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How to Calculate Energy-Enhancing System ROI
The first step in driving energy savings is to measure and validate consumption. Then you know where to drive savings.


Energy audits are essential to providing a baseline against which future projections of energy savings can be made when organizations pursue efficiency upgrades.
December 10, 2012 By Aaron Stern

In this cash-strapped, energy-conscious time, organizations increasingly seek to maximize the efficiency of their networks and facilities. But before they invest in new technologies that will help them get the most bang for their buck, they must first look inward.

“What you don’t measure, you can’t manage,” said Jeff Drees, the U.S. country president of Schneider Electric. “So the first step in driving energy savings is to measure [and to] validate your consumption. Then you know where to go [to] drive savings.”

Making those assessments isn’t necessarily simple. The evaluation of current energy consumptions must be thorough and honest, and the projections have to be complete and reality-based.

“It’s really coming through with a quantification of what is their today-spend at an op-ex level, and then looking at what you would do with a performance contract to project into the future,” said Allen Breeze, Schneider’s senior vice president of power business.

Of course, leadership must have the will to make changes if efficiency is actually going to be enhanced.

As the director of the Health Safety & Environment division at TRW Automotive, a major car parts supplier, Rick Bell visits numerous plants around the country. He has dozens of facility managers with hundreds of wish-list projects big and small that would streamline operations and cut costs.

Related: The Rise & Impact of Smart Cities

“I went to my manager and I said, ‘Hey, how about we put aside $3 million of capital to invest in energy savings?,’” Bell recalled. The answer, in a nutshell, was that there’s no money for special pet projects.

“Our CEO and whatever’s focused on different things,” he said. “We’re building 20 plants in China.” These new Chinese plants might provide Bell the chance to implement new efficiency standards, hopefully thereby planting the seeds of a more open-minded corporate attitude toward energy efficiency.

“It’s a hell of a lot easier to put an energy-efficient compressor in than to try to make the compressor they bought last year, more energy-efficient,” he said. “I’m going around banging the drum. I’m really struggling to figure out how to motivate them,” he said. “We will get there – we’ll get there, but it’s a struggle.”

Once you’ve made the investments to increase efficiency, then what? Andy Schonberger is the director of Earth Rangers Centre for Sustainable Technology, an environmental education facility for children in Ontario, Canada. The LEED-gold certified facility uses a multitude of passive and active energy efficiency tools and monitors the facility’s energy and water use across 80 subsystems through an extensive metering system. The building even has its own waste water treatment facility which recycles 98 percent of waste water back into non-potable uses.

So it might not seem that Earth Rangers has a lot left to do when it comes to efficiency, but Schonberger said there is always low-hanging fruit.

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About the author

Aaron Stern - Managing Editor
Prior to becoming the managing editor of CI, Aaron was a content editor for TechDecisions. As a reporter he has covered local, national and international news. Follow him on Twitter: @aarondstern.
View all posts by Aaron Stern
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