An Energy Management System (EnMS) establishes an ongoing process of identifying, planning and implementing improvements in the way an organisation uses energy. A high-quality and comprehensive EnMS builds business value by acknowledging the importance of energy as an essential business input, and by establishing enduring processes to monitor and achieve best practice in the use of energy resources.
An effective EnMS provides a framework of practical processes and procedures to deliver on an organisation’s energy objectives. Key principles of a best-practice EnMS that are essential to establish and operate an effective system are outlined below.
In this section
- Leadership and responsibility – the role of senior management
- Develop an energy policy that includes energy performance
- Align the scope with existing processes
- Appoint an energy manager and an energy team
- Engage stakeholders
- Conduct energy efficiency assessments
- Communication and reporting
- Establish continuity and consistency in energy management
- Additional Energy Management System Resources
Leadership and responsibility – the role of senior management
The commitment of senior management is the foundation of an effective energy management system. Energy management should not be merely ‘tacked on’ to existing operations.
An organisation must have clear energy performance objectives and allocate sufficient resources to implement and manage the system if it is to succeed. Communicating the commitment of senior management and the resources that have been assigned establishes energy management as an important priority at all levels of the organisation.
Develop an energy policy that includes energy performance
Developing and adhering to an energy policy is important. It demonstrates that an organisation, including senior management, is committed to improving energy performance.
The policy can clarify what the energy management objectives of the organisation are and the timeframes within which they are expected to be achieved. It is often expressed as a concise statement that can be quickly and easily communicated throughout all levels of the organisation.
Typically, an energy policy would state how energy management aligns with the organisation’s broader improvement goals and sets out the target metric for improvement. For example, the energy policy may include a reduction in the amount of energy used per unit production, and a specified timeframe within which the goal should be achieved.
The energy policy may also address linkages between carbon emissions and energy use, and set out greenhouse gas reduction targets.
The energy policy should also explain how energy relates to broader sustainability objectives and policies of the organisation.
As with any business policy, the energy policy should be periodically updated and performance against the policy should be assessed on an ongoing basis.
Align the scope with existing processes
Each organisation is unique, and it is important that an EnMS is aligned with existing business priorities and systems. It should be a key component of an organisation’s continuous improvement efforts.
An EnMS can be implemented at different levels of an organisation, depending on the size and structure of the business. It can be developed for an entire organisation, a business unit, a facility, or even an individual process or functional group. For example, organisations that have a single management structure will typically implement a single top-level EnMS. Corporations with multiple business units that are each managed independently and have unique business systems often find it easier for each business unit to implement their own EnMS. The precedence set by other management systems, such as quality or environmental systems, can be used as a guide to determine where the EnMS should sit within the organisation.
An EnMS can include processes and procedures to ensure compliance with legal and contractual energy requirements, or can be adapted to integrate with existing compliance systems. Energy performance can also be incorporated into an organisation’s design and procurement practices for new products, facilities, equipment and processes. This could include how energy sources are identified and procured and how the energy performance of a supplier’s products is considered during the procurement process.
Another scoping consideration is the relevant time frame of the EnMS. Specifying time-bound objectives and activities of the EnMS over the short, medium or long term can affect many facets of the EnMS, such as resource allocation and decision-making criteria.
The PEW Centre’s, From Shop Floor to Top Floor: Best Business Practices in Energy Efficiency describes best practice in energy management using a set of international case studies. The findings in this report include the business case for energy management, the ‘7 habits of highly efficient companies’ and many examples of energy leadership throughout several organisations. This resource is particularly useful for organisations that are seeking to learn from companies that have already been successful in improving their energy efficiency. The examples presented are from large corporations. However, the reasons for undertaking improving energy management practices, and the results achieved, can be useful to large and small businesses alike.
Appoint an energy manager and an energy team
An energy manager is typically responsible for overseeing the development and implementation of the EnMS and acting as a conduit between senior management and the rest of the organisation.
Best practice in energy management requires the involvement of staff from many different areas and functional roles across the organization. This may include personnel with specific technical and operational knowledge, staff from financial, environmental and other departments, as well as senior managers with the authority to make significant business decisions. Forming an energy team facilitates participation and commitment, provides the energy manager with a resource base to draw upon, and ensures that all aspects of the business are taken into account during the formulation and evaluation of energy efficiency projects.
Depending on the size and circumstances of the organisation, other leadership roles or project teams may be required to execute different aspects of the EnMS. For example, energy assessments could be undertaken by corporate and site based teams. Negotiating energy contracts may require close collaboration between the procurement team, the energy manager and site based operational staff.
Implementing an EnMS can also reveal where additional training, skills development or resources, may be required to deliver on the objectives set out by senior management.
The U.S. EPA’s Teaming Up To Save Energy describes the likely barriers that may be encountered when establishing an energy management team and the engagement techniques to overcome them. The document includes checklists and many useful tips for those wanting to delegate responsibility for energy management, or by energy leaders aiming to build their own energy team.
The consultancy firm Energetics and the US Association of Energy Engineers have teamed up to offer a certified energy manager training program and certification exam for people seeking a broader understanding of the latest energy cost reduction techniques and strategies.
The EnMS can be used to build energy efficiency into the culture of the organisation, and empower employees to develop and implement new initiatives that improve energy performance.
Groups and individuals can significantly influence energy use through behavioural patterns and decision making processes. Importantly, raising awareness across the organisation and opening communication channels on energy management can encourage individuals to contribute new ideas that could further improve energy performance.
Conduct energy efficiency assessments
An energy management system will not improve energy performance on its own. Undertaking an energy efficiency assessment is the key activity in gaining a deeper understanding of how energy is used in the organisation, and where opportunities exist to improve energy performance.
An EnMS provides a structure for how the outcomes of the assessment can be evaluated by key decision makers including which energy efficiency projects should be pursued and how they should be implemented. This includes assigning responsibilities, allocating resources and outlining how cost effective opportunities can be implemented to achieve identified savings.
Based on lessons from the assessment process, companies can set more specific energy performance goals and identify and evaluate projects on an ongoing basis.
As part of the EnMS, energy efficiency assessments should be undertaken on a regular basis, and should allocate resources to the areas where the greatest energy performance improvements can be achieved.
Corporations that are registered participants of the Energy Efficiency Opportunities program, or other legislated energy efficiency programs, should refer to the relevant documentation for those programs. Links to that information can be found on the Programs page.
Communication and reporting
Frequent and high-quality communication practices are a key factor in the successful operation of an EnMS. Communication should permeate through all aspects of the EnMS and across all levels of the organisation.
Companies should be regularly tracking their energy performance against the company’s energy management objectives and evaluating how the outcomes of energy efficiency assessments and implemented energy efficiency projects are helping them to achieve those goals. Continuous and consistent reporting provides transparency and accountability, and helps to maintain the support of senior management and staff.
The EnMS should specify the communication channels that will be used to disseminate findings and outcomes. This includes establishing formal reporting procedures, adding energy as a standing agenda item at regular management meetings and establishing reporting templates which easily communicate key metrics to management and staff.
The use of Key Performance Indicators (KPIs) is a particularly useful tool for evaluating energy performance for a business, site, or specific process and communicating when potential problems are occurring which need to be addressed. Development of effective KPIs can also yield great insights into the key variables that effect energy efficiency.
Establish continuity and consistency in energy management
Like any business management system, perseverance and consistency are necessary to successfully operate an EnMS. This includes consistent implementation of action plans, regular monitoring of energy use and efficiency, evaluation of the performance of projects that have been investigated or implemented, and planning for future energy assessments.
A continuous feedback process should be used, promoting the flow of information on policies, plans, ideas, decisions and performance. To retain a high-level of staff engagement, all communications received from staff should be documented, acted upon, and followed up.
A systematic method should be established to collect and store all information pertaining to the EnMS incorporating the document control procedures of the organisation. This ensures accountability and transparency and allows for future evaluation and review.
The EnMS itself should be reviewed on a regular basis to improve the value it delivers to the business and its conformance with any applicable standards such as ISO 50001, which is a voluntary standard.
Additional Energy Management System Resources
- Energy Management Guide for Tenants 2012 (Opens in a new window)
This guide developed by National Australian Built Environment Rating System (NABERS) assists tenants in office buildings to manage their energy use. It provides practical advice for tenants in large and small offices, new fitouts and established tenancies on how to save energy, as well as where to go for professional advice and assistance.
- 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.
- Energy Smart Toolbox
It is easy to confuse the terms ‘energy management’, ‘energy efficiency’ and ‘energy conservation’. This series of fact sheets clarifies some of the key terms related to energy management with discussion of the associated benefits and issues. Additionally, the key elements of an effective energy management strategy are introduced. This resource will be helpful to those unfamiliar with basic energy management concepts. Clear and concise definitions can also help those writing an energy management related business proposal.
- EREP Toolkit Module 2: A Management Systems Approach to Resource Efficiency 2008 (Opens in a new window)
- Sustainability Victoria
- PDF 419 KB
One of the five modules of the EREP (Environment and Resource Efficiency Plan) toolkit, this guide provides detailed information and a framework for implementation of an energy management system. It also includes advice about preparing an energy management system, baseline data and benchmarking, Life Cycle Assessment, and other methodologies for evaluating broader environmental and energetic impacts. This resource can be used by organisations across multiple sectors; it is mainly aimed at medium to large scale organisations, but it will provide helpful advice to some smaller companies.
- Energy Star Guidelines for Energy Management Overview 2004 (Opens in a new window)
These guidelines provide an energy management strategy based on the practices of Energy Star program participants. The website includes a 7-step framework for an energy management system, including: making a commitment, assessing performance, setting goals, developing and implementing a plan, evaluating progress and recognising achievements. It also provides some other useful tools for developing an energy management system such as an energy program assessment matrix and a facility energy assessment matrix. These matrices can help evaluate existing energy management practices in an organisation. The Energy Star Guidelines are aimed at energy managers and are relevant across multiple sectors and organisation sizes.
- Energy Star: Facility Energy Management Assessment Matrix 2004 (Opens in a new window)
- U.S. Environmental Protection Agency
- Excel 127 KB
This document can be used as a checklist for evaluating existing energy management practices against the Energy Star Energy Management Guidelines. It can be adapted to suit the specific needs of an organisation and may serve as a useful status indicator as an EnMS is designed and implemented.
- Handbook: Step by step guidance for the implementation of energy management 2007
This program is designed to promote best practice and benchmarking in energy management. The handbook provides a framework for implementation of an energy management system, including both organisational and technical aspects. This resource is aimed at small-to-medium organisations and is relevant across multiple sectors.
- Making the Business Case for a Carbon Reduction Project 2009
Proponents of carbon reduction projects often encounter issues when attempting to have energy and carbon projects approved for implementation. This document asks questions that help the reader determine who makes the decisions in the organisation and how to engage with them. It discusses how to build a business case, including: considering finance and risk, competing for funds, and drafting and presenting business proposals. This resource would be particularly useful for people without experience in making proposals to key decision makers.
Note: The UK Carbon Trust website requires registration in order to download publications. Registration is free.
- Energy Action Planning 2011 (Opens in a new window)
This guide book is based on the principle that there are four ‘pillars’ of energy management. Detailed guidance on each of the pillars and the resources required to implement a successful energy management system are described in detail and will be useful for energy managers. The basic concepts discussed in this resource are relevant to all organisation scales while more detailed information is applicable for medium and large firms.