Any successful energy management programme within a company needs the total support of senior management. It should be taken on board as a corporate objective as with manpower, raw materials, production and sales. Energy efficiency is extremely important to manufacturing industry, particularly so to those that is energy intensive.

Key Elements:

The four vital elements for a successful energy management is shown in figure. Primarily top management support is the key. Equally important is a well charted strategy plan, an effective monitoring system and adequate technical ability for analysing and implementing energy saving options.

In companies, which do not already possess an energy efficient ethics, good communication downwards from senior management will be vital. Having decided on a policy of energy conservation senior executives should initially at least demonstrate their commitment to the new policy not alone through words but by their actions. They should actively participate in the organization and planning of the energy management campaign and should be seen to demonstrate strong personal commitment to the ideal.

Introduction to Energy Action Plan

It is important to translate the goal and objective into an energy management action plan for successful implementation. This leads to the identification in very specific terms of:

What needs to be done?
Who will do it?
When it will be carried out and completed?
What resources are required?
How much finance to be budgeted?
What energy tasks are to be carried out?
When the task is to be carried out? 

This is not to suggest that action planning is a simple process. To be effective, the tasks must be feasible and clearly defined. The right people need to be identified and allocated to carry out the tasks. The task must be scheduled around operational constraints and plant operating condition. For example, some tasks can only be done when the plant is down; others, such as those related to data collection, can only be done when it is operating. Resource planning is probably the most difficult part. It cannot be assumed that the people required to do the job can be automatically deployed.

Force Field Analysis

Before creating the action plan, it can be a useful exercise to clarify the goal to be achieved, and to assess what barriers must be overcome and what influences exist in the organization that work towards the achievement of the goal. These barriers and influences can be thought of as negative and positive forces, respectively. There is a simple tool, called “force field analysis” that can be used to gain additional insight into the change process to be pursues. The steps involved in using it are:

State the organizational goal and indicate the direction (say, left to right) that signifies moving towards that goal: for example, the goal might be “improve energy efficiency in the assembly plant” or “reduce energy consumption in the facility for current occupancy levels”.

Identify barriers that tend to work against the achievement of the goal: these may be internal to the organization (for example, a lack of expertise related to energy management) or external (for example, energy rate structures or government regulation).

Identify positive influences or forces that tend to work towards achievement of the goal; again, these may be internal or external.

Estimate the relative strength of the negative and positive forces (for simplicity, you may want to identify them as low, medium and high strength).

Prioritize those forces that can be strengthened or weakened through your action plan with the greatest effect on achieving the goal; (Tip: It is usually more effective to attempt to minimize negative forces than to try to strengthen forces that are already positive).

A typical force field analysis chart is shown in Figure.

Energy Policy

Many organisations have not felt it necessary to adopt a formal energy policy. However, a formal written energy policy acts both as

• a public expression of your organisation's commitment to energy conservation and environmental protection
• a working document to guide your energy management practices and provide continuity.

It is in the company's best interest that support for energy management is expressed in a formal written declaration of commitment accompanied by a set of stated objectives, an action plan for achieving them, and a clear specification of responsibilities.

Format of an Energy Policy

Part 1

• Declaration of top management's commitment to, and senior and middle management's involvement in, energy management.
• Statement of policy.
• Statement of objectives, separated into short and longer term goals.

Part 2

• An action plan, specifying a timetabled programme of work.
• Costed resource requirements, including staffing complement, investment and training needs, necessary to achieve the programme.
• Assigned responsibility and accountability for actions outlined, specifying individuals by name and post.
• Description of any energy management committee's remit, structure, membership and reporting mechanisms.
• Named committee representative for each department and specification of internal and external lines of communication
• Statement of review procedure, defining milestones and mechanisms for assessing overall progress and value for money, as well as appraising the performance of individual members of staff.

Organizing: Location of Energy Manager

The energy management function, whether vested in one “energy manager or coordinator” or distributed among a number of middle managers, usually resides somewhere in the organization between senior management and those who control the end-use of energy. Exactly how and where that function is placed is a decision that needs to be made in view of the existing organisational structure.

Because energy concerns different departments within a firm, an effective energy management programme must involve a number of people. In many companies, a committee is formed to include representatives of important departments.
It can encourage communications and the sharing of ideas amongst various departments throughout the company. It can serve to obtain agreements on energy conservation projects, which affect more than one department. It can provide a stronger voice to the top management than a single manager normally could. The composition of the energy committee will vary from one company to another, depending on the existing management structure, the type and quantity of energy used and other company-specific factors. An example of a typical committee is shown in figure.

The frequency of committee meetings depend on the importance of energy costs in the overall cost structure of the company and what projects are in progress at any time. Normally a monthly meeting is usual, so that monthly production and energy consumptions may be reviewed regularly by the committee. This review would include a comparison of actual performance against previously set targets and budget figures, as well as against previous months. Other items for the agenda should be a review of the status of energy conservation investments, in progress or planned.

The energy manager ranges over the whole organisation and needs access to all departments. There are a number of options:

Technical department is a good base for the early stages of an energy management programme where the emphasis is on gaining control of energy consumption and costs, but is less appropriate for training and energy information activities. Motivation and training is made simpler from Personnel department , but there is a problem with technical support and credibility. As the energy management programme develops and the emphasis shifts to one of maintaining control of energy usage, the finance department is a good place which to operate the financial controls and accounting procedures. Again, technical support and credibility could be an issue.

Corporate management services department would be a suitable location for the energy manager in a large organisation with diverse operations spread over a large geographic area. It would allow energy efficiency initiatives to be coordinated company-wide, and would ensure that the programme and initiatives are supported at corporate level.

Top Management support

The decision of company management to control energy costs is a vital first step. This must be clearly stated and understood by all within the company. Senior management should participate in energy committee meetings or in other energy related activities. The company managing director may have the energy manager report directly to him particularly at the beginning of the energy management programme.

One of the roles of the top management is to publish a formal statement of its energy policy, which can be used to define company activities in energy matters for its employees and it can inform the general public about the company commitment to energy efficiency.

Finally, an important part of top management commitment is to appoint the responsible organisation for implementing the energy management programme. This is commonly at two levels: energy committee and the energy manager. Evidence of top management commitment will be seen in the level of support given to the committee and the manager, especially the resources such as manpower, budget etc allocated.

Accountability

Periodical reporting to the Management is needed for controlling all energy management activities, budget etc. Clear delegation of responsibility and reporting procedure and accountability should be assigned for all stakeholders likes energy users, energy committee, energy managers, energy coordinators and Top management.

One of the key factors which often works against energy efficiency is poor management of the structure of the system within which the costs of energy are incurred. If the people who control the ability to change energy use are not responsible for the energy budget, then the costs of energy efficiency will always be viewed as a distraction from core business. However, if you allocate a single budget to cover energy purchase, energy management activities and energy efficiency investment, the controllers and operators of this budget have a strong motivation to work to reduce energy expenditure. Furthermore, this approach allows innovative management of the budget, by allowing savings to be re-invested into further energy efficiency measures. Thus it is strongly recommended that an integrated energy purchase and energy management budget is developed as part of the energy management action plan.

Motivation of Employees

One of the most successful means of motivating employees is through “awareness”. Employees can be stimulated to support an energy management program if they are informed of (1) the amount of energy they are using (2) the costs involved (3) the critical part that energy plays in the continued viability of their job (4) the many ways they can save energy in their operation (5) the relationship between production rate and energy consumption and (6) the seriousness of the energy problem and its potential effects upon our nation’s economy in the future.

Another effective way to motivate employees is through recognition. Employees should be involved personally in setting realistic but challenging energy conservation goals through involvement cum commitment. It is imperative that energy conservation goals be designed by the operating departments and the goals should not be dictated. Fostering reasonable competition between departments and plants is also healthy. It motivates individuals to set their sight higher and to work harder to achieve their goals.

Another potential area for motivating employees to generate ideas in saving energy is rewards, either as financial rewards, Job security, and Job enrichment, public recognition and greater authority.

Requirements for Energy Action Planning

Personal involvement
Individuals must be educated as to the necessity for energy conservation and then personally involved in some way in the conservation programme.

Competition
Competition can be employed to good effect as a motivating factor in energy conservation. With energy monitoring in place similar production lines can compete with each other on energy efficiency with rewards of financial bonuses or sometimes-just simple, honor. Equally the use of energy management competitions can lead to competition between different companies for example for ‘Energy Manager of the Year’ again with some prize involved together with the honor of winning.

Budgets
Budgets for energy use within each activity centre in an organisation should be treated separately like labor or raw material budgets and accounted for in similar fashion.

Assessing managerial performance
As part of overall policy energy management can be included in the performance assessment of a manager.

Energy coordination
In certain energy intensive industries it might be corporate policy to assign an engineer to each manufacturing facility with primary responsibility for energy management and conservation.

Capital and human resources
Having made each division of an organisation responsible for its energy use the senior management should ensure that the requisite personnel and capital funds are made available to undertake the energy programme.

Cost centre accountability
Each discreet activity would be accountable for its energy use separately and the individual manager answerable for the same. This entails detailed sub metering of energy use to each such activity.

Energy representative
Each department would assign responsibility to an individual (preferably an engineer) to act as delegate to the plant energy management committee.

Training
Sufficient training for the energy representative and engineers involved in energy conservation activities should be carried out.

Metering
Metering is one of the management tool for energy conservation. At the individuals level there is a psychological impact involved with metering Just having meters installed and monitored is in itself an inducement to reduce unnecessary energy consumption.

Publicity
One of the best ways of promoting an energy conservation programme is a publicity programme aimed at the worker on the job.

Planning and Training

Planning of an energy management strategy needs to be carried out at various levels within an organization. At the corporate level a climate should be created which will facilitate planning at other levels in the organisation. At the corporate level planning will provide overall direction in setting targets.

These targets should be specific verifiable and attainable. The objectives in one company might be to reduce dependence on one particular type of fuel because it is in short supply in a particular region. In another company the objective may be one of simple reducing overall energy consumption. Whatever the objectives, they should be communicated clearly throughout the whole organisation. As shown in the figure, a good strategy plan starts with an audit to assess the existing situation. How good or how bad is known like comparing with good practices and benchmarks available. When this is not available it can be compared with the plan’s own best performance achieve in the past. A good monitoring system has to be in place to periodically assess key energy indices and parameters.

Now a detailed audit can be conducted, the outcome of which forms the basis for strategy plan. The next step is to set targets and implement action plans to meet those targets. A typical example of a target would be “ to reduce oil consumption by 10%”. Once the targets are achieved, again the cycle is repeated. As we have seen earlier, energy management is only partly to do with technical. Unless the people cooperate the whole energy management process can get derailed. Hence, training awareness and motivation are equally important tasks in energy management.

Training

Training that pertains to energy management takes many forms, depending on who are the targets. Training includes the complex technical issues that relate to energy efficient technologies. But it also includes the training of general staff to create:

1. Awareness of energy efficiency as a corporate priority
2. Understanding of the issue
3. Commitment to achievement of goals
4. Understanding of personal impact on energy consumption

There are many ways to approach training at this level. The important principle is that the development of a staff training program requires some considerable thought about the present needs, knowledge and attitudes of staff. Performing a training needs assessment would be of immense help in providing the required inputs. Energy forums, training days, seminars and talks all offer opportunities to create energy awareness and to build commitment. Energy managers can make presentations to all kinds of gatherings, for example: board meetings, management team meetings, seminars for budget holders and middle managers.