Business value

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Are you aiming at the right energy targets?

A friendly maintenance manager told me recently: “We will first do all we can with our big energy users and then proceed to an energy audit”. 'Big ticket items first' approach to energy management may hurt business and can hurt maintenance manager personally. This hurt can be avoided. If started right,  big and impactful energy [...]

Simple payback can cost you profits and what is the better way ratio

Simple payback period is routinely used as an ultimate ratio when it comes to selecting between energy projects. This practice may cost your company money in missed opportunities. Simple payback period (SPP) is the simplest way to assess profitability of an investment project. Simply divide first year cost by first year savings and you get [...]

Energy savings generate 20x more profit than sales

Energy savings are small and unimpactful ...  except  they go directly to profit. How much a company has to produce, sell and ship to make the same profit? With a typical profit margin in manufacturing hovering around 5%, to generate $100K profit a company must sell $100K/5%=$2 mln worth of product. It's 2 weeks of work [...]

Ducking peak hours to reduce Global Adjustment is a serious game in Ontario

Yesterday I attended an interesting presentation at Energy Solutions Exhibition in Hamilton - a serious approach of Peak Power Inc to reducing demand during peak hours. Peak Power considers peak chasing a game of smarts, and they lots of them to the table. Weather your company belongs to Class A of Class B, Global Adjustment is [...]

How to help CFO approve your energy project and keep healthy margins?

Corporations routinely require energy projects to meet a 2 year simple payback threshold, which is another way of requesting a 50% return. Same corporations rarely enjoy returns in excess of 10% in their core business. Are CFOs mean to energy projects, plain stupid, or what? - Unlikely. Slow thinkers do not make it to corner offices. [...]

What is the value of saved kWh at your plant?

What is the value of saved kWh at our plant? This post continues the discussion about the $value of kWh, started in What is kWh worth at your plant. In that post we talked about effect of operational changes on cost of energy. Today we will talk about how value of energy efficiency projects shows [...]

Energy use monitoring is key to buying, selling and implementing energy efficiency projects profitably

Energy accounting is key to success of energy projects Selling, buying and implementing energy projects costs too much effort at both sides of the client-vendor divide, despite the best effort of professionals involved in the process. It does not have to. Why so many projects are either not sold, or not approved, or [...]

How can an energy manager travel in time and space to impress CFO?

Which energy manager does CFO know by first name? Hands-on? Watchful? Strategic? A Hands-On energy manager walks the floor daily to personally check consumption of every machine. He is in one place at a time. A Watchful energy manager installs meters to check real-time energy performance. He monitors several machines at the same time. A [...]

Energy efficiency is not about cutting cost of energy anymore, it is serious now

Energy efficiency is becoming less and less about direct energy cost reduction and more about meeting demands of customers and governments. A recently published article Who Invests in Energy Efficiency? by American Council for an energy efficient economy sums up a range of studies about driving of energy efficiency investment in business. It comes out energy cost [...]

By | 2017-09-20T11:01:28+00:00 September 20th, 2017|Categories: Business value, Energy management|Tags: , , |0 Comments

7 plus 2 barriers to success of industrial energy efficiency and how to overcome them

Even many C-levels today agree agrees that energy efficiency is important, still too often too little is done. How can this situation be changed? This 2003 article - Overcoming Barriers to Effective Energy Management in Industrial Settings - names several barriers which I list below with my comments: Lack of Organizational Commitment to energy efficiency [...]