The Green New Deal has focused a lot of overdue attention on building energy
efficiency, but while we weren’t looking, states, cities and companies have set
their own aggressive targets for reducing building energy use. Two examples: The
city of San Jose, California is demanding that all commercial buildings be
net carbon
neutral;
and Procter &
Gamble
has pledged to cut emissions in half at all manufacturing facilities, both by
2030. These are challenging goals, and our experience with global enterprises
shows you can dramatically reduce energy use across a portfolio with today’s
technology — and save money doing it.
The case couldn’t be clearer: The average Energy Star–certified commercial
building saves 35
percent in
energy costs. LEED-certified buildings saved owners about $1.2 billion in
energy costs between
2015 and 2018, according to the US Green Building Council. HVAC
optimization, which contributes to both Energy Star and LEED certification, can
save up to 8 percent of total energy use in commercial buildings just on its
own. As the need to reduce climate-changing emissions grows more urgent, large
organizations are under increasing pressure from customers, employees,
shareholders and governments to take the lead.
The question is, how can these organizations maximize their energy efficiency
across their entire portfolio, and do it in a way that is, well, efficient?
Implementing complex projects across a global (or even regional) building
portfolio can raise so many challenges that efforts stall out, sometimes before
they even get off the ground. Judging by our work with 10 Fortune 50 companies
at sites in 11 countries across North America, Europe and Asia, the
ones that surge ahead tend to share a set of approaches that encourage
stakeholder buy-in, provide sustainable financial support and ensure positive
outcomes across all sites.
Evangelists with power create momentum
Any corporate project needs a champion, and when ambitions span multiple
facilities across multiple geographies, it’s essential. Even word from on high
may not be enough to make a pilot project happen, much less roll out a
successful pilot across the portfolio. Often the evangelist is an internal
energy manager who can introduce new technology to different teams and
facilitate communication across sites. A good advocate has the authority to make
big decisions while also remaining close enough to the ground to see what’s
happening on a day-to-day basis.
We’ve seen the best- and worst-case scenarios. One US-based champion we worked
with leveraged knowledge of his company’s international landscape to help us, as
well as his internal teams, navigate projects at sites in China and
Malaysia. With another, the initiative got great initial results but stalled
after the pilot, due to insufficient visibility into the rest of the
organization.
Ongoing funding strategies fuel sustainable initiatives
As with most projects on an enterprise scale, companies typically begin HVAC
optimization and other efficiency upgrades with a pilot project at a single site
and then expand across their facilities portfolio when the value is proven. When
there’s no funding source lined up beyond the pilot, though, successful
implementations often don’t spread. We’ve seen three effective approaches to
funding energy-efficiency initiatives: portfolio, program and
project funding.
The portfolio approach bundles solutions together to maximize results. Grouping
projects with a lighter touch and speedy ROI with more capital-intensive
projects that tend to have a longer ROI allows you to achieve more, while still
providing an overall return that is attractive to the finance team. The same
principle applies to bundling new equipment purchases with software
implementations, and coordinating energy efficiency projects with other building
retrofits.
Another approach treats energy efficiency as a self-funding program. When the
University of Texas at Austin, one of the US’ largest universities, expanded
its campus, it invested in HVAC optimization to mitigate the increased energy
consumption of new facilities. It planned an eight-year program so that savings
from the first project could pay for the next. As savings grew, the university
expanded its optimization program.
A third option is a dedicated central fund that pays for energy efficiency or
other sustainability initiatives at corporate sites, so projects don’t affect
budgets at the sites making improvements. One of our Fortune 50 customers has a
separate fund that enables sites to go over their annual capital spending budget
for energy projects approved by the corporate energy team. This allows sites to
tackle projects at any time, rather than having to fit them into a particular
fiscal year. Organizations that understand the long-term impact of reducing
their energy spend and then budget accordingly will come out ahead from both a
sustainability and financial perspective.
Consistency is the mother of enterprise adoption
Companies that are most successful at implementing enterprise-wide building
energy upgrades prize consistency. That means standardizing as many project
elements as possible — including vendors, deployment strategy and internal
teams.
Stable teams are important on both the corporate side and the vendor side.
Corporate project managers with a bank of experience can apply learning on
previous projects to new ones, and they are better equipped to navigate around
site-specific roadblocks. On the vendor side, we’ve seen the benefits of putting
the same team to work for one enterprise on 42 sites in six countries: The
knowledge transfer to each corporate site was significant, and we’ve been able
to shave ramp-up time. Readily available documentation and one set of rules for
all sites also help to make each new project go as smoothly as possible. And
having a master services agreement that spells out how companies and their
vendor partners work together also helps speed up rollout and reduce costs in
the long term.
These project approaches aren’t silver bullets — many other factors are in play,
as well. But when these elements are in place, it’s much more likely that an
enterprise will be able to reap the full benefits of energy-efficiency upgrades
across its site portfolio. These real-world savings by a global customer tell
the story: Our first HVAC optimization project delivered $96,000 a year in
energy savings for the pilot site. Three years later, 19 sites saved the
corporation $3.3 million. In 2018, 42 global sites delivered $8.3 million in
energy savings. Without strong, consistent processes, the project might have
left those millions — and nearly 4,000 metric tons a year of CO2 — on the table.
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Director of Business Development
Optimum Energy
Steven Horowitz is Director of Business Development at Optimum Energy, where he leads enterprise-level account acquisitions, marketing and product licensing.
Published Jun 26, 2019 8am EDT / 5am PDT / 1pm BST / 2pm CEST