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Energy Procurement - Implementation Of An Energy Management Program
There are many ways to do this. Many organizations have set rules and policies concerning the implementation of operational programs and capital budgets. Be sure to understand the approval process thoroughly (this should have been covered in the early stages of the strategic plan development). A good cross sectional energy management team will assist you in navigating the approval and implementation process. There are no substitutes for thorough planning and good communication at this stage. Regardless of whether you are implementing an awareness program or a major capital retrofit there are some basic steps to ensure success.
Project Development
Step 1
In most cases I recommend starting with a pilot project. The pilot project provides the best guarantee for success of a full scale project or roll-out. The first step is to select a small sample of facilities or sites that would be representative of the larger project. The selection can be based on scoping audits results and baseline analysis that would have been completed in the Opportunity Assessment phase (check out our article on Developing an Energy Management Program for more details on the Opportunity Assessment phase).
Step 2
The next step would be to collect detailed information from the selected sample sites. These details are important in preparing the scope of work for the pilot project. This may require hiring a qualified consultant to complete an audit and prepare the scope of work on your behalf. It is a good idea to involve contractors that you intend to invite to bid on the scope of work as they can provide valuable and knowledgeable input.
Step 3
With the scope of work prepared, the next step is to put the pilot project out for bids. It is important to follow corporate energy procurement policies when doing this. At the pilot stage, it may be worthwhile to select a couple of contractors so that you can evaluate their performance for possible inclusion in the program roll-out. Additional monitoring should be included in the pilot project so savings can be accurately measured. Make sure to allow adequate time before and after the work is done to collect enough monitoring data.
Step 4
Upon successful completion of the pilot project, the next step is to prepare the roll-out plan. The results of the pilot will be useful in selecting suitable sites, estimating costs, benefits and preparation of the roll-out schedule.
Analysis from the pilot program will goes into the preparation of the final business case. This business case is to be presented to senior management in order to get authorization to proceed with full a scale project. This business case should be brief and clearly present the key technical and financial parameters of the project. Be sure to identify and include any potential government and utility incentives in your analysis. Life cycle cost benefit analysis (LCCBA) is the best way to present the financial benefits. You should also include cash flow and P & L impact. If the project is good and the business case is thorough you should expect a speedy approval to proceed. At this point it should be noted that every day of delay means another day of lost savings.
Project Approved, on to Implementation
You should follow your corporate energy procurement policies once you have received approval to proceed. Be sure to allow enough lead time to submit and receive approvals for government and utility incentives. Communications is key during the implementation phase. Facility managers and employees and in some cases customers need to be aware of what is going on. This will minimize disruptions and encourage full cooperation during the project. Awareness of the project and your energy management objectives will go a long way towards ensuring that savings are not compromised once the contractor have left the site.
You can expect a few visits from "Murphy" during the course of the project. It is not uncommon for contractors to suggest alternate equipment or configurations. In these cases it will be necessary to revisit the business case in order to assess the impact of the suggested changes on the financial goals of the project. This will need to be done during the project and again once the project is complete.
Proper commissioning and optimization are also important to success. The engineer and/or the contractor must ensure that the installed systems have been properly commissioned and the performance is specified in any bid documents. Following commissioning, there should be a period of optimization, where the performance of the system is continuously monitoring and fine tuned to maximize energy savings. This could take 3 months to a year to complete.
Once the system is working well, it is important to revisit the business case and update it with actual as-built information. This step proves to management that you have good accountability. This documentation is also a requirement for payment with most incentive programs and can be used in the creation of emission credits. Hopefully the results are as expected. If they are better or worse than expected you should be able to explain why and provide a clear picture of lessons learned. As Babe Ruth once said, "Never let the fear of striking out get in your way." This type of presentation will strengthen your credibility with senior management and facilitate approval of future projects.
At this point don't forget to celebrate your success. A good case study will go a long way towards promoting your program both internally and externally and provide momentum for your energy management program.
Original Post: energy procurement
About the Author
Rob Guthrie is an expert in energy procurement. If you want more information about types of energy procurement, check more article.
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