Energy Management System

(EnMS)
2 Day User Training
Expert Training Module 1, Day 2

1
 Day 2: Tuesday, 18 October 2022
Registration Time (min)
08:30 – 10:30  Welcome and Day 1 Review 20
 Communication Plans 25
 Opportunities for your organisation 10
 Operations 20
 Performance Evaluation & Improvement 20
 NEBs 15
10:30 – 10:45 TEA
10:45 – 12:45  EnMPIs 90
 Good Practice of Performance Reviews 20
 Implementation Plan 10
12:45 – 13:45 LUNCH
13:45 – 15:00  Introduction to Statistics 25
 Behaviour Change 20
 Financials 30
15:00 – 15:15 TEA
15:15 – 16:10  Financials (continued) 20
 Consider Risks and Barriers 20
 Next Steps 15
16:10 End of Course

2
 Review Day 1
What did you learn?
Any items requiring clarification?

3
How does the EnMS work?
Commit to
change
4 Context, 5 Leadership
& 7 Support

Check the kWh Plan the

results (LK R + CO 2 e) changes
9 Performance evaluation 6 Planning
Improve (& 7 Support)

10 Improvement

Make the
changes
8 Operation (& 7 Support)
4
Develop Communication
Plans

5
Communication Plan
Who do you need to communicate with?

What do you want to communicate?

When do you want to deliver the

messages?

How will you do it? What resources are

required?

What do you want to be different as a

result of communicating?

How will you know if the messages have

been understood?

6
Types of Communication
Internal
• Inside the boundaries of the EnMS
• Between different levels, functions, shifts
• Written procedures, newsletters, bulletin boards, intranet,
emails, communication screens, screen savers
• Social Media, apps, etc.
External
• Outside of the boundaries of the EnMS
• Regulators, media, community members, etc.
• Community meetings, newspaper, television, website
7
Communication
Internal Communication
• Top management to everyone
• EnMS
• Energy performance
• Commitment, awareness, and
understanding
• Process for comments or suggestions
External Communication
• Decide what to communicate
• Some to/from interested parties
• Plan for communication
8
Internal Communication
• Policy
• Objectives, targets,
action plans
• Energy performance
• Responsibilities
• Suggestion process
•…

9
 Suggestion Process
• Anyone can make suggestions
• Employees
• Contractors
• Need a means to collect
suggestions
• Need a means to direct them to
the correct person(s) for
evaluation
• Need a means to respond and
implement where appropriate
• Need evidence it is working
10
Exercise 8: Communication (15 minutes)
• Use the communication tab
• What energy related information is important and to
whom should it be communicated?
• What energy awareness topics should be
communicated?
• What are some techniques for providing appropriate
EnMS and awareness information? (In addition to
“standard” communication methods, think outside the box
of unique ways for providing relevant EnMS information.)
• What are some techniques for providing/receiving
suggestions and comments?

11
Opportunities for your
Organisation

12
What are the opportunities for your
organisation?
• Consider:
• External context
• Internal context
• Interested parties
• Use the Risks and Opportunities tab
• List the opportunities/benefits to your organisation
• From improved energy performance
• From an energy management system
• How will you exploit these opportunities

The purpose of this is to know how to emphasise the

importance of the EnMs and get support from all levels

13
14
 Operations
Operational control, design and procurement

15
Operations

16
 Implementation & Operation

Commit • Operational control

to
change • Design

Check • Energy Efficient Design (EED)

Plan the
the kWh changes • Purchasing energy, services,
results
(LKR & CO2) goods
• Implement action plans
Make the
changes

17
 What is this step?
• Doing - Daily activities to improve energy performance

• We have a policy with management support, resources,

strategic direction and committed team members

• We also have objectives, targets and action plans

• Now, we must implement the action plans, day to day

control and continual improvement of our energy
consumption

18
 Implementation & Operation
• This is a continuous daily process – not a project
• It needs to be part of day to day habits
• This is the part where energy savings and energy performance
improvements are actually made
• All other parts of the system support this
• This may be a major change for your organisation
• It may be a major change for you!!!
• Change is always difficult to manage
• Needs involvement, support and communication
• If you don’t change you can’t improve

“If you want to make enemies, try to change something”

~Woodrow Wilson

19
Operational Control
• This is a very critical part of the EnMS
• Only a small part of ISO 50001 and others
• Operation of SEUs
• Operating parameters
• Operating procedures
• Logging (electronic and manual)
• Maintenance of SEUs
• Maintenance procedures and schedules
• Training of external contractors
• Monitoring of operations, records, action plan & EnPIs

20
It is critical that all significant energy uses are
operated and maintained in the most energy
efficient way feasible.

This area is very commonly neglected

It is not difficult

21
Behaviour Change – Operation Control
• “We have always been operating (maintaining)
things this way”
• “Why do we need to change?”
• “Production is critical – if we change something we
may affect production”
• Change is uncomfortable
• It is difficult to sustain
• Communication is very important
• Discuss difficulties and solutions re: operation
control

22
Causes of failure to complete action items
• Lack of real commitment
• Lack of focus, failure will not be poorly viewed
• Lack of technical ability
• Need good ability to overcome other barriers
• “I’m too busy”
• = lack of commitment
• Lack of finance
• Should have been agreed at planning stage
• Lack of communication
• Need to understand expectations
• Need to understand roles

23
 Monitoring Operational Control
• It is a day-to-day activity to ensure that equipment and
systems are operating efficiently
• Give most attention to SEUs
• Someone should be completing operational checks on a
regular (daily?) basis
• These form the basis of the operator logs or other
monitoring process
• These logs need to be checked routinely and regularly
• Also check maintenance activities
• Importance of checking critical operating parameters

24
 Energy Efficiency Design (EED)

Ensure Design and Design and

Challenge Design and
operational challenge challenge
energy challenge
control is distribution generation
service controls
facilitated system system

25
 Procurement
• Can have a significant impact on your energy performance

• Inform vendors that you have an EnMS that requires energy

performance to be assessed as appropriate when purchasing

• Ask vendors how they can help with your energy performance

• You need to be able to assess the energy performance and impact

of items that you purchase

• Need to move towards Life Cycle Costing (LCC)

26
Procurement
• Services
• Maintenance
• Designers and architects
• Constructors
• Energy advisors
• Equipment
• Boilers, chillers, compressors, etc.
• Production equipment
• Spare parts; lamps, fan belts, lubricants, etc.
• Energy
• Check tariffs for electricity and natural gas
• Check specifications for fuels

27
Performance Evaluation and
Improvement
Checking and continual improvement

28
Performance Evaluation

29
Performance Evaluation and Improvement

• Monitor energy performance

Commit
to • Are targets being achieved?
change • Check legal compliance
Check • Carry out internal audits
the kWh Plan the • Hold the management review
changes
results
(LKR & CO2)
• Non-conformity management
• Continual improvement
Make the
changes

30
 Performance Checking
• We have a baseline energy performance
• We have targets for performance improvement
• We need to know if we are meeting our performance improvement
targets
• We have Energy Performance Indicators (EnPIs)
• This can be a complex topic depending on your industry and your
energy drivers
• You need to regularly compare actual EnPIs with expected values
• If possible, at least one EnPI per SEU
• One EnPI for each energy source

31
 System Checking and Improvement
• Non-conformity (NC)
• Not fulfilling a requirement
• Beware of excessive numbers of NCs
• Critical part of continual improvement
• Corrective action
• Action including prevention of recurrence of a non-conformity
• Removing the cause of the non-conformity
• Internal Audit
• Check that the system is being run in accordance with its
requirements

32
 What is an Internal Audit?
• Independent review of part or all of the EnMS
• The purpose is to determine if the EnMS is being used
effectively
• Is everyone fulfilling their roles
• Is the EnMS effective in improving energy performance?
• Is it achieving its objectives?
• Does the EnMS meet the requirements of a standard if
certification is being sought, e.g. ISO50001
• It is an essential part of continual improvement

33
 What is Reviewed
• Objectives, targets and action plans
• Legal and other requirements
• Policies, documentation and operational controls including;
• Context
• Risks and opportunities
• Energy review
• Compliance with legal and other requirements
• Awareness, training and competence
• Communication
• Document control
• Internal audits (yes!) and non-conformances
• Management reviews
• Performance improvement (EnPIs)

34
Management Review
• It is part of building commitment and leadership.
• Usually happens once a year (can be more often).
• Top management and people involved in RnR should
attend it.
• Review the organisation’s EnMS to ensure it is
continually improving.
• Review energy savings to ensure they are continually
improving.
• Alignment with strategic direction
• They look at the past and future of the EnMS.

35
Management Review: Inputs
• Follow up actions from previous management reviews
• Changes in external and internal issues and risks and
opportunities
• Review of the energy policy
• Review of energy performance and related EnPIs
• Compliance with legal requirements and changes
• Objectives and targets have been met?
• EnMS audit results
• Status of non-conformities and corrective actions
• Projected energy performance for the following period
• Recommendations for continual improvement
36
Management Review: Outputs
• Opportunities to improve energy performance
• Changes to the energy policy
• Changes to the EnBs and EnPIs
• Changes to objectives, targets or other elements of the
EnMS
• Improvements in integration with business processes
• Changes to allocation of resources
• Improvements in competence, awareness and
communications

37
See you in 15 minutes!

38
Non-Energy or Co-Benefits
There is more to be gained than only energy savings

39
There is more to EnMS than ENERGY

40
What are NEBs ?

41
Case Study ~ Automotive OEM
Johnson Matthey South Africa
 Automotive Sector
 Started implementation of EnMS in 2012
• Target ISO 50001 certification
 Completed implementation in 9 months
Johnson Matthey 2012-2013
 4 large projects implemented
Annual Electricity Savings 9.4 GWh • Compressors optimisation;
Annual Monetary Savings $580 000 optimising chillers; production
related projects
- Cost savings from projects $360 000
- Cost savings from behavior $220 000 Success Factors
changes & operational efficiencies  Full support and resources from top
management
Total Investment $42 000
 Strong Energy Manager leadership
Payback Period (years) 0.8  Weekly meetings of Energy Team
ISO 50001 Certified  Adjusting existing structures to energy
specifics (policies, procedures & reporting)
2014 - 2016 Savings 16.3 GWh 42
So what do we achieve besides saving
electricity, if we go from halogen to LED in a
shop?

43
NEBs of LED lights
• Reduced maintenance LED life 25000 hours, halogen 1000 hours
• Reduced procurement and installation cost
• Reduced cooling
• Less heat from LED, less cooling, that leads to less energy
consumed by aircon, less time for aircon means less
maintenance and extended life of aircon
• LEDs does not change colour of clothing, that means less clothing
has to be sold at sale prices
• LEDs reduce fire risk
• LEDs do not give off heat: maybe people stay longer, shop more 
• LEDs gives shop green image
• Less hazardous waste disposal on replacement

44
NEB in the ESO List

45
Discussion

• What NEBs are there for the following:

1. Steam trap management program
2. Improved steam insulation in a boiler house
3. Implement a leak repair program for compressed
air
4. Improve building insulation (envelope)
5. Use of automatic lighting control systems
6. Use of solar shading on buildings

46
 Energy Performance
Measurement and Indicators
(EnPMI)
Delusions and barriers

47
 Energy Performance
Three components of energy performance improvement
• Consume less energy than expected
• I.e. using a baseline normalised for relevant variables,
adjusted for static factor changes.
• Through an energy intervention
• Behaviour, operational control, technology, etc.
• Aligned with the context of the business
• Consistent with legal, financial, operational and business conditions.
• Does not negatively impact business, including legal compliance.

Definitions from ISO 50001: 2018

3.4.6 Energy performance improvement = improvement in measurable results of energy efficiency, or energy consumption
related to energy use , compared to the energy baseline
3.4.4 Energy performance indicator EnPI = measure or unit of energy performance , as defined by the organisation

48
Why Monitor Performance?
• Provide a reasonably accurate indication of the current situation
within the organisation

AND

• To provide objective input into the decision making processes of

the organisation

49
Purpose of Energy Metrics
• Objective support for decision making
• Often subjective reasons
• We need to know how much energy we are using
• We need to know if performance is improving or not
• We need to know if we are meeting targets
• We need to be able to verify savings of improvements
• We need to establish the following:
• Baseline
• Baseload
• Performance indicators (EnPIs)
6.3
• Numerical basis
6.4
50
 Why Monitor Performance?
• Management controls • Forecasting
• Financial • As an alternative method to
• Resources traditional budget planning
• Sales and production • Performance monitoring
• Planning • Measure performance to identify
• Forecasting unexpected deviations
• Ordering of materials • Analyse resource consumption
trends and patterns
• Compliance and incentives • Monitor budgets and cost allocation
• Legal requirements for resources
• Tax incentives • Verify savings
• Compare performance • Determine actual savings of
• With a different period implemented projects
• With a different division or company • Monitor savings progress against
targets
• Detect savings opportunities
• By reviewing historical data and
looking for trends and anomalies

51
52

"How many managers have been told by their staff that

bad coal consumption was due to low output?
How is it possible for them to judge whether this is an
excuse or a reason?”

These are the opening words from a fuel efficiency bulletin, published in 1943
by the Ministry of Fuel and Power, which criticises the "ton of coal per ton of
output" metric as a misleading indicator of fuel efficiency.

The author was Oliver Lyle, managing director of the eponymous sugar
refinery, a very knowledgeable and eminent engineer who had no time whatever
for the Specific Energy Ratio. Any works engineer today will know that SERs
vary continuously for reasons nothing to do with energy efficiency.

52
Causes of Variation in Consumption
RENEWABLE EFFICIENCY
OPERATIONS
SOURCES? INVESTMENT

VARIATION IN
BEHAVIOUR
CONSUMPTION

ANALYSIS AND DRIVING STRUCTURAL

MONITORING FACTORS CHANGE

53
54

Energy per unit of production

140
126
120
100 99
100 95

80
60
40
20
0
2008 2009 2010 2011
Car assembly industry
54
Energy performance in Industry – Which is right?
Absolute consumption Regression 1 variable: Production

- 23 % -3%

Ratio kWh/hl Regression 2 var: prod & weather

+3%

- 10 %

Beverage industry
55
How is Performance Measured?
• How do you measure Energy Performance now?
• Actual cost compared with budget?
• kWh last month compared with the same month last year?
• kWh/m2 compared with another facility
• kWh/unit of production
• Moving total of 12 months kWh
• More complex method

Discussion point

56
57

How do you measure energy performance?

• Absolute Values?
• Actual cost compared with budget?
• kWh last month compared with the same month last year?
• Moving total of 12 months kWh

• Ratios?
• kWh/m2 compared with another facility
• kWh/unit of production
• Coefficient of performance
• Energy efficiency (out/in)
• Energy intensity (GJ/$)

• More complex and precise methods?

• Normalized consumption taking into account relevant variables

57
How is Performance Measured?
Levels of Performance Measurement
• Facility-wide EnPIs
• Electricity, Fuel, etc.
• SEU-level EnPIs
• Energy-system level EnPIs
• Compressed air system
• Steam system
• Furnace / heating system

58
 How is Performance Measured?
Textile Company A
Production Energy
Month
kg kWh
Jan 4 415 5 412
Feb 12 149 11 180
Mar 15 982 14 202
Apr 6 584 5 122
May 12 605 18 810
Jun 10 715 14 655
Jul 9 736 11 889
Aug 14 513 17 433
Sep 13 331 15 983
Oct 20 705 21 401
Nov 20 472 17 312
Dec 7 159 13 892

Which is the worst performing month?

59
 How is Performance Measured?
Company A Specific Energy Ratio (SEC)
Production Energy Energy Ratio
Month [kg] [kWh] [kWh/kg]
Jan 4 415 5 412 1.23
Feb 12 149 11 180 0.92
Mar 15 982 14 202 0.89
Apr 6 584 5 122 0.78
May 12 605 18 810 1.49
Jun 10 715 14 655 1.37
Jul 9 736 11 889 1.22
Aug 14 513 17 433 1.20
Sep 13 331 15 983 1.20
Oct 20 705 21 401 1.03
Nov 20 472 17 312 0.85
Dec 7 159 13 892 1.94

Which is the worst performing month?

60
How is Performance Measured?
• Now consider the months of July and August:
Company A
Production Energy Energy Ratio
Month [kg] [kWh] [kWh/kg]
Jul 9 736 11 889 1.22
Aug 14 513 17 433 1.20

• In absolute terms August is the worst performer

• In ratio terms July is the worst performer
• Which one is correct?
• Is there another way of representing our energy data?

61 61
 How is Performance Measured?
Now consider the “average” performance for the year:

We will deal with more

details on constructing
this kind of scatter plot a
little later
• Create a scatter plot August
using Excel of the
data in the table.
• Insert a trendline
from the Menu. July

62
How is Performance Measured?
What is this “average” trend line and why does it work?

• The “average” trend line represents the normalised

performance by taking into account production and
compensating for it.

• It is obtained by performing a LINEAR REGRESSION of the

relation between production and energy consumption.

• In this example, production is a factor that is significantly

affecting energy consumption. We call this factor a RELEVANT
VARIABLE.

63
Review of Current Performance
• By comparing the actual performance to some expected
performance
• This requires:
• The ability to monitor and measure some representative quantity of
performance at regular intervals to track progress, called an ENERGY
PERFORMANCE INDICATOR (EnPI)
• The setting of some reference point for determining whether the
performance is good or bad, called an ENERGY BASELINE (EnB)
• Where an improvement on past performance is expected, a new
reference point is set, called an ENERGY TARGET

64
 Relevant Variables and Static Factors
Reminder from day 1

Relevant variables Static factors

• Measurable • Same – except they do not
• Vary routinely vary routinely
• Number of shifts
• Cause consumption to vary • Facility size
significantly • Design of installed equipment
(or are plausibly correlated) • Range of products
• Production activity…
• Weather…
• Hours of darkness…
• Distance driven…
• Raw material properties...
• Independant (either cannot
be controlled, e.g. the
weather, or we chose not to
control, e.g. production) 3.4.8, 3.4.9

65
Exercise 9: Relevant Variables - Interactive

• Consider a family car

• What are the relevant variables affecting fuel
consumption?
• Which are practical to measure and monitor?
• Which are economical to measure and
monitor?

66
 Review of Current Performance
• How do we currently review performance of a linear regression
model?

Baseline

67
 Linear Regression
Textile Company A
Production Energy
Month
kg kWh
Jan 4 415 5 412
Feb 12 149 11 180
Mar 15 982 14 202
Apr 6 584 5 122
May 12 605 18 810
Jun 10 715 14 655
Jul 9 736 11 889
Aug 14 513 17 433
Sep 13 331 15 983
Oct 20 705 21 401
Nov 20 472 17 312
Dec 7 159 13 892
 Remember: Y = mX + c
1. Create a scatter plot using Excel of m is the slope,
the data in the table. c is the intercept
2. Insert a trendline from the Menu. X is the “relevant variable” (production)
3. Show the equation for the trendline. Y is the “dependent variable” (energy
consumption)
68
Linear Regression
• The trendline for the 12 months data for Company A can be
defined in terms of the straight line equation:
Y = 0.7829 * (X) + 4 260.7

• The energy consumption per unit of production is 0.7829

kWh/kg.
• At zero production, X = 0, but the energy consumption (Y) is
not zero.
• It is estimated at 4 260.7 kWh. This is called the BASELOAD.

69
Linear Regression
• Advantages of linear regression models:
• For graphical displays it is easier to identify trends, outliers and
anomalies.
• It separates the fixed energy consumption from the variable energy
consumption.
• Can be used as a method of forecasting energy consumption more
accurately if the plan for the relevant variable has been defined.
• The model accuracy can be quantified.

70
 Linear Regression – Model Evaluation
1800
• Visual observations:
Energy Consumption [kWhl/month]

1600
• Outliers
1400
• Clusters
1200
• General dispersion
1000
800 • Review formula:
600 • Unit consumption
400 • Baseload
200 y = 18.572x + 167.84 • R2
0 R² = 0.8926
10 20 30 40 50 60 70 80
Production (kg)

v.2019.04
 Linear Regression – Model Evaluation
Sample 1
Sample 2
400 000
25 000
350 000
300 000 20 000
250 000
15 000
200 000
150 000 10 000
100 000
50 000 5 000

-
-
- 500 1 000 1 500 2 000 2 500 3 000
- 5 000 10 000 15 000 20 000 25 000

Sample 3
120000

100000

80000 • Not all linear regression models

60000
are the same.
40000
• How do we quantify the accuracy
20000

0
of the model?
0 50 100 150 200 250 300 350 400

72
Linear Regression – Model Evaluation
Not all linear regression models are the same. In order to determine
the suitability of a model as a good representation of the data,
certain statistical quantities are calculated from the data:
1. R2 - a test of the percentage of variation of the dependent
variable being explained by the independent variable.
- calculated by taking into account:
Slope, Dispersion, Range and Number of Data Points.
2. P-value - a test of significance of a single independent variable
as relevant to the model. **
3. Significance F value - a test of significance of the entire model.
**

** More detail in EnPMI course and Module 2.

73
 Linear Regression – Model Evaluation
1800 R2: The % of variation in y
(estimated energy
Energy Consumption [kWhl/month]

1600
consumption) explained by
1400 variables
1200 • High R2 (0.75 to 1):
1000 • Strong correlation.
800 • Not necessarily good
performance.
600 • Very important that the
400 model makes technical
sense and not just a high R²
200 y = 18.572x + 167.84
R² = 0.8926
• Low R2 (0 to 0.75):
0 • There may be other
10 20 30 40 50 60 70 80 variables.
Production (kg)
• Saving opportunities exist
in operational control.

74 74
 Linear Regression – Model Evaluation
Consider the Company A
example from earlier:

1. We can show the R2 value

on the graphic using the
Excel option.
R2 = 0.6524
2. We can create a statistical
summary of the data using
the DATA option in Excel.

75
 Linear Regression – Model Evaluation
SUMMARY OUTPUT

Regression Statistics R2 - desirable to be > 0.75

Multiple R 0.80768924
R Square 0.65236191
Adjusted R Square 0.6175981 C intercept and m values
Standard Error 3063.80289
Observations 12 F - desirable to be < 0.1

ANOVA
df SS MS F Significance F
Regression 1 176150093.3 1.76E+08 18.76555 0.001485069
Residual 10 93868881.63 9386888 P - desirable to be < 0.1
Total 11 270018974.9

Coefficients Standard Error t Stat P-value Lower 95% Upper 95% Lower 95.0% Upper 95.0%
Intercept 4260.72602 2403.280738 1.772879 0.106653 -1094.117163 9615.569207 -1094.117163 9615.569207
[kg] 0.78293378 0.180735895 4.331922 0.001485 0.38022911 1.18563845 0.38022911 1.18563845

76
Linear Regression – Multivariable
• What if there is more than one variable that influences
consumption? Consider the following:

1 – A textile mill: What relevant variables (factors) would affect energy

consumption?

2 – A rubber factory: What relevant variables (factors) would affect

energy consumption?

3. A tea factory: What relevant variables (factors) would effect energy

consumption?

Discussion point

77
Linear Regression – Multivariable
Multivariate linear regression
• As a solution, one could develop a multivariate linear regression
(using more than one input as a potential relevant variable)
Y = (m1 * X1) + (m2 * X2) + (m3 * X3) + … + C
Where:
• X1, X2 and X3 are the relevant variables
• m1, m2 and m3 are the unit consumptions (slopes) for each relevant
variable
• C is the Baseload (consumption when all relevant variables are 0
or close to 0)

78
 79

SEC

1 000
1 500
2 000
2 500
3 000
3 500

0
500
2013/01/09

2013/01/23

2013/02/06

2013/02/20

2013/03/06

2013/03/20

2013/04/03

2013/04/17

2013/05/01

2013/05/15

2013/05/29

2013/06/12
SEC: Up and Down

2013/06/26

2013/07/10

2013/07/24

2013/08/07

2013/08/21
• When production goes UP, SEC goes DOWN
• When production goes DOWN, SEC goes UP
2013/09/04

2013/09/18

2013/10/02

2013/10/16

2013/10/30

2013/11/13

2013/11/27
SEC

2013/12/11
Production

2013/12/25
0
50
100
150
200
250
300
350

production
79
Drink industry
80

Regression vs SEC
SEC: kWh / UNIT
300000

250000

200000 REGRESSION
TREND
kWh/week

150000
y = 1603.7x + 108945
R² = 0.8436
100000 baseload

50000 Using SEC shows

not only non-precise results (YELLOW)
but usually contrary results (RED)
baseload
0
0 10 20 30 40 50
batches Pharma industry
80
81

Energy Performance Indicators: Criteria

• Only responds to changes in energy
performance

• Unaffected by weather, production outputs or

other relevant variables

• Direction and magnitude of change consistent

with change of performance

81
82

Discussion
Is Specific Energy Consumption (SEC) useful in the EnMS

context?

In fields of specialized knowledge, we aim to render an

account that is plain and simple, yet does no violence to
the difficulty of the subject, so that the uninformed
reader can understand us while the expert cannot fault
us. We try to keep in mind a saying attributed to
Einstein—that everything must be made as simple as
possible, but not one bit simpler.

82
Overview of Good Practice in
Energy Performance
Measurement

83
Basic Terminology

 Energy performance indicator (EnPI)

Energy Baseline
 Energy Baseline (EnB)

 Energy Target Energy Target

Actual value

Reference EnPI value

 Energy Improvement

Current EnPI value

Target

(reporting period)
Achieved !

(baseline period)
Source: Adapted from ISO 50006

84
 EnPI & EnB

EnB: Expected consumption = 1,163,449+(517*CDD5)+(1595*Cured)

EnPI: A comparison of baseline (expected consumption) and actual
consumption
85
Different views, same story
Drinks industry (12 variables)

Baseline

86
Different views, same story
Drinks industry (12 variables)

Baseline

87
Different views, same story
Drinks industry (12 variables)

Baseline

Accumulative difference between actual and expected

consumption. It is typically used for monitoring change
detection and taking corrective action.

88
88
Monitoring Performance

Data from 2011 used to develop the

expected consumption formula

Expected consumption = 1,163,449.22+(517.27*CDD5)+(1594.81*Cured)

89
Monitoring Performance

Actual consumption in 2012

Expected consumption = 1,163,449.22+(517.27*CDD5)+(1594.81*Cured)

90
Monitoring Performance

Expected consumption is the

BASELINE. It is the consumption that
we should have if the performance is
the same as last year, based on the
relevant variables

Expected consumption = 1,163,449.22+(517.27*CDD5)+(1594.81*Cured)

91
Monitoring Performance

The actual savings are

the difference between
actual consumption
and expected
consumption

For example, in
January we saved
26682 kWh

92
Monitoring Performance

The actual savings CUSUM are the

cumulative savings from the
beginning

For example, from January to June

we saved 198320 kWh

93
Monitoring Performance

The target consumption is the

consumption we want to have.

For example, the target here is to

save 2.5%

94
Monitoring Performance

We can also compare our consumption with the

target.

For example, from January to May the target

savings were 227890 kWh and we have saved
198320 kWh, so it is less than the target.

95
Monitoring Performance

50000

0
Actual Savings
-50000
Target Savings
-100000
Baseline
-150000

-200000

-250000

12/11
01/12
02/12
03/12
04/12
05/12
06/12
07/12
08/12
09/12
10/12
11/12
12/12
96
Savings CUSUM
50000

Actual
-50000 Savings

-100000 Target
Savings
-150000

Baseline
-200000

-250000
12/11

01/12

02/12

03/12

04/12

05/12

06/12

07/12

08/12

09/12

10/12

11/12

12/12
97
Implementation Plan
Project plan
“project libre”

98
99
4. Context

100
5. Leadership

101
6. Planning

102
7. Support

103
8. Operation

104
9. Performance Evaluation and
10. Improvement

105
Introduction to Statistics

106
107

Purpose of Energy Metrics

DETECT SAVING OPPORTUNITIES (1)

Energy
consumption

BASELINE PERIOD MONITORING PERIOD

time

107
108

Purpose of Energy Metrics

DETECT SAVING OPPORTUNITIES (1)
FORECAST (2)
Energy
consumption

BASELINE PERIOD MONITORING PERIOD

time

108
109

Purpose of Energy Metrics

DETECT SAVING OPPORTUNITIES (1)
FORECAST (2)
MONITOR PERFORMANCE (3)
Energy
consumption

BASELINE PERIOD MONITORING PERIOD

time

EXPECTED CONSUMPTION
ACTUAL CONSUMPTION

109
110

Purpose of Energy Metrics

DETECT SAVING OPPORTUNITIES (1)
FORECAST (2)
MONITOR PERFORMANCE (3)
Energy
consumption VERIFY SAVINGS (4)

Energy
saving
measure

BASELINE PERIOD MONITORING PERIOD

time
The difficult part is to calculate the
red line (expected consumption). EXPECTED CONSUMPTION
ACTUAL CONSUMPTION
Statistics can help. TARGET CONSUMPTION

110
111

This is not statistics

• This is just showing consumption

and weather trends
• This is just real data.
• We can see they are similar…

111
112

This is not statistics This is statistics

• This is just showing consumption • This is showing exactly the same

and weather trends information in a different way
• This is just real data. • Again, this is just real data.
• But we can see they are similar… • But now we can see the
correlation more clearly
112
113

We can draw the line that fits best

• We can draw the trend

• It is the line that best fits
with all the points

• Sum of positive differences = Sum of negative differences

• We are creating a representative trend from real data.
• This is statistics!
113
114

We can draw the line that fits best

• You can also use formulae in
excel
 c: =INTERCEPT (known_y's,known_x's)

 m: =SLOPE (known_y's,known_x's)

 R2: =RSQ(known_y's,known_x's)

 Remember: Y= mX + c
• c and m are constants
• X is a measured “relevant
variable”

114
115

Statistical Values

• Intercept :
• Consumption when the
variable is 0.

• It is the baseload in
some cases.

• It can also be
considered as “waste”

115
116

Statistical Values

• Slope:
• In this case, kg of steam
needed per HDD15.5

• Statistically, each additional

HDD15.5 will make us
consume that amount of
energy.

116
117

Statistical Values
• R2:
• % of variation explained by
variables
• High R2:
a) Strong correlation.

• Low R2:
a) The variable is not so
relevant.
b) There are other variables.
c) Saving Opportunities in
operational control.

117
118

What is R2
16.00

14.00

12.00

10.00

R2 = 1 - 12*(22)
8.00 Average = 7
(4*12)+(4*32)+(2*52)+(2*72)
6.00

4.00
48
2.00
R2 = 1 -
188
0.00
0 1 2 3 4 5 6 7
R2 = 1 – 0,2553
y = 2x
R² = 0,7447
R2 = 0,7447

118
120

Statistical Values

• There will be other statistical values that will

help us to calculate a proper baseline.

• P-value

• We will see them during the planning module

120
121

Limits of Statistics
• Statistics are not perfect. There is always a margin of
error
But...
• Do we have a more precise method to calculate
baselines?
• This method takes into account the impact of relevant
variables.
• It also takes into account the baseload.
• It is built using our own data. It comes from real
results.

121
See you in 1 hour!

122
Behaviour Change
Change management

123
Idle electricity

124
125

Where do we need behaviour change?

• Top management need to support and make
decisions
• Middle management are often a barrier to change
• Operational control requires changing work
practices
• Energy reduction is one of the few costs in an
organisation which does not have personal impact
• Why do we resist?
• Personal status
• Blame culture
125
Change Management Process
Eight step change model (John P. Kotter : Leading Change)
1. Create a sense of urgency
2. Build support from key influencers
3. Create a vision of what can be achieved
4. Communicate the vision
5. Remove obstacles
6. Create short term wins
7. Build on the improvements
8. Anchor the change in your culture

This process can be aligned with your EnMS

development

126
1. Create a sense of urgency
Driver
− External or internal context (PESTLE analysis)
− Cost Reduction
− Carbon Emissions
− Competition
− Changes to the market
− Security of supply
− Price rises
− etc…
127
2. Build support from key influencers
Support Key Personnel
−Management − Influencers of change
−Employees − Senior Management
−About bringing people − Production
with you on change
journey − Quality
−Momentum − Engineering
−Communication − Employee
−Emphasise urgency Representatives

128
3. Create a vision of what can be achieved
What is possible Do not accept
−Long Term −They are different
−Use Examples e.g. −It’s easy for them
50% reduction
achieved elsewhere −etc.
−Previous success in 18,000,000
Consumption Gas target Linear (Gas target) Target taken at 25% reduction
from 2004 baseline

UNIDO programs 16,000,000

13,944,326

kWh of Natural Gas per annum

14,000,000 12,216,666

−What are competitors 12,000,000

11,273,810

doing? 10,000,000

8,000,000
9,315,832

−Goal Alignment 6,000,000

4,000,000
7,151,985

2,000,000

0
Dec-04 Mar-05 Jun-05 Sep-05 Dec-05 Mar-06 Jun-06 Sep-06 Dec-06 Mar-07 Jun-07 Sep-07 Dec-07 Mar-08 Jun-08 Sep-08 Dec-08

129
4. Communicate the vision
The 5 W’s The Message
−Who should be told − Urgency
−When to communicate − Benefits
−What is the message − What others have
achieved
−Where will it be delivered
−Who is responsible
− Your plans
− What success looks
like
Non Verbal

130
5. Remove obstacles (link to Risks and Opps)

What barriers? What solutions?

−Weakness and threats − Communication
from SWOT analysis
− Negotiation
−Resistance to change
− Urgency
−Lack of commitment
− Benefits (including non-
−Knowledge energy benefits)
−Existing procedures and
practices

131
6. Create short term wins
Opportunities What kind
−Easily implemented − Compressed air leaks
−Highly visible − PIR on lighting
−Large impact − Boiler house noise
reduction
−Low cost (operational
control) − Reduced heat in
process area
−Use data where possible
− Win over the non
believers

132
7. Build on the improvements
Action Plans Focus on the Vision
−Communication the − Regular engagement
successes − Take on bigger
−Continual improvement improvements
−Stakeholder involvement − Engage with more
personnel
−More technical projects
−Larger teams
− Continue
communicating
−Relentless focus
− Not a project

133
8. Anchor the change in your culture
Relentless Focus
−Re-evaluate the vision
−Communication
−Not a Project
−Need to make it the new
culture
−Make the switch to
sustainability permanent
−Integrate into business

134
Change Management

“It is not the strongest of the species that

survives, nor the most intelligent; it is the
one that is the most adaptable to change”
Charles Darwin

Source: John P. Kotter Leading Change

135
13 Financial Analysis

136
Some Financial Choices
• Two motors are not the same
• One costs LKR 15 000 and the other LKR 10 000
• I will give you LKR 100 now or LKR 200 in 12 months time?
• Two compressors:
• One costs LKR 250 000 to buy and LKR 500 000 p.a. to operate
• The other LKR 300 000 to buy and LKR 450 000 p.a. to operate
• Which is best?

137
What is a Financial Appraisal?
• All organisations need to control spending
• Current spending (expenses)
• Capital spending (investment)
• Need to make choices of where to spend
• Spend; Yes or No?
• Choose between options for investment in savings project
• Choose between options using life cycle cost (LCC)
• Need tools to help with these choices
• This is a basic introduction
• We will ignore the effects of taxes
• We will consider the effects of inflation and interest rates

138
 Simple Payback (SPB)
• SPB = Total installed Cost in LKR / Annualized Savings in LKR.
• Usually organisations have a limit e.g. only opportunities with a
payback of less than 2 years will be considered.

• Disadvantages • Advantages
• Too simple • Simple
• What is the effect of the life • Quick
of the item? • Good rule of thumb
• Should not be used for • Useful as a quick estimate
major decisions, either high • Useful for low cost
cost or organisationally opportunities
critical

139
Simple Payback (SPB) – Example 1
• Energy Savings that will be made = LKR 5 000 p.a.
• Cost of modification = LKR 10 000
• What is the payback?

140
Simple Payback (SPB) – Example 2
• Energy Savings that will be made = LKR 5 000 p.a.
• Additional maintenance cost = LKR 2 500 p.a.
• Cost of modification = LKR 2 500
• What is the payback?

141
Time Value of Money
• Very important concept
• If I offer you the choice of LKR 25 000 now or LKR 4 000 p.a.
for 10 years which would you choose?
• You need to take into account the option of putting the LKR 25 000 in
the bank and earning interest at say 10%
• Due to inflation, money is worth less in future than it is now
• Assume 5% inflation
• LKR 100 now is worth LKR 95 in one year (at its present day value)
• We need to take this into account
• Future savings are worth less than they are now
• The reverse may be the case with savings if energy prices continue to
rise

142
Discount Rate (or Hurdle Rate)
• Need to know discount rate
• This is the return the organisation will decide to invest at
• Sometimes increased for more risky projects
• Related to the cost the organisation incurs in raising the capital
• Weighted average cost of capital (WACC) (debt and equity)
• Usually your accountant will know the discount rate
• Assuming the money is available

143
Net Present Value (NPV)
• Present Value (PV) or present worth (PW)
• The value now of a future amount of money
• E.g. LKR 100 in 1 year at 5% inflation has a present value of LKR 95
• NPV is the value now of a future stream of cash flows
• Can be incoming or outgoing and is typically a combination of both
• Typically we spend money now to make a saving
• Then we save money in the future on an ongoing basis
• In energy terms we save energy each year
• We may have extra maintenance costs (or less!)
• We may have a salvage value at the end
• If NPV > 0 then it is a viable idea
• If you have the money and it is the best NPV available

144
 NPV Example
LKR 500 investment and R 200 R 200 R 200 R 200
LKR 200 savings for 4 years 0
at a 5% discount rate

1 2 3 4 5
R -500
R −500
= R −500
1.05 0
R 200
= R 190.47
1.05 1
R 200
= R 181.40
1.05 2
R 200
= R 172.77
1.05 3
R 200
= R 164.54
1.05 4
Positive cash flow (incoming e.g. savings)
NPV = LKR 209.18
Negative cash flow (outgoing e.g. investments)

145
Internal Rate of Return (IRR)
• Very similar to NPV
• Doesn’t use discount rate
• IRR is the rate of return of the projected cash flows

• If IRR > discount rate / hurdle, then

• If IRR = 15% and hurdle rate = 14%, go or no-go?

Discussion point

146
NPV and IRR calculation

ER9

147
Life Cycle Cost (LCC)
• Similar to NPV but all cash flows are negative
• Useful in procurement considerations
• For example:
Two options evaluated over its 10 year lifespan:
• Buy a fixed speed pump for LKR 250 000 and annual running costs of
LKR 40 000
OR
• Buy a variable speed pump for LKR 375 000 and annual running costs
of LKR 20 000

148
Life Cycle Cost (LCC)

149
Life Cycle Cost (LCC)
Life Cycle Costing (LCC)
Option 1 Option 2
Cost -50 000 -75 000 Interest / Hurdle Rate 10%
Year 1 -8 000 -4 000 Inflation Rate (CPIX) 3%
Year 2 -8 000 -4 120
Year 3 -8 240 -4 244
Year 4 -8 487 -4 371
Year 5 -8 742 -4 502
Year 6 -9 004 -4 637
Year 7 -9 274 -4 776
Year 8 -9 552 -4 919
Year 9 -9 839 -5 067
Year 10 -10 134 -5 219

LCC - 678
-103 - 535
-102

ER9

150
Exercise 9: Financial Analysis (20 minutes)
• An organisation has 2 options in selecting a new air
compressor.
• Option 1: Cost LKR 325 000 and an operating cost of
LKR 2 160 000 p.a.
• Option 2: Cost LKR 225 000 and an operating cost of
LKR 2 520 000 p.a.
• The discount rate is 11% and costs increase at 4% p.a.
• The life of the compressors is 15 years.
• Which option would you recommend?

151
Financial Analysis - Exercise Solution

Life cycle cost comparison

Captial cost Operating cost

How much of the operating cost is

related to energy consumption?

152
See you in 15 minutes!

153
Consider your Risks and
Barriers

154
Plan to manage risks and opportunities
• PESTLE analysis
• SWOT analysis
• Interested parties
• Legal and other requirements
• Risks and barriers
• Opportunities

• How will you manage risks and opportunities

• Who will do what, and when?

155
Integration with normal business processes
• EnMS must be part of normal management and operations
• Not a separate “project”
• Decisions should take account of energy impacts
• Include life cycle costing for investments
• Resources should be managed across all operations
• This includes finance, training and staff time
• Indicated in the roles and responsibilities
• Energy management should be given appropriate level of priority
• “I don’t have time” = “Something else is more important”

The objective is to maximise value and minimize cost for the whole
organisation.

156
Risks and Opportunities tab
Drivers and opportunities

Risks and barriers

157
 Add more risks and barriers?

• Describe the risks or barriers clearly

• Consider external risks from PESTLE analysis

• Consider weaknesses and threats from SWOT analysis

• Grade each from (Low/medium/high) in terms of importance

or severity
• Prioritise the most serious ones

158
Exercise 10: Maturity Matrix (5 minutes)
• Open the maturity matrix worksheet of the management
spreadsheet
• Score your organisation in each category
• Try to be objective and realistic
• We will do this again and compare the results at the end of the
program
• Send us the results and will will summarise

159
Next Steps

160
How does the EnMS work?
Commit to
change
4 Context, 5 Leadership
& 7 Support

Check the kWh Plan the

results (LK R + CO 2 e) changes
9 Performance evaluation 6 Planning
Improve (& 7 Support)

10 Improvement

Make the
changes
8 Operation (& 7 Support)
161
Key Concepts
1. Commitment
• Leadership and support
• Integration into normal roles

2. Clear roles and responsibilities

• Resourced and competent

3. ESO List is the main continual improvement tool

4. Energy Performance Indicators (EnPIs)
5. Communication
6. Change management

162
What to do now
• Report to and Communicate with top management
• Context:
• PESTLE
• SWOT
• Interested parties
• Legal and other requirements
• Risks and opportunities and plans to address them
• Scope and boundaries
• Leadership
• Energy policy
• Roles and Responsibilities
• Support
• Documentation
• Communications

163
Ongoing Support
• Online support platform
• We will add all your names and emails addresses
• Remember everyone in this group can see it (closed outside the group)
• Upload files for review
• Discussion groups
• Webinars
• Webinar 1 in 6 weeks from today
• All the items from the previous slide
• All items to be uploaded 48 hours before the webinar
• Module 2 planning
• In 2 months from now
• You need to complete all module 1 items before then

164
 You now have the EnMS starter pack to start your journey!
Meet with the NCPC support team for assistance
What are YOU going to do?

Source: http://itsvicky.com 165

165
 Next Steps
Agree to go ahead and get commitment
• Management commitment
• Consider certification
• Roles and responsibilities
• Policy
Carry out the planning steps
• Collect data
• Use the spreadsheet tools
• Focus on SEUs
• Implement “no cost” items as soon as possible
• Develop training plans
Carry out the implementation & operation
• Use the spreadsheet tools
• Start reviewing and updating O&M practices

Discuss the above vs your normal EM practice

166
The EnMS Expert Training Programme

ACCELERATING INDUSTRIES' CLIMATE RESPONSE IN SRI LANKA 167

167
Thank You
• Ongoing assistance is available according to contact
details

• Remember: Keep it simple!

• The best of luck with your future efforts to improve your

energy performance!

168
Thank You!
See you in Module 2

169