ENERGY EFFICIENCY IN BUSINESS PLANNING ENERGY EFFICIENCY FACT SHEET

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1 ENERGY EFFICIENCY IN BUSINESS PLANNING ENERGY EFFICIENCY FACT SHEET as part of the Energy Efficiency Information Grants Program

2 Managing energy effectively within your business will decrease your energy costs, improve profitability, and reduce carbon emissions. Long-term energy savings can be achieved by implementing an energy management system. A focus on energy management as part of the core planning for your business will help you understand your energy use, decide which technologies, processes and practices to apply and measure improvements in performance over time. This guide will help you to understand the importance of managing energy use by establishing an Energy Management System. ESTABLISHING AN ENERGY MANAGEMENT SYSTEM Establishing an Energy Management System is the first and most important step in any approach to managing energy use. The five key elements to a successful Energy Management System and how they relate to each other are shown in Figure WHAT IS AN ENERGY MANAGEMENT SYSTEM? An Energy Management System is simply a logical approach to managing energy use. It does not need to be complicated but it should be supported by procedures and methods to ensure continual improvement and to spread awareness of energy efficiency throughout your business. An Energy Management System aligned with existing business priorities, processes and systems will assist you to monitor energy use and identify areas for energy efficiency by enabling you to understand and prioritise low cost energy efficiency initiatives as well as assist with long term planning for continued energy improvements. Figure 2: Energy Management System structure and flow. 2. Each step and stage of an Energy Management System is described in more detail as follows: Commitment Management and staff commitment is the foundation of a successful Energy Management System. By having clear energy performance objectives, allocating sufficient resources and communicating your intent across the business you will establish energy management as a business priority. An energy management policy is a great way of demonstrating this intent. An example of an Energy Management Policy can be found to the left and in the resource section of the Energy Efficiency Portal here. (Link to resource section and policy document) UNDERSTANDING Energy Monitoring & Reporting System Figure 1: Example Energy Management Policy. Establish an energy monitoring and reporting system to collect, analyse and report on energy costs and usage. This data will be critical when determining the value of energy efficiency investment opportunities. Your energy retailer will be able to provide you with energy consumption data at intervals across the day (e.g. 15 minute intervals), which will help you, map your consumption against operations. If you have a Building Management System it will probably be able to provide monitoring data on the performance of building systems like HVAC and lighting systems.

3 Energy Champion & Energy Teams Appoint an Energy Champion to develop, establish and manage your Energy Management System. If your business is large enough, form an Energy Team with staff from across your operations to support your Energy Champion. Engaging staff from across the business to support your Energy Champion will add significant value as they can contribute ideas such as simple changes to work procedures and practices including: Equipment running for no purpose or early/late equipment start-up and shut down times. Unnecessary heating and cooling. Excessive lighting levels or lighting in areas that are vacant. Incorrect thermostat settings. The plan should document energy saving opportunities and prioritise them according to payback periods, cost/benefit or return on investment. The plan should focus on low cost energy saving practices and procedures as well as energy saving technologies. This could include opportunities for an upgrade, maintenance or other changes to plant and equipment. The scope and detail of the plan will depend upon the resources available, especially time. An action plan will identify resources, budgets, proposed implementation timelines and financial returns for each activity. It will allow you to keep track of what needs to be done, by when and who s responsible. Figure 4 shows an example of an Energy Action Plan. Providing management endorsement of the Energy Management System and the activities of your Energy Champion is critical to the success of improving energy efficiencies within your operations. IIn order to assist your Energy Management Champion and Team to promote energy efficient practices within your business, the AHA has developed an induction manual. A copy of the manual can be found here AHA Induction Manual on Energy Efficiency (link) PLANNING Energy Assessments Undertaking an energy assessment can help you to identify energy efficiency opportunities across your entire business. An assessment is likely to include: Investigating the usage of all types of energy consumed. Identifying the energy usage of equipment within the building and its percentage of total energy use. Identifying cost-effective measures to improve the efficiency of energy use. Estimating the potential energy savings, indicative budget costs and payback periods for each recommended action. Reviewing energy management strategies, including monitoring systems and evaluation process. You might like to consult an external energy contractor to assess opportunities and undertake an energy audit to help you to identify efficiencies. Figure 2: An example of an Energy Action Plan. You can also find a copy of the plan in the resource section of the Energy Efficiency Portal here. (Link to resource documents and Action Plan) Energy Action Plans Using the findings from the audit, you can develop an Energy Action Plan. An Energy Action Plan is a management and operational plan through which energy efficiency objectives and requirements can be developed, monitored and realised. It guides a company s efforts to improve energy efficiency and represents a commitment to saving energy.

4 IMPLEMENTATION Implementation of energy efficiency improvement projects identified in your Energy Action Plan should be prioritised according to business needs. No/Low-cost Savings through Behaviour Change If you have done relatively little towards energy efficiency in the past then an energy assessment will identify a number of actions that are no or low cost and provide measureable savings. These types of improvements usually involve a change in the way equipment is used and therefore they involve changing the behaviour of people. Refer to other AHA Energy Efficiency Guides for simple opportunities to improve the efficiency of your HVAC system, lighting and equipment within your business. Improvement opportunities that are focused on changing staff behaviour will require a focus on education including building awareness of energy issues and encouraging and positively reinforcing energy efficient actions and behaviours. The AHA Energy Efficiency Guide Behaviour Change for Energy Efficiencies provides more information on the topic of driving energy efficiency through staff behaviour change. Upgrading to Energy Efficient Equipment Your Energy Action Plan is also likely to identify a number of more complex actions that may involve investment in new infrastructure or equipment these should be considered on their individual merit. Before heading out to buy new energy efficient equipment, you should reduce energy demand as much as possible. This change would potentially reduce the size and cost of equipment you may decide to purchase. Ensuring you get the most energy efficient outcome from new equipment means asking a few questions: 1. Should you replace like-with-like or can you explore alternatives? 2. Can you rearrange the equipment and related activities to optimise efficiency and reduce energy consumption? 3. What is the energy demand of the new equipment and what is its Energy Rating? 4. What alternatives and support does your equipment supplier offer? Understanding the Business Case for Investment Understanding the business case for investment in new equipment presents opportunities for reducing energy use because it takes all business issues into account, not just the simple price of the equipment. Lowest price is not always lowest cost. More expensive equipment may improve production and use less energy, thereby being less expensive to operate and more productive over its life. Opportunities can be missed by: Not considering all the costs and basing decisions only on price. Not considering all the benefits. Expecting purchases to pay for themselves too quickly. The business case is a financial analysis taking into account factors such as: Purchase price Repair and maintenance costs Tax treatments and incentives Government funding and incentives Operating costs Energy use (and future costs) Productivity End-of-life disposal A strong business case includes a measure of financial payback to the business for the proposed investment. There are many resources available to help you one such example is EPA Victoria s Calculating Payback Periods guide refer to the More Information section for a link. MANAGEMENT AND MONITORING Report on the outcomes of the projects implemented under the energy action plan together with regular updates on the energy performance of the business this will ensure continued focus on achievements. Communicating these achievements across the business, and to external stakeholders, will reinforce a positive energy efficiency culture and decrease the barriers and strengthen commitment to implementing future projects. CASE STUDY Lakes Resort, West Lakes, South Australia The Lakes Resort has recently installed a real time monitoring system to assess energy use from the air-conditioning system, bottle shop and main building. Each area was installed with sub-meters and time of use systems so that each area could be individually monitored. Cost per hour, carbon dioxide emissions, voltage and power factor are all recorded in addition to actual site energy demand. Each area, in addition to the entire site energy use, can be reviewed at any time by logging into an online system. By using this system, in combination with identified building and operational improvements, the actual results of energy efficiencies can be easily calculated resulting in benefits such as cost savings for the site.

5 EVERYONE HAS A ROLE TO PLAY IN ACHIEVING ENERGY EFFICIENCIES Achieving business energy efficiency objectives requires a contribution from all parts of the business including management, staff, contractors and even patrons and guests. MANAGEMENT Leadership is key, without leadership the Energy Management System will not help you to achieve your energy efficiency goals. Management must lead by setting energy efficiency objectives, demonstrating the commitment to them, assigning resources to implement the Energy Management System and the activities that are required under the Energy Action Plan; and monitoring the outcomes from the Energy Management System. STAFF Staff are instrumental in the implementation of an Energy Management System; both those in the Energy Team and across the business more broadly. A successful Energy Management System is one where staff work together to achieve the objectives and support the Energy Champion and the Energy Team. The AHA has produced a staff induction handbook, which will help you engage your staff in their role as part of a successful Energy Management System. PATRONS & GUESTS Patrons and guests can be encouraged to save energy without affected the comfort of their experience by being encouraged to utilise the systems that are provided (e.g. by removing the card from the key card switch off system when they leave their guest room). CONTRACTORS Contractors have an important role to play. That can be in the delivery of a high quality energy audit and its associated recommendations, or in ongoing system maintenance, or in suggesting a new piece of equipment that can increase efficiency. MORE INFORMATION 1. Hospitality: Saving energy without compromising service; Carbon Trust com/media/39220/ctv013_hospitality.pdf 1. Energy Wise Hotels Toolkit; City of Melbourne enterprisemelbourne/environment/documents/ EnergyWiseHotels.pdf 1. Energy & Greenhouse Management Toolkit Module 4, EPA Victoria, resources/documents/module4.pdf 1. EREP Toolkit (Module 4 of 5) Calculating Payback Periods, EPA Victoria, au/~/media/publications/1210.pdf ABOUT THE PROGRAM In response to rising energy costs AHA has developed a range of targeted resources to assist small and medium businesses to improve energy efficiency and reduce energy costs. These resources were developed with support in the form of an Energy Efficiency Information Grant from the Australian Government. This program has been designed to assist small to medium businesses to understand where and how energy is used, carbon emissions that result from the use of energy, and to understand and communicate the opportunities for reduction and resource efficiencies. The resources, tools and information available under the program identify energy efficiency improvements that can be incorporated into day-to-day operations and factored into future capital expenditure budget. For more information please visit The views expressed herein are not necessarily the views of the Commonwealth of Australia, and the Commonwealth does not accept responsibility for any information or advice contained herein

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