Market view: Why energy managers are needed more than ever

The advantages for a utility to reduce its energy usage are easy to understand: lower energy consumption means a reduction in both bills and emissions; a simple win for any company.

Fewer people understand why an energy supplier would be keen to help its own customers cut their consumption: surely that is like Cadbury’s asking people to eat less chocolate or Evian telling customers to drink less mineral water?

With the market changing rapidly however, the ability of energy suppliers to offer innovative services (for example energy management training) that boost customer retention has become widely apparent. Happily for all concerned, this diversification represents a clear win-win for suppliers and their customers.

The savings that can be made through good energy management are substantial. With the market in flux as more intermittent supply joins the grid, and a growing number of thermal plants being taken offline, policy makers are increasingly keen to reward flexible demand. The penalties for non-compliance with policies such as the Carbon Reduction Commitment meanwhile are stringent – up to £5k per day.

It’s more important than ever as a result for organisations to have a dedicated energy lead. Those that can hire or train up a competent Energy Manager will see an immediate impact: there are few roles, after all, that can help you to increase your operating profit without affecting manpower or processes. An energy manager who works with a building management system (BMS) to reduce the building’s out-of-hours base load by 70 per cent, for example, is generating savings that directly increase your EBIT.

So, what does an energy manager do, exactly?

Energy managers come from many backgrounds including, but not limited to, mechanical and electrical engineering; risk, facilities or environmental management; data and business analysis and administration. Very few, if any, started their careers as energy managers, while many inherited or designed their databases and processes from scratch.

A good energy manager will not just be providing a reduction in overall energy costs via a cheaper tariff or reminding staff to turn off their computers. They will be looking at wider utility costs and legislation across energy, water, waste and transport to ensure compliance, setting ambitious targets, creating and implementing strategy and projects to achieve them.

To do so, energy managers need to understand building management: not just BMS, but heating, ventilation, air conditioning (HVAC); water consumption; waste management/disposal; lighting; data analysis; invoice validation and payment.

But won’t the future of energy management be automated?

No matter how sophisticated management systems get, informed human decisions will be needed for everything from handling DSR to BMS. With regard to supply interruptions and DSR for example, it takes human intervention to decide on policy, manage contracts and handle transmission use of system, distributed use of system costs or optimise opportunities from TRIADs and other non-commodity opportunities.

Setting up a BMS and making sure it is optimised needs a human touch too. This can mean setting the BMS policy or standard for the system you buy and install. If multiple buildings are of different age, for example they will require tackling in different ways, with human decisions needed on what base load of the building the BMS should work towards and how they can be best equipped to deliver on those targets.

What’s in it for you u(tilities)?

Some customers remain cynical that utilities genuinely want to help customers drive down their costs. The fact is that all customers want to reduce their energy bills: utilities understand that if one supplier doesn’t help, another will. Moreover, utilities can increasingly make better margins on saving customers money than selling energy.

For that reason, many are increasingly offering energy management qualifications and providing services like Npower’s Energy HQ: a service hub from which we can advise on or assist with energy opportunities ranging from DSR to ISO50001. This can also include procurement of Flex contracts, which allow customers to purchase energy directly from the market; most utilities will buy one on your behalf within an agreed strategy and budget (something an energy manager can create).

Walking the walk is important: large diverse energy/utility companies can be an example of what can be done to reduce energy usage, cost, carbon emissions and waste going to landfill. At Npower we have saved over £6.46 million pounds in energy bills; reducing energy usage by over 52 per cent to 28.9GWh/pa, reducing energy spend by over 44 per cent/pa, reducing carbon emissions by 53 per cent/pa and increasing recycling from 40 per cent to over 82 per cent.

When we sit down with energy managers (too often still someone simply seconded from an accounts department for the duration of the meeting) they are frequently astonished at the savings that can be made for their companies. Speaking with someone who has a holistic understanding of the challenges and opportunities in energy management is always a pleasure, as is describing the scope of opportunity for fiscal and emissions savings, and I hope that more companies look at how they can train someone to best fit this hugely important role – for your bottom line and for the planet.