Why energy managers are not valued in the boardroom and How to change this

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Why energy managers are not valued in the boardroom and How to change this

As an energy manager you work hard to keep energy cost in check. But do you get due recognition of results?

A typical energy manger has to master lots of skills: come up with energy efficiency ideas, evaluate dozens of offers on energy saving tools, products and services, manage contractors, oversee implementation of energy conservation projects, prepare incentive applications.

When the time comes to report results, CFO is always skeptical: “you say you have saved us energy, but our bills are higher, how comes?”

When this happens it is too late to remind CFO that production has increased, last summer was hotter, new machine was put online and a new SKU was added. CFO thinks in dollars and cents, it’s energy manager’s job to set up a proper baseline of energy consumption before CFO has made up his mind.

The trouble can be prevented.

How to impress CFO with energy results

Before any energy related improvements are done:

  1. Establish energy consumption baseline in relation to production and other affecting parameters.¬†Although it’s common to relate energy use to sales, this may be tricky if prices or SKU change year-to-year. Find energy metric which reflects actual production, not sales.
  2. Clearly document all conditions that can affect energy consumption. This will vary from plant to plant and may include production schedule, list of machines, recipe used, raw materials, shipment schedule, SKU mix, packaging size and type, energy tariffs, maintenance schedule. Either of these parameters may change through the year and affect energy bill, while none of them are under energy manager’s control.
  3. When project is completed compare results with the baseline.
  4. Check that savings are maintained on a regular basis.

If you do not have enough time and resources to perform this work on your own – outsourcing energy use analysis will make your life easier and your results more trustworthy. Independent verification of achieved energy savings in dynamic operational conditions surely will come handy when reporting in the boardroom.

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