifetime or throughput of the process that is being changed
- costs of training or new skills that might be required.
Comprehensive and detailed analysis builds confidence in the findings amongst the project team and senior management.
The Energy Efficiency Council (EEC) provides the Best Practice Guide to Measurement and Verification of Energy Savings, detailing measurement practices that can be employed to investigate energy use or verify the energy savings of a project that has been implemented.
Sustainability Victoria’s ‘Energy and Greenhouse Management Toolkit’ includes Module 6: Cost effective and feasibility analysis, which provides a framework for the financial evaluation of energy reduction initiatives and provides worked examples of evaluation techniques.
Business decisions and implementation
Existing business processes should be utilised where they exist to arrive at business decisions on energy efficiency opportunities. This helps integrate energy efficiency into the organisation as a regular business activity. If external experts are used to help conduct the energy efficiency assessment, their findings should be documented in a way that facilitates their integration with internal business case or project planning processes.
In some cases an individual manager may be able to review the information gathered during the detailed analysis and make a final decision. Larger projects often need to go through more specific approval processes at senior management level.
The quality of analysis and rigour of the energy efficiency assessment underpin the project proposal, and are instrumental in alleviating perceived risk. Regular communication to keep relevant site and/or corporate managers informed on potential opportunities as the assessment progresses is an effective means of managing expectations between the energy efficiency assessment team and key decision-makers.
Refer to the Business Case and Beyond section of the EEX website for a series of case studies profiling successful strategies employed by EEO companies to get their business cases approved.
The U.S. EPA’s Elevate energy management to senior managers is targeted at those responsible for energy management in medium to large organisations and who need advice on the motivations and language of senior managers. An understanding of how energy management aligns with senior management can help with achieving favourable business decisions.
Tracking and communication – Closing the loop
Opportunities that have been implemented as a result of the assessment process must be monitored over time to determine their effectiveness. Measurement and verification can yield further insights into energy use, track any issues or unintended consequences that have resulted from a change, and build internal knowledge and expertise in energy management.
Communicating the status and outcomes of an energy efficiency assessment to senior managers and the rest of the organisation confirms the outcomes of the assessment process and establishes a common understanding and basis for action. It also provides valuable lessons-learned and helps build senior management support for future energy management initiatives.
The EEO Energy Savings Measurement Guide also provides detailed guidance on rigorous energy measurement techniques, and further information on tracking assessment outcomes and reporting at different levels of the organisation can be found in the EEO Assessment Handbook (page 106).
Additional energy efficiency assessments resources
- Industry Perspectives from the 2012 EEO Workshops 2013 (Opens in a new window)
- Department of Resources, Energy & Tourism
- PDF 1.1 MB
The aim of this document is to share some of the key lessons discussed in the industry presentations at the 2012 Energy Efficiency Opportunities workshops. Lessons are organised under topics of: Planning for Energy Efficiency Improvement, Getting People Involved, Adopting a Progressive Aopproach to Data and Analysis, Getting Opportunities Implemented, and Accessing Support and Government Assistance.
- Energy Savings Measurement Guide 2013 (Opens in a new window)
This guide provides detailed and best practice guidance on how to estimate, measure, evaluate and track energy efficiency opportunities. It provides in depth information on capturing energy data, establishing an energy baseline, developing an energy mass balance, analysing potential energy efficiency opportunities and monitoring the performance of implemented energy efficiency initiatives. The resource was developed for large energy using organisations, but the tools can be applied across multiple sectors and organisation sizes.
- A Whole Systems Approach to Energy Efficiency in New and Existing Systems 2007 (Opens in a new window)
This document is part of an online textbook to educate engineers on the process of energy efficiency assessments entitled Energy Transformed: Sustainable Energy Solutions for Climate Change Mitigation. Lecture 1.4 of this textbook provides the reader with useful descriptions of the stages of the energy assessment, and techniques that can be employed throughout. This resource will be useful to personnel responsible for executing an energy assessment and is relevant to all organisation types.
- Energy and Greenhouse Management Toolkit 2008 (Opens in a new window)
Organised in a series of seven modules, this is a comprehensive guide on energy management. It also includes electronic tools such as an Energy Smart Tracker and a Green Power business guide. ‘Module 4: Developing an Energy Management System’ covers topics including: assessing existing energy use practices, allocating resources, assigning an energy manager and team, developing an energy management policy, auditing and monitoring energy use, and staff motivation. ‘Module 3: Calculating Energy Use and Greenhouse Emissions” covers topics including: using data derived from your energy bills, calculating emissions and consumption for existing and proposed items of equipment, methodologies for calculation of non-energy emissions and assessment of wider environmental impacts including an outline of ‘lifecycle assessment’ and ‘eco-footprint’ tools. This Toolkit is primarily aimed at medium to large organisations, but many of the ideas discussed can also be applied in smaller organisations.
- AS 3596-1992 Energy management programs – Guidelines for definition and analysis of energy and cost savings 1992
These guidelines are intended to advise the user on the financial and energy data requirements to develop a business case for energy saving proposals. The intent is to provide a framework which standardises the projections and forecasts which are used to evaluate energy projects. This can be used by all organisation types and is aimed at personnel responsible for developing energy efficiency business cases.
Note: There is a cost for downloading this resource
- A Best Practice Guide to Energy Performance Contracts 2000 (Opens in a new window)
This best practice guide from the Energy Efficiency Council provides an overview of energy performance contracting and guidance on whether EPCs are the most appropriate financing tool for your business, how to source an energy service company and put relevant contracts in place.
- AS/NZS 3598:2000 - Australian standard for energy auditing 2000
- Standards Australia / Standards New Zealand
This standard provides guidance and requirements for Level 1, 2 and 3 energy audits. The guidelines can be used to assist companies in undertaking energy audits internally, and in procuring energy auditing services. This standard is currently being reviewed and is subject to revision. It is aimed at personnel responsible for conducting and evaluating energy audits.
Note: There is a cost for downloading this resource.
- Guiding Principles for Successfully Implementing Industrial Energy Assessment Recommendations 2011 (Opens in a new window)
Drawing upon the advice of companies that have conducted successful energy assessments with tangible business outcomes, this document provides 11 “implementation principles” that aim to integrate project implementation into the energy assessment process. The document is designed to be used as an “at-a-glance” guidebook which can be quickly referenced as needed. A wide range of useful checklists, templates and scorecards are included as an appendix.
- Better Business Guide to Energy Saving 2010
This guide can help you to conduct an initial walk-through assessment of your organisation to see what sort of energy use practices are in place. It can be a good way to start gaining a better understanding of how energy is being used and could help to identify energy saving opportunities with little or no cost. It is a resource that is best applied at the facility level.
Note: Free registration is required to gain access to this document on the UK Carbon Trust web site.
- Saving Energy: Staff Awareness and Motivation 2009 (Opens in a new window)
This fact sheet suggests ways to involve staff in an energy management system and for the purpose of conducting energy efficiency assessments. It provides advice on: setting up an energy team, researching current attitudes and behaviors, planning, as well as implementation, evaluation and review and maintenance of an energy management system. It is aimed at personnel responsible for energy managers in a medium-to-large organisation.
- Saving Energy in Business: Involving Staff 2010 (Opens in a new window)
This fact sheet offers advice on how to keep employees interested in an energy efficiency program, with a strong focus on employee ownership of the program. This resource is briefer that the ‘Saving energy with people power’ resource, and is more suitable for small-to-medium organisations.
- Stanford Energy Lectures 2007
Lecture series (videos with PDF transcripts) consisting of five lectures where Amory Lovins discusses energy efficiency. Each video is approximately 1.5 hours long. The topics are buildings, industry, transportation, implementation and implications.
- Material and Energy Balance (Opens in a new window)
This publication provides an in-depth explanation of what a material (mass) and energy balance is, with guidance on how the technique can be applied in different industries and operational circumstances. While energy-mass balances can be used in organisations of all types and sizes, this resource is fairly technical and is designed for organisations that have committed to conducting an energy-mass balance.
- Basics of Energy and its Various Forms 2011 (Opens in a new window)
This brief document explains basic energy principles: definition of energy, forms of energy, electricity basics, heat and temperature, laws of thermodynamics, units and conversions. This resource is a useful introduction to the science of energy for personnel responsible for conducting energy assessments.
- Energy Monitoring and Targeting 2011 (Opens in a new window)
Discusses the benefits of continuous monitoring of energy use, how to analyse data and make subsequent decisions about energy use.