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Window of Opportunity

15 May 2006

A common issue for commercial property managers is the ever rising cost of energy. Mike Sewell, looks at the increasing importance of careful energy management and considers how building and facility managers can use this opportunity to elevate the issue to the boardroom

SO MUCH EMPHASIS HAS BEEN PLACED on the recent price rises affecting energy that the effective management of energy consumption is commonly overlooked or not fully understood within businesses and organisations. However, it is the one area where there is often scope for significant savings. In fact, the poor management of energy is so commonplace in most British organisations that as an outsourced energy services company (ESCo), Dalkia will guarantee a reduction in the consumption of energy for its customers.

Last month the Government published its Climate Change Review, which announced a series of measures designed to cut emissions from the UK to 15-18 per cent below 1990 levels by 2020, a new target that is significantly less than the previous 20 per cent goal. Considering the large proportion of energy consumption by buildings, both commercial and residential - 160 million buildings in the EU use over 40 per cent of Europe’s energy (source: CIBSE), compared to consumption in transport and industry - it is surprising that there is still little interest in the progress of this initiative.

The lack of a clear approach to energy consumption and management could be in part down to the responsibility void that surrounds the issues. Organisational structuring is one of the major obstacles to progress. Most businesses and organisations are structured around departmental silos that hinder a ‘joined-up’, approach to the management of energy within the building that has already been bought and paid for and can be either used or wasted.

Different levels of skill, understanding and expertise exist in people working across different departments, often in a disjointed fashion with conflicting agendas. When an outsourced company comes on board there is frequently a need for these existing skills and inherent knowledge to be carefully integrated under a total energy awareness programme in order to effectively implement good energy saving measures.

In the energy debate published in last month’s edition of PFM - Making the Case, Colin Warne, Director of Marketing at EDF Energy in which he said: “Unless the boardroom is interested in energy management it is just not on the agenda.” The challenge is how exactly are we to elevate energy management to a top line issue?

In addition to the Climate Change Review, a new measure by central government seeks to label the energy efficiency of non-residential buildings - rather in the same way as a domestic light bulb or fridge-freezer is currently labelled. The general consensus of this initiative still seems to be that while the best energy rating for a building is desirable, most decision makers are driven primarily by the cost implications required to achieve this. In the short-term the bottom line is that if energy is not being used, it is not being paid for – therefore real capital savings stand to be made by the business or organisation. This message seems to have been lost on the way to the boardroom and FMs are increasingly challenged to bring it back to the agenda. The first crucial link is when key decision makers within organisations begin to embrace immediate energy management issues because the savings can impact the bottom line.

For savings to be made measures need to be put in place and an educated, informed end-user can help to drive the decision-making process towards significant investment in an energyefficient building which will ultimately look to the long-term view. As has already been noted, all too often the key decisions for buildings management and system controls are driven by contractors and consultants who are only interested in the 12-month view. The case for outsourcing relies on end users such as property managers and building operatives drawing on the expertise of a reliable and respected facilities and energy services company that can offer a whole range of valuable and specialist knowledge from a whole range of past experiences.

An organisation like Dalkia that combines technical facilities services with energy management has the unique insight to be able to pull all these necessary strands of effective energy management together. There are various recogniseable challenges facing an in-house FM that can be overcome with the expertise of a supporting outsourced partner. FMs manage and control infrastructure within an organisation, by applying a strategic approach and sharing ideas they are able to innovate energy saving tactics and share in best practice. Pulling together many strands to implement an overall strategy is something integral to an FM’s role, while an innate understanding of the impact of churn and changing useage patterns enables the FM to observe altering needs within an organisation and make identified changes happen.

Link all these with an in-depth understanding of energy and its procurement, use and management, and the result is a unit that is able to overcome the challenges and obstacles in order to implement solutions. Bringing an ESCo on board will also have the benefit of looking at the operational elements of a building through new eyes. In the long term even at the early design stages of a new build scheme an outsourced partner can advise on new ways in which to improve energy efficiency as well as ensuring compliance with energy saving measures.

In the short-term an outsourced company’s tactical responses to the quirks of a particular building can be developed on the basis of experience gleaned from similar situations. Having dealt with lots of buildings of differing ages, uses, needs and styles, a company taking an objective stance is able to apply past experience to the problems faced.

By observing the working patterns of the people who use the building and responding in an objective way, the energy performance of a structure can be micro-managed in order to hone its capital impact on the bottom line. A particular case in point is that of a busy call centre, where staff felt cold when their PC monitors were replaced with more efficient flat screen VDUs. The reason was that the PC monitors had produced more heat (essentially a form of energy wastage) than the flat screen ones, so replacing them at once had significant and noticeable impact on the warmth of the room for those using it. The solution was to adjust the building’s temperature controls accordingly.

On a different scale, an intelligent approach to energy management has been taken at Boots where lighting is a key element of energy savings. Here the burning times of lamps on astore-by-store basis were detailed using the activity monitored by the security system, an innovative strategy devised by Parkersell, the specialist lighting services division of Dalkia. The team was then able to determine how long each lamp was required to burn in order to accurately measure the mortality rate of the lamps and establish a re-lamping cycle around this.

At Capital One the importance of CSR is high on the boardroom agenda. The effect of this can be seen at all levels of the business, and contributing factors to the CSR policy are filtered right down to the way the company handles its waste. In real terms waste costs Capital One £52,290 per year, a figure which is set to rise by an average of £4,567 per year in the next four years. With a scheme in place to manage waste effectively, Capital One will save up to £43,690 per year, a benefit that includes the initial outlay costs to set up the programme. The savings are significant and these contribute directly to Capital One’s goal to save £1m by 2015. However, the implementation of the waste management programme is not driven solely by the financial benefits to the organisation. With more emphasis on CSR than ever before in the UK, Dalkia is helping Capital One’s commitment to being a socially responsible company, compliant with waste regulations, and contributing effectively to the environment.

The danger for UK organisations and businesses is that the opportunity to make the case for real energy savings is current – there is little time to make decisions and plan a strategic approach to make short-term impact. By using outsourced expertise, in the form of an energy management company, an organisation can capitalise on the quick wins that will instantly reap recognisable savings that contribute to both an effective CSR policy, as well as the financial agenda that will continue to take priority at decision-making level.

● Mike Sewell is Energy Services Director at Dalkia

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