Why energy management makes good business sense

There seems to be a low level of understanding of what energy management is even in many established organisations. Many are not aware that energy management is a very effective strategy for lowering business costs in any building, facility, site or district.

Energy management deals with actual energy (electricity, gas, steam, heating and fuel oil) and water consumption, which an organisation has complete control over. Energy management is:

  • measuring and monitoring energy and water consumption
  • identify opportunities to save energy and water by analysing data
  • implementing measures to use energy and water more efficiently

We take a more detailed look at each of these areas in our article ‘What is energy management’. For now it is enough to say that optimal management of existing energy resources and water with the aim of improving a business’s energy efficiency ultimately leads to cost savings.

For instance, by lowering your thermostat by just 1˚C, you can save around 5% of energy used for heating per year or by replacing an old fuel oil boiler with a condensing gas boiler you can lower energy costs by 73% (UNDP). Energy efficient lightbulbs, such as halogen lightbulbs, compact fluorescent lamps and LEDs can typically use about 25%-80% less energy than traditional incandescents, saving you money and they last 3-25 times longer.

But energy management makes business sense on many more levels. In addition to the economic benefits, energy management…

REDUCES RISK TO YOUR BUSINESS FROM RISING ENERGY PRICES.

Energy management can help protect the business from rising energy prices and supply shortages. With growing demand (an estimated increase of 48% between 2012 and 2040 according to the International Energy Agency) and shrinking supply of fossil fuels and fresh water, the cost of energy and water will continue to rise. This could seriously affect the profitability of your company, especially if you are a high energy consumer. By reducing your demand for energy and water and therefore your dependency, you reduce the risk to your business.

There are social and environmental advantages to reducing energy consumption, such as preserving fossil fuels and minimising impact on the environment. This is increasingly important to the reputation of schools, as students, teachers and parents become increasingly aware of climate change.

BE ONE STEP AHEAD OF THE PUSH TOWARDS SUSTAINABILITY

As a member of the European Union, Croatia needs to achieve the “20-20-20-targets” set by the EU, that is Croatia has to reduce greenhouse gas emissions by 20% below 1990 levels, increase energy efficiency by 20% and achieve a 20% share of renewable energy in total energy consumption by 2020.

The Government’s fourth National Energy Action Plan covering the period 2017 – 2019 outlines various programs with the aim of achieving the EU’s “20-20-20 targets”. The plan includes a series of funding opportunities to incentivise energy retrofit projects in the manufacturing industry, the public sector, the tourism and commercial sector as well as the housing (family homes and residential buildings) and construction sectors.

If you start investing now your business will be in a better position in light of any sustainability standards, targets and regulatory requirements that you are supposed to be meeting or will have to in the near future… AND you can apply for financial resources to do it.

REDUCE YOUR IMPACT ON THE ENVIRONMENT

By reducing water and energy consumption, energy management also reduces a business’s impact on the environment for the greater good of our planet. If we use less water and less of an energy source, we contribute to resource conservation, which in turn helps lower energy costs by preventing future resource depletion.

Furthermore, fossil fuels – oil, coal and natural gas – are power sources that create high carbon emissions. Reducing the demand on fossil fuels as a power source is seen as a key solution to the problem of reducing greenhouse gas emissions and therefore of climate change. According to the International Energy Agency, improved energy efficiency in buildings, industrial processes and transportation could reduce the world's energy needs in 2050 by one third, and help control global emissions of greenhouse gases.

So, while progress continues to be made in the field of sustainable energy sources like solar, wind and biomass, businesses can start making a difference on their own ground. Energy management remains the easiest — and single most cost-effective — way to cut energy use. And why not make use of the financial incentives provided by the European Union to reduce investment costs and shorten the time and increase the rate of your business’s return on investment.