What Is Energy Management?

By William H. Mashburn, P.E., CEM

What is Energy Management? Some years ago, a newspaper headline stated, “Lower energy use leaves experts pleased but puzzled.” The article went on to state, “Although the data are preliminary, experts are baffled that the country appears to have broken the decades-old link between economic growth and energy consumption.”

For those involved in energy management, this comes as no surprise. We have seen companies becoming more efficient in their use of energy, and that’s showing in the data. Those that have extracted all possible savings from downsizing are now looking for other ways to become more competitive. Better management of energy is a viable way, so there is an upward trend in the number of companies that are establishing an energy management program. Management is now beginning to realize they are leaving a lot of money on the table when they do not instigate a good energy management plan.

With the new technologies and alternative energy sources now available, this country could possibly reduce its energy consumption by 50% — if there were no barriers to the implementation. But of course there are barriers, mostly economic.

Therefore, we might conclude that managing energy is not a just technical challenge, but one of how to best implement those technical changes within economic limits, and with a minimum of disruption.

Unlike other management fads that have come and gone, such as value analysis and quality circles, the need to manage energy will be permanent within our society.

There are several reasons for this:

• There is a direct economic return. Many opportunities found in an energy survey have less than a two-year payback. Some are immediate, such as load shifting or going to a new electric rate schedule.

• Most manufacturing companies are looking for a competitive edge. A reduction in energy costs to manufacture the product can be immediate and permanent. In addition, products that use energy, such as motor driven machinery, are being

evaluated to make them more energy efficient, and therefore more marketable. Many foreign countries, where energy is more critical, now want to know the maximum power required to operate a piece of equipment.

• Energy technology is changing so rapidly that state-of-the-art techniques have a half life of ten years at the most. Someone in the organization must be in a position to constantly evaluate and update this technology.

• Energy security is a part of energy management. Without a contingency plan for temporary shortages or outages, and a strategic plan for long range plans, organizations run a risk of major problems without immediate solutions.

• Future price shocks will occur. When world energy markets swing wildly with only a five percent decrease in supply, as they did in 1979, it is reasonable to expect that such occurrences will happen again.

Those people then who choose or in many cases are drafted—to manage energy will do well to recognize this continuing need and to exert the extra effort to become skilled in this emerging and dynamic profession.

The purpose of this chapter is to provide the fundamentals of an energy management program that can be, and have been, adapted to organizations large and small. Developing a working organizational structure may be the most important thing an energy manager can do.

From: Energy Management Handbook, 7th Edition, The Fairmont Press