What is energy management?

Energy management and energy efficiency

The terms ‘energy management’ and ‘energy efficiency’ are often used interchangeably. However, there are differences between them. Energy efficiency is the use of the minimum amount of energy while maintaining a desired level of economic activity or service. In other words, energy efficiency is the amount of useful output achieved per unit of energy input. Improving energy efficiency means either achieving more from the same input or achieving the same output with less energy.

Energy management is a systematic and continuous effort to improve energy efficiency within an organisation. It can take many forms and involve all types of interactions with energy, from procurement and purchasing strategies to technological improvements and behavioural changes.

Energy Management Systems (EnMS)

Energy management can be tailored to the size and the needs of any organisation. In order to be effective, it requires the implementation of a plan or system which is flexible, value-driven and in alignment with the strategic aims of the organisation.

Energy management systems are designed to help organisations by providing a systematic and well-structured framework. An EnMS supports energy management, but is not a substitute for it. Although the basic elements of an EnMS should be similar across organisations, there are differences in the implementation of the system depending on the size and the complexity of an organisation’s operations. This guide uses the Plan-Do-Check-Act management process as an example of such a framework for improving energy performance. Whilst an EnMS is not a requirement for managing energy, it provides a useful and practical context for understanding and a structure for continuous improvement. Organisations should choose any or all of the components of the EnMS based on their specific circumstances and requirements.

What makes a successful EnMS?:

- Assessment of the EnMS at regular intervals and whenever there is a significant change in energy consumption

- Adjusting and improving the EnMS based on lessons taken from regular assessment

Treating energy as a tangible resource

Energy use is the consumption of an energy source or fuel such as electricity, natural gas, diesel, petrol or coal. Energy is used to provide a service such as lighting, heating, transport, or running industrial equipment or household devices. As a consumable resource, energy should be managed in a similar way to other resources, such as office supplies or raw materials for manufacturing. However, there are two unique challenges when it comes to treating energy as a consumable resource.

1. Identifying and managing risk:

The influence of geopolitical and market risk on the energy system is significant, and as a result prices are volatile. Organisations must have a sound understanding of their current and future energy needs in order for their purchasing to be cost-effective. Various factors add to the complexity such as politics, regulations, and weather conditions.

2. Measuring consumption:

Energy differs from other commodities and consumable resources in that, in many cases, it is intangible and invisible. For that reason, and because it is continuously delivered, the level of consumption of an energy source such as electricity or gas is difficult to gauge. The only way to quantify the use of electricity and natural gas is by monitoring consumption data.

Effective procurement strategy

Managing energy is inextricably linked with managing an organisation’s assets, facilities, processes and transport activities. Procuring new energy efficient products and services that operate as well as or better than existing ones can reduce energy use and maintenance and replacement costs.

Understanding by Measuring

Managing energy, as with any other resource, requires the development of an understanding of its use within an organisation. At the core of energy management is the process of monitoring and targeting (M&T).

M&T is based on the fundamental principle that ‘you cannot manage what you do not measure’. It is the first crucial step towards improving an organisation’s energy performance.

M&T aims to identify opportunities to save energy. Monitoring is the process of establishing existing patterns of energy use and identifying drivers and variables of those patterns. Targeting refers to the identification of the desirable level of energy use.

Successful monitoring allows energy use to be correlated with driving factors such as weather, units of production and behaviour. As a result, areas of excessive and avoidable energy consumption can be identified. Figure 2 shows instances of potential waste identified through monitoring of detailed energy consumption data.