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RUSSELL EMWS 2013

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Christopher Russell

This document discusses strategies for evolving industrial energy management approaches into the 21st century. It argues that energy management should be viewed as an investment that creates wealth and supports business goals, rather than just a cost-cutting exercise. Specifically, it recommends taking a strategic, cross-departmental approach focused on improving capital performance and returns, communicating outcomes in business terms, and viewing energy management as a profit center rather than just a cost center. The goal is to frame energy efficiency as a business opportunity rather than an environmental issue.

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UP HILL OR DOWN HILL: How Shall the Rock of Energy E鍖ciency Roll? Christopher Russell, Principal Energy PathFINDER .com (443) 636-7746
About Christopher Russell, C.E.M., C.R.M. n Independent consul?ng since 2006 Principal, Energy Path鍖nder n Visi?ng Fellow, American Council for an Energy E鍖cient Economy, 2012+ n Energy Manager, Howard County, MD, 2010-2012 n Director of Industrial Programs, Alliance to Save Energy, 1999-2006 n Comm. & Indus. Program Manager, American Gas Associa?on, 1995-1999 n MBA, M.A., University of MD; B.A., McGill University 2 息2013 Energy PathFINDER.com About Christopher Russell
TODAYS PURPOSE: Evolve the STRATEGY ORGANIZATION COMMUNICATION & PHILOSOPHY of industrial energy management into the 21st century. 3 息2013 Energy PathFINDER.com
STRATEGY UP HILL: Proclaim reduced u?lity bills as your purpose. DOWN HILL: Proclaim a vision for suppor?ng core business goals through strategic energy management. 4 息2013 Energy PathFINDER.com
STRATEGY UP HILL: Approach energy management as a project. DOWN HILL: Approach energy solu?ons as an investment. 5 息2013 Energy PathFINDER.com
STRATEGY UP HILL: Use an ENERGY AUDIT to determine a list of projects. DOWN HILL: Develop BUSINESS PLAN that provides a roadmap to business results. 6 息2013 Energy PathFINDER.com
STRATEGY UP HILL: Evaluate proposed e鍖orts for their cost to do. DOWN HILL: Evaluate proposals ≒ for impact on overall invested capital performance ≒ in comparison to the cost of doing nothing 7 息2013 Energy PathFINDER.com
EXPENSES, INTEREST, OR INFLATION CAPITAL IS ALWAYS IN MOTION ECONOMY (opportunity) PLACE OF LOW RETURNS PLACE OF HIGH RETURNS CAPITAL IS NEVER AT REST 8 息2013 Energy PathFINDER.com
THE INDUSTRIAL FACILITY IS A MICRO ECONOMY FACILITY (opportunity) WEALTH INPUTS WEALTH CREATED EXPENSES, INTEREST, OR INFLATION Who will get superior returns from your facility assets? YOUR BUSINESS or the UTILITY COMPANY? 9 息2013 Energy PathFINDER.com
PURSUING ECONOMIC OPPORTUNITY 1. Benchmark current capital performance 2. Perceive opportuni?es for superior performance 3. Es?mate investment risk/return 4. Reinvest capital 5. Con?nuous improvement. See Step 1. For the ECONOMY For the FACILITY DYNAMICS ARE THE SAME 10 息2013 Energy PathFINDER.com
ORGANIZATION UP HILL: Delegate all energy mahers to a single department (silo). DOWN HILL: Organize leadership and skills in cross- departmental teams. 11 息2013 Energy PathFINDER.com
ORGANIZATION UP HILL: Allocate budget, skills, and ?me commensurate with energys propor?on to total expenses. DOWN HILL: Fund e鍖ciency e鍖orts propor?onately to the magnitude and speed of cash 鍖ow that it creates. 12 息2013 Energy PathFINDER.com
COMMUNICATIONS UP HILL: Assume everyone already knows what youre talking about. DOWN HILL: Manage expecta?ons through educa?on. 13 息2013 Energy PathFINDER.com
1-2 YEARS 2-5 YEARS 5+ YEARS PRICE/PROCUREMENT AWARENESS & BEHAVIOR O&M/PROCEDURAL CAPITAL INVESTMENT SAVINGS POTENTIAL OVER TIME* *Authors Summary of Industry Knowledge 14 息2013 Energy PathFINDER.com
COMMUNICATIONS UP HILL: Address mechanical performance. Explain everything in techno- speak. Describe results as energy saved. DOWN HILL: Address capital performance. Ar?culate outcomes and rewards as they accrue to the agendas of other departments. 15 息2013 Energy PathFINDER.com
Ask not how much energy management shall take from current resources. 16 息2013 Energy PathFINDER.com Ask how much (and at what rate) energy management shall create new wealth.
COMMUNICATIONS UP HILL: Execute without informing, persuading or collabora?ng. DOWN HILL: Declare amnesty for past prac?ces; seek, encourage, and reward compliance. 17 息2013 Energy PathFINDER.com
COMMUNICATIONS UP HILL: Perceive energy management as a distrac?on from standard opera?ng procedures DOWN HILL: Fold energy performance criteria into exis?ng business metrics and accountabili?es 18 息2013 Energy PathFINDER.com
COMMUNICATIONS UP HILL: Use simple payback. Results describe HOW LONG it takes for a budget to replenish itself. DOWN HILL: Use rates of return. Describe the RATE and MAGNITUDE of capital: (1)Created via your agenda , or (2)Destroyed through inac?on 19 息2013 Energy PathFINDER.com
You should not have to defend superior rates and magnitudes of investment returns. 20 息2013 Energy PathFINDER.com Detractors need to defend the rate and magnitude of capital destruc?on caused by DOING NOTHING. DEFENDING ENERGY MANAGEMENT?
PHILOSOPHY UP HILL: Confuse energy e鍖ciency with environmentalism. DOWN HILL: Perceive energy improvements as business opportuni?es. 21 息2013 Energy PathFINDER.com
PHILOSOPHY UP HILL: Perceive energy management as a cost center. Facility assets are a cost to be minimized.. Success = no unusual expenses; dont get no?ced. DOWN HILL: Energy management = pro鍖t center. Success = crea?ng cash, improving return on invested capital, get no?ced for suppor?ng other departmental agendas 22 息2013 Energy PathFINDER.com
Yeah, but UP HILL: Keep pushing the same buhons and keep geqng the same results. DOWN HILL: Apply some of the ideas from this presenta?on. 23 息2013 Energy PathFINDER.com
YOUR FACILITY CAN BE AN ATM MACHINE. 24 息2013 Energy PathFINDER.com
CONCLUSIONS ≒ Demys?fy ≒ Dont save CREATE! ≒ Mone?ze ≒ Collaborate ≒ Document and celebrate 25 息2013 Energy PathFINDER.com
YOU-TUBE: search Energy Path鍖nder Investment Calculator Energy PathFINDER .com Christopher Russell @ENERGYpathfndr Feb 2008 June 2010 THANK YOU!

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RUSSELL EMWS 2013