Sunday, January 28, 2007

Energy Efficiency Without a Capital Budget

Industry’s interest in energy cost control may be outpacing its willingness to invest in energy efficient technologies and equipment. If you think about it, this means cutting energy costs by changing the way we use the same ol’ machinery. Only a heretic would suggest this approach to facility with a strong engineering culture. Yet there are people in industry who are taking a bite out of energy costs through behavioral and procedural change.

If you ask the industrial energy management congoscenti to identify its most accomplished players, every list seems to include Jim Pease of Unilever. Attached to Unilever’s Home & Personal Care division, Jim is a corporate safety, health and environmental compliance advisor for 14 North American sites. In 2000, Jim was tasked with energy cost control, as were many corporate environmental managers around this time. And like many of his peers, Jim’s cost control mandate came with no capital budget support.

Jim’s epic story is captured in a case study that I assembled a few years ago for the Alliance to Save Energy. The primary tool in Jim’s capital-free strategy was a spreadsheet to track actual-to-budget energy consumption, normalized for production levels. In this spreadsheet, current month results are color-coded to instantly show how well a plant is doing: red for overages in excess of 20 percent, yellow for overages 20 percent and below, and green for better-than benchmark performance. All 14 sites could be compared at a glance—a feature that often mobilized friendly competition between sites.

But what about actual energy saving measures? Jim understood that when machines ran unnecessarily, the facility was wasting money, but he needed equipment operators to be aware of that. Instead of taking an adversarial approach, Jim reinforced good energy behavior through an upbeat and sometimes humorous communications campaign. To ensure that he was the bearer of good news, Jim made sure that staff got energy information that was valuable to them at home as well as in the workplace. Messages that were brief and positive, yet frequent, characterized his campaign.

Of course, only so much can be accomplished through behavioral change. But by tracking results and creating a buzz about early results, Jim paved the way for capital investment in subsequent rounds of energy cost control.



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