Sunday, December 09, 2007

What Does an Energy Manager Do?

An industrial energy manager’s job is to protect the organization’s business performance from the risks imposed by today’s volatile energy markets. Depending on the scope of authority vested in such a manager, the job could range from simply administering utility bills to implementing a business plan for continuous energy improvement. The energy manager’s job has implications for the organization’s on-time performance, mechanical integrity, workplace safety, emissions compliance, and the ability to make products that can be marketed as environmentally-benign alternatives.

The energy manager contributes to the organization’s bottom line. A facility’s financial performance can be dramatically impacted by sudden swings in energy expenditures—either due to fuel price spikes or unforeseen mechanical failures. By establishing an energy manager position, a facility explicitly commits to controlling its energy flows, instead of the other way around. A strong energy manager will monetize their company's energy position, showing the costs and benefits of improvements as well as the cost of doing nothing. The energy manager’s regular tasks include:

Hedging against fuel price spikes, which requires the assembly of a procurement portfolio of fixed contracts, options on future fuel purchases, and similar derivatives;

Energy benchmarking, to determine normal rates of energy consumption and energy-to-product ratios;

Goal-setting of plant-wide targets for reducing the volume of energy required per unit of product;

Monitoring and verification of energy flows, from the point of delivery through its end-use application;

Repair and correction when energy consumption data indicate a significant deviation from expected levels;

Training and communications to build organizational knowledge of energy optimization and to sustain the momentum of energy-saving initiatives;

Scouting for new technologies and best practices as presented by trade press and networking forums.

The energy manager concept is relatively new, compared to operations, finance, engineering, and other traditional industrial duties. Accordingly, the energy manager’s agenda requires an unprecedented kind of collaboration from these other departments. Top-level direction is typically a prerequisite for getting these other departments to recognize and support energy management functions. The energy manager needs to muster strong interpersonal and communication skills in addition to technical acumen. If you believe that energy management is all about "projects," you might want to read this.

Before accepting an energy management job, you really should ask what the organization expects the position to accomplish. Here's ten questions to ask the employer. Energy management will require other managers to change the way they do some of their tasks. Operations directors, for example, will participate in the design and implementation of energy performance benchmarks and improvement goals. They will also harmonize their scheduled maintenance calendars so that process equipment and supporting energy systems can be serviced simultaneously. Operations and maintenance directors will work with the energy manager to develop a training calendar and criteria so that staff can obtain energy best-practice knowledge. Finance professionals assist the energy manager by modifying production data to include metrics and ratios that describe energy use. Procurement directors will work with the energy manager to develop purchase criteria that minimize the total cost of equipment ownership. Communications staff will work with the energy manager to recognize innovators and document success stories for replication throughout the organization. Top-level direction ensures facility-wide support energy-related goals.

How much work should be expected of an energy manager? The answer depends on how much time is allocated to the task. The energy manager role might be only a part of one person’s job. Alternatively, the full list of duties may employ more than one person. At the very least, the energy manager should be responsible for energy procurement functions, especially for facilities that make purchases in deregulated electricity markets. The rationale for this is straight-forward: as long as it is in operation, the facility will always purchase energy, even if it has no plans to manage consumption and reduce its waste.

An energy management agenda may be best pursued by a team as opposed to one person. There are several advantages to the team approach:

* The work load is distributed across a number of individuals.

* The energy team can draw its members from operations, finance, maintenance, and procurement—thus ensuring that these departments are properly represented in the energy decision-making process.

* Team membership can be revised over time to bring in new people and build energy knowledge throughout the organization.

* Energy team leadership is an opportunity to get a big-picture understanding of facility operations, and to build skills for managing project implementation, human resources, budgeting, and other activities.

While top-management backing is important, the energy manager also needs to be a strong, visionary communicator who makes the benefits of energy management clear to everyone from the boardroom to the plant floor. A solid understanding of finance and accounting principles will help greatly, although a good working relationship with the finance team will serve the same purpose. The energy manager is able and willing to keep abreast of technical developments in the field, and will take advantage of trade press and professional society membership for this purpose. In sum, it is the ability to contain business risks and capture emerging opportunities that makes the energy manager position truly effective.



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