Tuesday, January 15, 2008

Energy Efficiency Assistance Programs in 2008

As 2008 gets underway, a number of states, provinces, utilities, and trade associations are gearing up a variety of programs to help their commercial constituents get a handle on energy costs and carbon emissions. The timing for this is good: the economic penalty to a business that refuses to control energy waste goes up as energy prices increase (which they are) and as interest rates decline (which they are).

My only concern is with well-intentioned program designers who are not learning from the past. A number of earlier industrial energy efficiency programs fell flat for reasons that now seem deceptively obvious:

Lack of two-way dialogue. Many energy programs in the past came off as arrogant (“Stop doing what you’re doing and do what we tell you.”) These programs not only pre-supposed the solutions, but expected all of industry to come at once for help. Today’s efficiency proponents need to better understand what businesses currently need, energy-related or otherwise. Strategic challenges include competitive cost pressures, workplace safety, regulatory compliance, asset reliability, and a chronic shortage of time. Efficiency proponents need to describe how energy efficiency helps to alleviate these and other business challenges.

Lack of facility-wide understanding. Just because you send a maintenance engineer to an energy workshop doesn’t mean that the rest of his or her organization gets the same message. Those steam, motor, and compressed air workshops—as good and as necessary as they are—do nothing to address the behavioral and procedural barriers to creating durable change. The traditional engineer-to-engineer dialogue needs to be supported by an executive-level dialogue—one that answers the question “What’s in it for me?”

Lack of context. Energy costs are not the only challenge that executives face. Energy program proponents are one of many voices competing for executive attention. Companies are likely to respond individually, over time, to the promotion of energy efficiency. A company’s progress in becoming energy-efficient will depend on competing priorities both outside the firm (economic conditions) and inside the firm (management crises/issues). Barring the need to offset acute energy market disruption, like that experienced during the hurricane season of 2005, programs that promote business-sector energy efficiency can expect to accumulate results over a period of years, not months.

The challenge for energy efficiency proponents is to initiate an assistance relationship with interested facilities. Fortunately, energy efficiency can be combined with other issues that top managers will more readily notice. Energy agencies should anticipate partnering with other policy groups, including those that represent economic development, environmental compliance, or disaster preparedness. The efficiency proponents’ biggest opportunity may be to collaborate with allied policy groups. Together, they can shape comprehensive assistance initiatives that truly motivate businesses to take action.



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