• What is energy and carbon management? It is the continuous process of measuring, understanding and optimising energy consumption and greenhouse gas (GHG)The seven direct greenhouse gases under the Kyoto Protocol are: carbon dioxide (CO2), methane (CH4), nitrous oxide (N2O), hydrofluorocarbons (HFCs), perfluorocarbons (PFCs), sulphur hexafluoride (SF6), nitrogen trifluoride (NF3). They absorb the infrared radiation emitted by the Earth and cause the surface temperature to rise. emissions within an organisation. The goal is to ensure that energy delivers services such as heat, light or power with optimum efficiency to aid the minimisation of energy use and resultant emissions, overall aiming to improve environmental and sustainable effectiveness.
• What are the guiding principles for energy and carbon management? There are several principles for managing energy and carbon: concepts like the energy hierarchy, and international standards such as ISO50001 for energy management and ISO 14064 or GHG Protocol for carbon management.

Energy and carbon managements are the continuous processes of measuring, understanding and optimising energy consumption and greenhouse gas (GHG) emissions, primarily carbon dioxide (CO2), respectively within an organisation.

The processes are inherently linked, as GHGs emissions from energy use constitute a significant part of the total emissions for most organisations. Hence, this guide embraces a combined approach and uses a term “energy and carbon management”, highlighting distinctive characteristics of each of the processes when relevant.

Both energy and carbon managements are key components of an even broader environmental Environmental management consist of decisions and actions concerning policy and practice regarding how resources and the environment are appraised protected, allocated, developed, used, rehabilitated, remediated, and restored. Source: I. Petrosillo, R. Aretano, G. Zurlini, Socioecological Systems, in: Encyclopedia of Ecology, Volume 4, 2015, Pages 419-425. and sustainability managementSustainability embraces simultaneously economic, social and environmental objectives and impacts. It involves a very wide range of issues, including food and water availability, resources use and depletion, poverty, economic growth, social cohesion, community engagement, production and consumption, climate change, population growth, and international security. Source: The Energy Hierarchy: Supporting policy making for 'net zero', Institution for Mechanical Engineers..

Energy and carbon management is a part of an organisation’s response to climate change, energy prices, and security of supply. It involves elements of engineering, business and project managements, accountancy, marketing, psychology and other disciplines. It requires an understanding of how to manage different activities causing GHG emissions and knowledge about advantages and disadvantages of different energy supply sources. Fundamentally, it is about understanding and incorporating energy and carbon data into strategic business decision-making.

Energy management enables an organisation to improve its energy use systematically, rather than via ad-hoc projects. It should involve all interactions with energy, from procurement and purchasing strategies to equipment upgrades and behavioural changes.

At the heart of energy management is energy efficiency: using less energy to produce the same – or greater – economic output. For many organisations energy efficiency has become the first tool to reduce energy demand and lower business costs.

Importantly, optimising energy use is recognised as the first step to reducing carbon emissions and helping reduce the effect of global climate change. When the energy comes from fossil fuels, successful energy management will directly reduce GHGs emissions.  Small changes can lead to big savings: for example, in 2017, global use of LED lights in place of older technology reduced carbon emissions by 570 million tonnes, nearly 2% of total emissions. Investments in building fabric improvements, efficient heating, ventilation and air conditioning (HVAC) systems or boilers could lead to carbon emission reductions on a similar or even greater scale.

Guiding principles for energy and carbon management

Here are some of the principles and practices which can help organisations fulfil regulatory obligations, observe environmental standards, and meet the expectations of investors:

Energy hierarchy

The main routes to reducing energy demand and GHG emissions can be considered as a hierarchy of measures. First, energy demand reduction and efficiency improvement measures; where possible, switching to low-carbon energy sources such as renewable electricity, hydrogen or nuclear; and lastly where the energy source cannot be made low-carbon, carbon abatement and offsetting.

The energy hierarchy offers an effective approach to guide sustainable energy decision-making. The cheapest and greenest energy is that which we don’t use. Typical energy and carbon management starts by considering energy demand reduction and improving energy efficiency before different types of energy supply are considered. The optimum energy and carbon reduction pathway for each organisation will be different depending on emissions sources, location, and other individual factors.

Energy management system: International Standard (ISO) 50001

A framework to support efficient use of energy within an organisation is provided by the International Standard (ISO) 50001. It specifies how to establish, implement, maintain and improve an Energy Management System (EnMS) to holistically and systematically improve an organisation’s energy performance.

The EnMS is based on the ‘Plan-Do-Check-Act’ cycle, the backbone of many management practices:

Greenhouse gas reporting: International Standard ISO14064

The international GHGs emissions accounting standard ISO 14064 provides governments, local administrations, businesses, and other organisations with a guidance on how they can account for their emissions, including setting up a system to track, monitor, report and verify their emissions.

Greenhouse Gas (GHG) Protocol

The Greenhouse Gas Protocol Corporate Accounting and Reporting Standard is the internationally recognised guide to accounting for, managing and reporting organisational GHG emissions, as well as identifying emission reduction projects. It establishes important concepts regarding the boundaries and sources of carbon management. Learn more about the categories of emissions in How to collect energy and carbon data.

Science-Based Targets

The Science-Based Targets initiative support organisations committed to reduce emissions in line with the Paris Agreement goals – limiting global warming to well-below 2°C above pre-industrial levels and pursuing efforts to limit warming to 1.5°C. For example, the Energy Institute’s science-based targets are to reduce its emissions by almost 68% by 2030.

Want to know more? More detailed information is available in our online training course, Level 1, Certificate in Energy Management Essentials. To learn more, visit Energy Management Training | Energy Institute

• Why do organisations need dedicated energy and carbon management? There are a range of legal, financial, organisational and ethical drivers that motivate organisations to manage their energy use and GHG emissions.

An effective energy and carbon management strategy requires commitment and action from an organisation’s senior leadership. For many organisations, formalising the process can represent a significant cultural change; employees on any level in organisation hierarchy might not appreciate the scale of wasted energy, or the financial and environmental implications of energy use.

It is, therefore, important for an energy and carbon manager to develop a strong and persuasive business case which will help an organisation’s senior leaders understand the importance of energy and carbon management and how it can support business resilience against volatile energy prices, among other benefits.

It should be based on the following business drivers:

Regulatory compliance and reporting:

One of the key priorities of an energy and carbon manager is to ensure that all relevant laws, regulations and industry-specific standards are complied with. Some organisations are subject to international, national or other energy policies and regulations. For example, in the UK these might include the Energy Savings Opportunity Scheme (ESOS) or Streamlined Energy and Carbon Reporting (SECR), Building Regulations (especially Part L), Global net zero commitments or national energy efficiency performance standards and/or energy labels.

As governments continue to introduce legislation and regulations to address climate change, early adoption of energy and carbon management can mitigate against future climate-related risks and take advantage of related business opportunities. Unless an organisation is obliged under specific legislation, the public disclosure of energy use or carbon footprint is usually optional. However, there are tangible business benefits to be gained from disclosure and public reporting, such as improved customer trust or boosted competitive advantage.

Cost saving:

The rise of energy prices, and their increasing volatility, may significantly impact a company’s financial position. Another critical role for an energy and carbon manager is to buy energy effectively and use it efficiently. This can minimise an organisation’s exposure to energy cost-related risks and control utility bills.

The Carbon Trust has estimated that most organisations can save 20% on their energy bills by managing use and investing in cost-effective energy efficiency measures. 5-10% can still be saved if they limit their programmes to low/no cost measures, such as staff awareness training, changing habits or simple automation.

Additionally, reducing emissions can limit operational costs. Some companies capitalise on emissions by putting an internal price on carbon. It places a monetary value on GHGs emissions, which they can then factor into investment decisions and business operations. The use of internal carbon pricing is to achieve one or more of three key objectives: driving low-carbon investment, improving energy efficiency, and changing internal behaviour in an organisation. According to CDP (formerly the Carbon Disclosure Project), as of 2020 more than 2,000 companies worldwide are either using or planning to use an internal carbon price.

Improved property value:

Numerous studies show that compared to typical buildings, energy efficient buildings demonstrate higher asset value (sale prices from 1% to 31% higher ), higher rent (rental premiums 3% to 16% higher) and higher occupancy rate (occupancy levels up to 10% higher).

Boosted reputation:

A strong energy and carbon management system could be one of the best ways to incorporate ESG (environmental, social, governance) factors into an organisation’s strategy. As ESG increasingly influences capital expenditure and operations, a system that manages energy use and emissions reduction demonstrates good practice to both customers and shareholders. It can benefit the wider reputation of an organisation, raise its profile, and help the organisation gain a competitive advantage in the market.

Involving people:

An energy efficient and carbon concerned organisational culture can help enhance an organisation’s reputation not only in the eyes of customers and stakeholders, but also its employees. Staff engagement is an important task for energy and carbon managers. Behavioural change among employees is a key way to achieve an organisation’s sustainability targets. It may also increase employees’ work satisfaction and attract new talent.  

By identifying energy-ineffective practices and equipment, and adjusting accordingly, an organisation can also improve non-energy aspects of its operations, such as productivity levels, health and safety, and equipment performance. For instance, a review of office building lighting can reduce energy consumption whilst also improving light quality. This leads to better working conditions, which can increase employee productivity.

Want to know more? More detailed information is available in our online training course, Level 1, Certificate in Energy Management Essentials. To learn more, visit Energy Management Training | Energy Institute

• Organisational boundaries and scopes of emissions define what data should be included when managing an organisation’s energy and GHG emissions.
• Calculating a carbon footprint involves multiplying a documented emission factor with the activity data for the emission source.

The popular saying that ‘you can’t manage what you don’t measure’ is particularly appropriate for overseeing energy consumption and GHGs   emissions in an organisation. Accurate, trusted and transparent data is the fundamental basis for effective energy and carbon management. An organisation can only make smart decisions about energy procurement, improve efficiency of buildings, processes and equipment, detect avoidable energy waste or cut their emissions if they know how they use energy and how much direct and indirect GHG emissions are produced.

What data to include? Determining boundaries and scopes of coverage

Before starting to collect energy and carbon data, it is crucial to define the organisational and operational boundaries for such data collection, i.e., what should be included and what can be excluded. When setting the organisational boundaries, either an equity share approach or control approach, the latter defined in either financial or operational terms, could be followed.

Unless an organisation has a very complex structure, the operational control approach is recommended to determine the boundaries. If the company has many subsidiaries, joint ventures or leased assets, then establishing the boundaries may be more complicated, and following either the financial control, or the equity approach may be more appropriate.

Once the organisational boundary is defined, then the scope can be determined, specifying the emission sources that will be included in calculating the organisation’s carbon footprint.

The Greenhouse Gas Protocol defines three scopes of emissions:

Collecting carbon and energy data

Once the boundaries and scope of energy and carbon to be measured are determined, the process of collecting that data can begin. Careful validation during the data collection is essential as it will allow an energy and carbon manager to effectively carry out all the other relevant practices.

Energy consumption and emissions data should be collected from utility meters, automatic metering, vehicle fleet fuel records, invoices, including bills for purchased good or employees’ business trips and other sources as applicable.

Additionally, data on the relevant variables that may drive energy consumption should be also reviewed, for example weatherExternal temperature is the dominant influence on the consumption of energy for space heating and cooling. External temperature data can be converted into “degree day” values, which provide a measure of how cold or hot the external temperature was in a given place over a particular period such as a week or month. Most up-to-date regional average monthly and annual degree-day (and cooling degree day) values are available free of charge from various internet sources including Heating & Cooling Degree Days – Free Worldwide Data Calculation or production throughput.

During collection and input of the data, checks should be made to confirm the accuracy, completeness and quality of the data.

Data analysis

Data analysis should, among other things, enable an energy and carbon manager to:

• Establish current energy consumption and emissions positions
• Identify trends in energy consumptions and emissions production
• Compare current energy consumption and emissions production with historical data and benchmarks
• Compare current energy consumption and emissions production against set targets, that should be challenging but realistic and achievable
• Detect avoidable energy waste
• Measure the effectiveness of energy efficiency projects
• Identify areas for further investigation and action prompted by unexpected patterns of consumption
• Set future targets
• Plan future actions to reduce energy consumption and emissions

Calculating carbon footprint

A carbon footprint is the amount of carbon dioxide (CO2) or carbon dioxide equivalent (CO2-eq) emissions associated with an activity.  It is typically measured over a 12-month period. When choosing the period for measurement, it is best to take into account organisational reporting cycles, which can be used to set the timeframe.

The most common method for calculating the amount of GHGs emitted from a certain source is by multiplying a documented conversion factor States how many kg of CO2/CO2e gas is emitted for every kWh of fuel combusted. Different fuels have different emission factors; those with high carbon content will have a higher emission factor than those with a low carbon content. Hence, coal has a higher emission factor than natural gas, known also as an emission factor, with the activity data This is data related to the activity that is causing the emission of a greenhouse gas. The data is usually derived from utility invoices and receipts. For example, if calculating the Scope 1 emission for a natural gas heating boiler the activity data will be kWh of gas; if calculating the Scope 3 emission for airline travel, the activity data would be flight distance kilometres for the emission source, measured in units. Such activity data could include fuel consumption from combustion (direct emissions), electricity consumption from purchased electricity (indirect emissions) or flight type and distance for air travel (indirect emissions). Consideration must be taken to ensure the units for the activity data and the emission factor are the same as this avoids an error commonly found in carbon footprint calculations.

For example, GHG emissions for 500 kWh of electricity billed in the UK, based on the government-issued GHG conversion factors for 2022 would be:

Activity data (500 kWh) x Conversion factor (0.19338 kgCO₂e/kWh) = 96.69kg CO₂e

To compile the total carbon footprint, all emissions should be added up within their respective scope (totals for Scopes 1, 2 and 3 ).

• World conversion factors are published by International Energy Agency
• Conversion factors for GHG reporting in the UK are updated each year

It is important to use a consistent method to ensure an accurate result, particularly if several people will be working on collecting and interpreting the data. The GHG Protocol site provides several tools to calculate emissions in specific industry sectors such as oil and gas, aluminium, cement and a guide for small office-based organisations. The benefit of using these tools is that they have been subject to review by many companies and experts and therefore, they should represent the current best practice.

Want to know more? More detailed information is available in our online training course, Level 1, Certificate in Energy Management Essentials. To learn more, visit Energy Management Training | Energy Institute

• Behaviour change is understood as targeting attitudes, behaviours and decisions implemented by those who influence energy performance as well as those who have direct hands-on control of equipment and systems.
• Energy Conscious Organisation (EnCO) is a framework that helps to incorporate people measures into energy management strategies and plans.

A crucial part of any energy and carbon management activity is to excite behaviour change to reduce energy waste and emissions across an organisation’s facilities and operations. It is also to increase awareness about the connection between energy and services such as lighting, heating, transport, hot water, cooling, entertainment, etc.

The ability of an energy and carbon manager to inspire and influence people is just as important as technical or engineering skills. Changing to a more energy and emissions conscious culture means people inevitably must modify their own habits and ways of working. Hence, those managing energy and carbon in an organisation must be prepared for some reluctance. The benefits of any changes should be clearly demonstrated to everyone in the organisation for them to make a lasting difference.

Energy Conscious Organisation

Energy Conscious Organisation (EnCO) is a framework that helps to incorporate people measures into energy management strategies and plans. The aim is to inspire and equip enough colleagues to challenge the norm and to encourage widespread adoption of energy efficiency good practices throughout the organisation. At the heart of the EnCO framework is the EnCO Matrix which can be used to review the effectiveness of an approach across five key pillars: engagement, alertness, skills, recognition and adaption. The matrix facilitates conversations about current levels of energy performance in the organisation, opportunities and challenges. It helps to focus on capabilities, awareness and motivations to change behaviour.

The internal conversations about the matrix grid help to establish a visual profile of an organisation, which facilitate development of a suitable energy use strategy.

Opportunities and motivation to change behaviour

Behaviour change is understood as targeting attitudes, behaviours and decisions implemented by those who influence energy performance as well as those who have direct hands-on control of equipment and systems. A good energy and carbon manager will aptly balance between behaviour change and usage of relevant technologies in an organisation. They will know that implementing the right behaviour change framework reduces the risk of technological solution failures and enhances the legacy benefits of technology investments.

Assessment of the scope

One of the most important prerequisites for a successful behaviour changing programme is an assessment of the scope of making energy savings and emissions reductions through people.

The scope could be assessed by internal conversations, surveys, interviews, or innovation trials. It can also be partially achieved by conducting simple walkabouts, looking for opportunities to save energy through good housekeeping. An energy and carbon manager should also identify those whose actions have a particularly significant impact on energy consumption and emissions production.

At this stage, it is desirable to establish the commitment of top management, how skilled in energy and carbon management employees are at any level of the organisation and whether energy and carbon policies and procedures are in place.

Establishing the level of awareness and motivation

It is important to understand how much influence staff have on energy usage and emissions production. Their level of knowledge, alertness and awareness, as well as motivation and recognition of the benefits of energy and carbon management need to be established.

To find out the current level of awareness and motivation, as well as to identify priority actions or areas for improvement, it is useful to ask the below questions, either via questionnaires or in conversations:

It is relatively easy to increase awareness about the benefits of energy and carbon management, for example through training. Increasing motivation is usually harder to achieve.

Developing a behaviour changing campaign

Setting goals

A fundamental building block for raising awareness and motivation is development of an organisation’s energy policy. In many cases it is a requirement to publish or revise energy policy that prompts a behaviour changing campaign.

The energy policy should include:

• The policy statement: it sets out an organisation’s commitment to energy efficiency and carbon management. Most importantly, it must be endorsed by top management and be fully supported by all levels of management. The high-level policy statement should be supported by a detailed action plan.
• The expected quantified objectives or results: they can be expressed in a variety of ways, for example, reduction in energy consumption, energy cost savings, reductions in CO2 emissions or increased awareness measured before or after assessment of the scope. It is often useful to align the energy and carbon objectives with the wider corporate objectives or targets, all the while relating these to energy and carbon.
• Project milestones: specific milestone outcomes to be met along the way in a logical flow to achieve the overall objective. The outcomes should be realistically framed, so that they are achievable within the time frame of the campaign. They should be also logically linked and build on each other. Targets always have a much greater impact if presented in a way that is understandable and relevant to staff, such as a reduction in energy cost per unit of production or per employee.

People/resources

It is important to define the key roles for a campaign and fill them with the most appropriate people.

A small team of four or five people could be formed and might consist of:

• Chairman or Chief Executive Officer - whoever has the most senior position in the organisation should be recruited to add weight to the campaign. It is important that the CEO commits themself to energy and carbon management. This is best done visibly and publicly perhaps with the CEO launching the campaign, by putting their signature to energy awareness literature and keeping energy efficiency on the agenda of key management meetings. It should be expected from those in the position of authority to help with the removal of organisational issues or bottlenecks and to take 'actions' forward.
• Energy and Carbon Champion/Director - a key role filled by someone who would take top level responsibility for the campaign, act as a driving force for change, ensure the campaign is on the agenda of managers, and hold people accountable.
• Campaign Manager - a pivotal role that involves taking responsibility for the design and management of the campaign on a day-to-day basis.
• Response Resource - a role dedicated to responding to ideas, suggestions and questions generated by the campaign.
• Possibly one or two others to support the campaign manager.

Identifying the target audiences

It is important to identify specific target audiences and decide what response is needed from them to make savings. For example, support is critical from senior management, but the actual savings will come mainly from the actions taken by plant operators and maintenance staff.

The following table is an example of how to identify the key target audiences in the organisation. A score between 1 and 5 (score 5 for highest and 1 for lowest) should be allocated for their influence and potential contribution to savings. Then the four most important groups should be identified and recruited to support the behaviour change initiative.

As pointed out by human behaviour experts, for behaviour change to be successful and enduring, at least 2-5% of the population needs to be involved. It means, that for an organisation with say 500 employees, it’s desirable to engage 25+ employees and involve them in better energy use.

The ideal though is to create an organisation full of ‘energy champions’ who appreciate how to get the best out of their energy-consuming equipment, how to minimise energy waste and reduce GHG emissions.

Messages, language and communication tools

It is vital to develop the right messages, use persuasive and appealing language and choose the right methods of communication.

For example, the message can be developed around budget savings, or concentrated on the environmental benefits, or both. It should be simple, appropriate to the people receiving them and in a language they can understand and associate with. It needs to be remembered, that people may not respond well to just being told to save energy and reduce emissions. For example, the message “Switch off lights when you leave the office” without the reason and benefits behind the request may be met with apathy or even resentment. The approach should be to motivate people by selling them the underlying reasons.

The methods chosen to communicate an energy saving and carbon reduction message will vary according to many factors such as the type, size and culture of an organisation or the budget available.

The below table provides examples of various communication routes.

Maintaining momentum

It is critical to remember that awareness campaigns themselves do not change behaviour. For them to be effective, they need to be a part of an integrated approach.

To sustain continued success, feedback about the progress made should be sent regularly to the staff, using the communication routes that have been identified as the best to share information; one size is unlikely to fit all.

At the same time, an energy and carbon manager should intently listen to ideas and comments from their colleagues who have new suggestions on how to save energy and reduce emissions. Feedback on these suggestions should be delivered and appropriate actions taken.

The longer the activity runs the better ingrained the messages will become in employees’ minds, thus increasing the likelihood that they will effect a change in the organisational culture. However, it must be ensured that the campaign and the messages do not become stale.

Experts in behaviour change point at enablement as a defining factor of the more successful behaviour change programmes, i.e., increase means and reduce barriers to increase capability or opportunity, via techniques such as empowerment, increased local responsibility (of equipment), balanced score cards to manage priorities and hands on support.

Another technique to maintain the momentum could be through emphasising role modelling/social norms that provide examples for people to aspire to or imitate. This can draw on case studies, recognition and reward or opinion leaders to create new habits. This can also refer to social incentives, for example by allocating some portion of energy savings to good causes such as charitable donation, away day etc.

Organisations can also improve their workplace culture by showing staff how to save energy costs at home, for example by using the EI’s EnergyAware tool which helps improve energy literacy.

Overall, a long-term aim should be to integrate "energy efficiency" into organisation culture. By integrating energy efficiency into quality or health and safety procedures, staff induction courses, staff performance appraisals and wider environmental initiatives, energy efficiency can become “built” into the company operations and culture. This can help avoid the short-lived campaign-based approach.

Want to know more? More detailed information is available in our online training course, Level 1, Certificate in Energy Management Essentials and Energy Conscious Organisation’s resources. To learn more, visit Energy Management Training | Energy Institute and Resources | Energy Conscious Organisation, by Energy Services & Technology Association (ESTA) and Energy Institute (EI).

• Energy technologies, whether they are energy-efficient products, renewable energy technologies or smart management tools, are part of the balanced, integrated approach to energy and carbon management.
• The Register of Professional Energy Consultants (RPEC) is one of many sources of expertise about the suitability and effectiveness of different technological solutions.

An integrated approach to energy and carbon management should find a correct balance between data analysis, behaviour change programmes, and energy products and technologies.

Not all energy waste and GHG emissions can be attributed to practices of individuals. It may well be caused by the failure or degrading performance of energy-consuming equipment.

As with a vehicle you should follow the manufacturer’s guidelines on regular servicing every 6 - 12 months or so many thousands of miles, energy consuming equipment should be also regularly assessed and serviced.

There is no one size fits all solution; the skills and knowledge of an energy and carbon manager are called upon to measure the benefits of various options to optimise energy-consuming, supplying or monitoring products, whether its maintenance, refurbishment, replacement or investment in additional equipment.

Energy-efficient equipment

An energy and carbon manager should determine which energy-efficient solutions and products are available and suitable for their organisation, the potential for improvements and what an organisation can afford.

For example, heating consumes large amounts of energy in non-domestic (commercial, public and industrial) buildings and accounts for a high proportion of the total GHG emissions. There are significant opportunities to improve heating efficiency and reduce emissions, such as heat pumps that can generate heat from ambient conditions or biomass boilers that burn solid biomass fuels.

Among numerous channels of information about suitability and effectiveness of different products are technical experience of external consultants, trade associations, for example the Register of Professional Energy Consultants (RPEC) and the Energy Services and Technology Association (ESTA), feedback garnered from exhibitions, articles in technical journals, or trade magazines.

There is no universal list of recommendations or guides. In the UK, the Government publishes the Energy Technology List (ETL), which features 10,000 energy efficiency products across 20 different technology categories, for example:

• Combined heat and power (CHP) - the simultaneous generation of heat and power (usually electricity) in a single process.
• Heat pumps - devices that either absorb heat from the outside air (air-source heat pump) or use pipes buried in the ground to extract heat from the ground (ground-source heat pump).
• Heating, ventilation and air-conditioning (HVAC) equipment
• Lighting – covering LED technologies and lighting controls products
• Radiant and warm air heaters - Warm air heating equipment provides space heating using the heat generated by a burner, while radiant heat products heat people or objects without heating the surrounding air
• Other

There are numerous similar initiatives, for example:

• Appliances & equipment report and data sets by IEA
• The IEA’s Energy-Efficient End-use Equipment (4E) initiative – the international technology collaboration programme to share information and transfer experience in the field of energy-efficient appliances and equipment.
• The IEA ETP Clean Energy Technology Guide that contains information about over 500 individual technology designs and components across the whole energy system that contribute to achieving the goal of net-zero emissions.
• Equipment and technology guides maintained by the Australian government.
• Building Technologies Office Projects Map maintained by the US government.
• The Super-Efficient Equipment and Appliance Deployment (SEAD) Initiative - a collaboration of more than 20 governments, the IEA and other partners to accelerate and strengthen the design and implementation of energy efficiency policies for appliances and equipment.

Renewable energy technologies

Renewable energy sources reduce an organisation’s carbon emissions when they replace other supply sources that cause GHG emissions. They can also improve fuel security and to varying degrees, depending upon the technology and incentive schemes, reduce energy costs. A short payback period can be achieved when applying the right technology to the right application.

For example, installing a 500 kW wind turbine in the grounds of a commercial building free from obstructions and with generous wind resources can enable a simple payback period of the order of 5 years to be achieved, assuming eligibility for renewable energy incentive schemes. Similarly, installing a biomass warm air heater to replace an aging gas-fired warm air heater in a factory with a clean waste wood supply can lead to a similarly short payback period.

However, not all situations are as suitable for the installation of renewable energy technologies. It is their carbon emission reduction and ESG characteristics that explain their established and growing uptake rather than their ability to provide a significant return on investment.

Before considering which renewable energy technology to apply, it is best practice to reduce energy requirements, improve the efficiency with which energy is used and recover waste energy wherever it is viable. Following this, the choice of which renewable to use depends upon the needs of a building and its occupants. It is important to carefully consider the financial viability of renewables.

Tools for the energy and carbon manager

A separate category is the technological support of energy and carbon management itself.

The effective use of these technologies will allow an energy and carbon manager to, among other things, monitor energy consumption and detect avoidable energy waste, provide real-time control adjustment, quantify the energy savings and reduce energy costs.

Automatic Monitoring and Targeting (aM&T)

Automatic Monitoring and Targeting (aM&T) equipment gathers and collates energy consumption data, records and distributes metered energy data, analyses and reports energy consumption data and displays the findings. It is particularly useful for organisations with large property portfolios.

It is estimated that this technology can help customers to identify energy savings of 4 to 20% or more, with average cost savings of 10 to 15%.

The benefits of aM&T equipment are:

• Data collection at the same time(s) each day
• No (or minimal) human error
• Reliability
• Automatic analysis of data
• Automatic reporting at set periods
• Automatic generation of an exception report prompting a quick remedial action

Building Energy Management System (BEMS)

A Building Energy Management System (BEMS) is an all-encompassing computerised system designed to act as a centralised building operating system that assists with monitoring, controlling and optimising the energy consumption of devices such as lighting, HVAC or power system used in buildings. The control of these directly affects the energy consumed in the building and the comfort of the building’s occupants. It uses inputs, such as temperature sensors, to obtain information and outputs, such as on/off devices, to control equipment.

This is a highly effective solution in a complex building or a site of many buildings. BEMS offers an energy manager the opportunity for centralised monitoring and dynamic control of large systems and processes. Its control technologies allow the amalgamation, integration, automation and optimisation of all required processes and equipment.

Data logging is a key element of a BEMS. It is the process of gathering, classifying and recording various significant data: for example, environmental parameters such as temperature and humidity levels.

Want to know more? More detailed information is available in our online training course, Level 1, Certificate in Energy Management Essentials. To learn more, visit Energy Management Training | Energy Institute.

• Energy and carbon management solutions are typically classified according to three capital cost categories: zero, low cost or high/capital cost.
• There are several common investment criteria, for example Simple Payback, Internal Rate of Return or Net Present Value that should be employed to decide on the commercial merits of a chosen solution.

Some energy and carbon management solutions may be low-cost while others will require a considerable investment. An energy and carbon manager should estimate the implementation cost of every identified project. This should include both the initial capital investment (if needed) and the ongoing operational expenses.

Often projects are prioritised according to three capital cost categories: no/zero cost, low cost and high capital cost.

Zero cost indicates simple, corrective measures that usually involve effort, rather than funds, to change habits and methodologies.

Low cost suggests a degree of annual ‘revenue expenditure’ in the form of training and maintenance funded from training and maintenance budgets to improve the operation of equipment by staff.

High capital cost and future investment signposts that senior management permission, support, and funding will be required to carry out the delivery of the specifically identified solution. The high-cost projects will normally have to be planned into capital budget provisions rather than from annual revenue budgets.

Low- or no-cost opportunities, such as behavioural change measures, are expected to generate net financial gains early on. Therefore, normally, low- or no-cost opportunities are evaluated using a simple payback approach, i.e., the number of years during which savings on the energy bill are needed to payback all additional costs.

High-cost opportunities should be looked at from a life-cycle perspective where the upfront investment is set against the energy and cost savings over the life of the intervention.

Examples of energy and carbon saving expenditures (split by the cost categories)

Finding the right solution

There is no one size fits all solution and what is a low-cost item to one organisation may be a high-cost item to another.

However, the key is to calculate the average actual running and operational costs of any existing equipment. Checks can then be made to decide if this equipment works as expected and as designed. If not, then maintenance may be the first solution. If the results of the calculations indicate that there is room for improvement, then the next approach is to consider refurbishments or replacement. Both options have a cost, so this must be balanced against the likely saving that could be made with the alternative.

As long as the financial and technical resources of an organisation are sufficient, then an energy and carbon manager can carry out final benefits analysis based on kWh saved and any other relevant barometers and see whether this indicates that the replacement will cover its costs within an acceptable time scale for the business.

Tools employed can be as straightforward as a simple payback period, which involves savings being equal to the cost over a specified timeline. However, this approach fails to recognise the true time base value of money. Hence other calculation methodologies could be employed, such as Internal Rate of Return (IRR), Net Present Value (NPV) and others, to decide on the commercial merits.

Common investment criteria

Simple Payback is the most common criterion for evaluating a project. It is simply the cost in comparison to the cost benefit. It acts as a quick snapshot of how quickly a project or change is going to pay itself back.

Discounted cash flow is a valuation method used to estimate the attractiveness of an investment opportunity. It has the purpose of providing an estimate for the money that would be received from an investment and to adjust it for its time value. In other words, if an organisation employs their money elsewhere, would they receive a better return? If the discounted cash flow is higher than the current financial projections, then it will be seen as a good opportunity.

Net Present Value is used to establish the profitability of a project over its lifetime or over a set period. It is the difference between the present value of cash inflows and the present value of cash outflows. It uses the premise that £1 today is not worth the same as £1 tomorrow. A positive value would indicate that the value in the project will not be eroded by the drop in the value of money over time (and a negative value would indicate the opposite).

Internal Rate of Return of a project makes the net present value of all cash flows from a particular project equal to zero. It may be perceived as the rate of growth a project is expected to generate. This can then be compared with other projects of competing budgets (or similar or different nature) or compared with prevailing rates offered for either savings or investments elsewhere.

Life Cycle Costing (or whole life cycle costing) is an assessment of the total costs involved in a project over its lifetime. As such, it takes into consideration all the cost benefits available from implementing a project. In some cases, it is not just an energy benefit but also incorporates others, for example reduction in maintenance costs or reduction in other operating costs.

Cost of not acting

When evaluating opportunities, it is important to consider the cost of not acting. This involves looking at likely future energy prices, the price of carbon, the benefits of improved environmental reputation, and any other benefits that can be valued. If an opportunity or a package of opportunities is not progressed, this may result in the organisation paying more over time in energy bills and other costs or lost revenue.

Want to know more? More detailed information is available in our online training course, Level 1, Certificate in Energy Management Essentials and Energy Conscious Organisation’s resources. To learn more, visit Energy Management Training | Energy Institute and Resources | Energy Conscious Organisation, by Energy Services & Technology Association (ESTA) and Energy Institute (EI).

• By reporting energy and carbon activities, organisations should identify and investigate problems concerned with policy, organisation, procedures and methods, recommending appropriate action and helping to implement these recommendations.
• Disclosure of energy usage and GHG emissions may be required by law or voluntary, and can uphold an organisation’s sustainability credentials, customers’ confidence and attract more investment.

Internal energy and carbon report

Reporting the findings and presenting the case for improvements is an essential deliverable of energy and carbon data collection and analysis.

It is through reporting that the description of the data analysis findings is provided, as well as the rationale for change and the next steps to implementation. It is important to get the message across to the target audience, e.g., a senior management team, clearly and succinctly, as it is generally the information provided in the report that provides the basis for any change.

The report should identify and investigate problems concerned with policy, organisation, procedures and methods, recommend appropriate action to the senior management team, help to implement these recommendations and influence the behaviour change in the organisation.

A typical energy and carbon report should include:

• Executive Summary
• Introduction
• Action plan/tables of recommendations
• Energy usage/consumption/audit
• Energy and carbon management information
• Energy and carbon reduction opportunities
• Conclusions and findings

Executive summary should be as concise as possible and suitable for non-technical managers. Typically, the executive summary should contain:

• A statement covering the organisation’s current energy consumption and carbon footprint.
• A statement covering the energy, cost and carbon savings, that can be expected if all the recommendations are implemented.
• If there is an energy consumption and emissions target, it may be worth including the impact the opportunities would have on this.
• Benchmark information relevant to the organisation.
• A statement that reminds the organisation of any specific risks, or uncertainties, that might lead to uncertainty in the outcome, for example, if the estimates have been based on limited or missing information.

Introduction should set the tone for the energy and carbon report. As such, it should contain a few key features and inform the readers of what they are going to read in the rest of the report.

It should include, among other things:

• The aims
• The scope
• The sources of information
• What is going to be included in the report
• Any exclusions and why
• Details/overview of the organisation
• One or two paragraphs on site operations, location, age, operating hours, number of employees and some measure of scale that can be used to calculate benchmarks (floor area, number of buildings, production units, and so on)
• Organisational issues that affect energy use and carbon emissions

Action plan/tables of recommendations - it is common for the recommendations to be summarised in a table. Measures can be summarised and ranked in as much detail as the data allows. They are commonly grouped by payback and by scale (no/low cost, medium cost and high-cost items).

Energy usage/consumption/audit - this section should relate closely to the data collection and analysis. Most of the information in this part should be presented in tables, graphs and figures. Typically, the annual energy consumption, spending and the GHG impact is provided in a table and shown by fuel type. The table should be provided with notes which will describe the source of the data used, the time period, the average unit cost in the period and any limitation with the data used.

Other features that are useful in this section include:

• A chart/diagram of the energy consumption breakdown
• A description of the main fuel types and where each is consumed
• A description of the performance against the previous year(s)
• Any aspects that have changed (for example fuel switching in heating or additional cooling added)
• Monthly and/or weekly consumption (generally in a graph format) for each fuel source
• Degree day analysis or cooling day analysis
• Electricity or gas profiles
• Benchmarking; either relative or absolute or both
• Review of electricity capacity factor, power factor, maximum demand, and half-hourly demand data (profiles, weekday and weekend use, time of day use, vacant energy use)
• Review of any sub-metering data

Energy and carbon management information – this part should provide a description of facts and observations, and then provide some form of improvement plan. The following areas are identified as part of assessing energy and carbon management:

• Energy and carbon policy – is the policy clearly formulated? How committed is the top management?
• Organisation – is there a clear energy and carbon management structure with transparent accountability for energy consumption?
• Training – is appropriate, tailored and comprehensive staff training in place?
• Performance measurement – is there comprehensive performance measurement of energy consumption, costs and GHG emissions in place? Is achievement of the targets monitored? Is there an effective management reporting?
• Communication – is there effective communication of energy and carbon issues within and outside of the organisation?
• Investment – are resources routinely committed to energy efficiency and GHG emissions reduction in support of business objectives?

Energy and carbon reduction opportunities - some opportunities may have an impact on others, and so an energy and carbon manager should be wary of double counting or negating one opportunity if another is implemented.

Each opportunity should have:

• an action-orientated heading
• the savings, costs and evaluation criteria
• a description or details of observations
• what is being proposed and the rationale behind it
• what the next steps are to implementation
• any relevant references to support the proposed opportunity.

Conclusions and findings - this section can provide several key aspects:

• Directly answer objectives set out in the scope
• Pull together the opportunities into some common themes (for example lighting or behaviour change)
• Discuss funding options further
• Address possible barriers and how to overcome them
• Re-affirm matters discussed
• Discuss how some recommendations may impact one another
• Provide an insight into how the impact may be sustained.

Public disclosure of energy consumption and carbon footprint

The public disclosure of energy consumption and carbon footprint is usually voluntary, unless an organisation is obliged under specific legislation, such as large UK companies within a scope of Streamlined Energy and Carbon Reporting (SECR), companies listed on the main market of the London Stock Exchange or those in the EU Emission Trading Scheme (EU ETS) to publicly report their GHG emissions. However, many organisations use energy performance and carbon reporting in promotional materials, social media, sustainability reports or other publications, aiming to improve an organisation’s image and customer’s confidence or attract more investment.

Several organisations measure carbon emission disclosures. The most popular are the Global Reporting Initiative (GRI) and the Carbon Disclosure Project (CDP).

Whether reporting voluntarily or under a legal obligation, the disclosure should adhere to the following principles for reporting carbon data:

• Relevance - ensuring that the GHG inventory appropriately reflects the GHG emissions of the organisation and serves the decision-making needs of users – both internal and external to the organisation.
• Completeness - accounting for and reporting on all GHG emission sources and activities within the chosen inventory boundary. Any specific exclusions should be disclosed and specified
• Consistency - using consistent methodologies to allow for meaningful comparisons of emissions over time
• Transparency - disclosing any relevant assumptions and making appropriate references to the accounting and calculation methodologies and data sources used
• Accuracy - ensuring that the quantification of GHG emissions is systematically neither over nor under actual emissions, and that uncertainties are reduced as far as practicable.

Want to know more? More detailed information is available in our online training course, Level 1, Certificate in Energy Management Essentials. To learn more, visit Energy Management Training | Energy Institute.

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About Energy Essentials

Produced and published by the Energy Institute (EI), the Energy Essentials series aims to explain energy topics in an accurate, concise and accessible format. The guides are intended to promote greater understanding of energy, and are suitable for students, professionals whose work crosses over into the energy sector, or anyone with an interest in energy.

Energy Essentials guides are designed to provide foundation-level understanding with a scientific basis. The information, tailored for non experts, is presented in a format intended to be accessible, neutral and based on sound science. The development of this guide has involved an extensive review and analysis of relevant literature. The document has been through a robust peer review process, with contributions from subject specialists, including professionally qualified Fellows and Members of the EI, with a broad range of backgrounds and experience.

Due to the constantly evolving nature of energy technologies and markets, all data and information is current as of the date of publishing (January 2023). For more information, visit the Energy Institute Knowledge Service, or get in contact using knoweldge@energyinst.org.uk

Other titles in this series

Energy Essentials: A guide to shale gas
Energy Essentials: A guide to hydrogen
Energy Essentials: Transitioning energy-intensive industries to net zero

Glossary

Activity data: this is data related to the activity that is causing the emission of a greenhouse gas. The data is usually derived from utility invoices and receipts. For example, if calculating the Scope 1 emission for a natural gas heating boiler the activity data will be kWh of gas; if calculating the Scope 3 emission for airline travel, the activity data would be flight distance kilometres.

Baseline energy use: a benchmark against which an entity’s emissions are compared over time. The reporting company’s base-year emission is called baseline. A base year can be the earliest reporting year the company submits a complete emission report or a historical year when the company submits complete data or all subsequent years; it could be a calendar year or a fiscal year.

Carbon footprint: the amount of carbon dioxide (CO2) or carbon dioxide equivalent (CO2-eq) emissions associated with an activity, and, if ongoing, per year. For example, the average carbon footprint of a UK household has been estimated as 26t Co2-eq/y. Of that about a third is a direct emission, e.g., space heating, driving, and hot water, and two-third indirect or embedded emissions, e.g., those arising in the production and shipping of household goods. Some estimates of carbon footprint omit embedded emissions. (Oxford Dictionary of Energy Science)

Carbon management: measuring and managing greenhouse gas (GHG) emissions within an organisation and extending the reduction of emissions across a supply chain (Carbon management: a step by step guide - Paia Consulting)

Conversion/emission factor: it states how many kg of CO2/CO2e gas is emitted for every kWh of fuel combusted. Different fuels have different emission factors; those with high carbon content will have a higher emission factor than those with a low carbon content. Hence, coal has a higher emission factor than natural gas.

Energy efficiency: the use of the minimum amount of energy while maintaining a desired level of economic activity or service; the amount of useful output achiever per unit of energy input. The IEA has suggested that energy efficiency should be thought of as the “first fuel” considered for economic development and emissions reduction.

Energy management: it is the continuous process of measuring, understanding and optimizing energy consumption within an organization.

Energy management system (EnMS): it is a set of policies and procedures integrated and put into practice to track, analyse, and plan for energy usage.  It uses the Plan-Do-Check-Act management method of continual process improvement.

Energy Performance Indicators (EnPIs): the overall performance of a building or site can be expressed as a performance indicator, usually measured as kilograms of carbon dioxide per square metre (kg CO2/m2) per year or separately for fossil fuel and electricity measured in kilowatt hours per square metre (kWh/m2) per year. The analysis is normally performed on annual data, allowing for comparison with published benchmarks to give an indication of efficiency. Benchmarks are published for different types of buildings, some energy use applications, e.g. office lighting, and some processes.

Environmental management: it consists of decisions and actions concerning policy and practice regarding how resources and the environment are appraised protected, allocated, developed, used, rehabilitated, remediated, and restored. (Source: I. Petrosillo, R. Aretano, G. Zurlini, Socioecological Systems, in: Encyclopedia of Ecology, Volume 4, 2015, Pages 419-425)

Equity share approach: typically, covering the ownership percentage of energy use and emissions from all the aspects of an organisation that are owned by it (irrespective of whether they are operated or financed by the organisation).

ESG (environmental, social, governance) factors: a set of standards for company’s behaviour used by socially conscious investor to screen potential investments. Environmental criteria consider how a company safeguards the environment, including corporate policies addressing climate change. Social criteria examine how it manages relationships with employees, suppliers, customers, and the communities where it operates. Governance deals with a company’s leadership, executive pay, audits, internal controls, and shareholder rights. (Source: Investopedia)

Financial control approach: covering energy use and emissions from all the aspects of an organisation that fall under its financial control. Usually, this boundary includes fewer GHG emissions than the operational boundary.

Greenhouse gases (GHG): naturally occurring greenhouse gases include water vapour, carbon dioxide (CO2), ozone (O3), methane (CH4) and nitrous oxide (N2O). They absorb the infrared radiation emitted by the Earth and cause the surface temperature to rise.

GHG emissions: it states how many kg of CO2/CO2e gas is emitted for every kWh of fuel combusted. Different fuels have different emission factors; those with high carbon content will have a higher emission factor than those with a low carbon content. Hence, coal has a higher emission factor than natural gas.

Low-carbon: when the CO2 emissions related to a process or activity are small relative to the amount emitted when fossil fuel are the source of energy. For example, a low-carbon economy is one where a high fraction of the energy used is from renewable or nuclear power.

Measurement and verification (M&V): the process of quantifying savings delivered though an energy saving action or measure; enables savings to be properly evaluated.

Monitoring and targeting (M&T): the process of establishing the existing pattern of energy use and its key drivers and variables, and the identification of the desirable level of energy use.

Operational control approach: covering energy use and emissions from all the aspects of an organisation that fall under its operational control.

Scopes of emissions: under the GHG Protocol, the sources of GHG emissions are broken down into three scopes: Scope 1 accounting for direct sources of emissions such as fuel consumption, company vehicle or fugitive emissions, Scope 2 accounting for indirect sources of emission such as purchased or acquired electricity, steam, heat and cooling and Scope 3 accounting for indirect sources of emission such as purchased goods and services, transportation and distribution, and use of sold products.

Sustainability management: it embraces simultaneously economic, social and environmental objectives and impacts. It involves a very wide range of issues, including food and water availability, resources use and depletion, poverty, economic growth, social cohesion, community engagement, production and consumption, climate change, population growth, and international security. (Source: The Energy Hierarchy: Supporting policy making for 'net zero', Institution for Mechanical Engineers).

The Paris Agreement goals: the outcome of the Conference of Parties twenty-first meeting in Paris (COP21 Paris) in December 2015, in which nations reaffirmed the goal of limiting global warming to well-below 2°C above pre-industrial levels and pursuing efforts to limit warming to 1.5°C.

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Energy Institute, Energy management training, Level 2: Energy management professional, course materials available upon enrolment via Energy Management Training | Energy Institute

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