28
Industry Talk
@green | July-August, 2020
Energy –
a controllable
resource
Banks, Insurance ,
Companies
New investments
Competitors
Customers
Market pressure
Technology core
business
Suppliers
The Company
Legal Pressure
Taxes
Authorities
Service
Policy
Know How Transfer
Utilities
Financial Pressure
Service
ESCOs,
Consultants
Industrial
Associations
Using it efficiently
helps to increase
profits by reducing
costs
DEMAND
SIDE
By Ir Dr K. S. Kannan
Ir. Dr. Kannan is Professor
Emeritus, UTM currently
attached to ISI Ventures, UTM.
He is a professional engineer
registered with the Board of
Engineers, Malaysia and a
Chartered Engineer registered
with the Engineering Council,
U.K. He is a Fellow of IEM
Malaysia, IMechE UK and
ASHRAE USA.
He is a local energy
consultant/trainer and
has more than 30 years of
experience in energy research
and consultancy including
collaboration with international
energy organizations. His
expertise is in energy efficiency
practices & technologies. He
has served as the National
Project Manager for the UNIDO-
GEF project on ‘Industrial
Energy Efficiency for Malaysian
Manufacturing sector’ from
December 2011 to April 2017.
He is the Technical Advisor
for UNIDO in Malaysia.
Access to energy is becoming more
costly and environmentally damaging.
The era of cheap energy is coming to
an end in many countries
Organisations of all types and
sizes increasingly want to reduce the
amount of energy they consume. It is
driven by the need or desire to:
• reduce costs,
• reduce the impact of rising prices,
• meet legislative or self-imposed carbon targets,
• reduce reliance on fossil fuels, and
• enhance the entity’s reputation as a socially responsible
organisation.
In tandem, governments increasingly want to reduce
the Greenhouse Gas Emissions of their citizens and
industries and are imposing legislative mechanisms to
compel carbon reduction more and more frequently.
The effective use of the Energy Management System
(EnMS) will help organisations of any size to manage
their energy use sustainably. This will result in:
• Reduced costs
• Reduced environmental impact
• Increased competitiveness
It is a scarce organisation that cannot make significant
reductions in its energy costs by implementing small
changes in how energy is used. The simple fact is rarely
accepted by top management in organisations
Energy cost can be reduced significantly
– It may not require a financial investment
A systematic approach will lay the foundations for significant
and sustainable cost reduction in energy use for
the organisation of all sizes
It is not a difficult technical challenge; it is a challenge
to how organisational resources, including energy and
people, are managed.
Even in organisations with world-class energy
performance, there is always room for improvement.
In Denmark, one of the world’s most energy-efficient
economies, it is estimated that a further 40 per cent
improvement is possible using currently available technology
and best operating practices.
What Is Energy Management?
• “The judicious and effective use of energy to maximise
profits (minimise costs) and enhance competitive
positions.”
• “The strategy of adjusting and optimising energy,
using systems and procedures to reduce energy
requirements per unit of output while holding constant
or reducing total costs of producing the output
from these systems.”
• Energy management is effecting organisational,
technical and behavioural actions in an economicallysound
manner to improve the energy performance of
an organisation.
• Energy management means systematic attention to
energy to continually improve the energy performance
of an organisation and maintain these achieved
improvements. It ensures that the organisation continuously
passes through the cycle of making policy
(including evaluation of objectives), planning actions,
implementing actions and checking results, reviewing
progress and updating policy and objectives as
required.
• Energy Management:
– is a management process to proactively assess,
manage and measure energy usage to assure that
energy has been used efficiently
– refers to a scheme of management rather than the
implementation of specific hardware
– will provide companies with technical and
Figure 1: Industry Stakeholders
management strategies to increase energy efficiency,
reduce costs and improve environmental
performance
– covers all aspects of energy consumption, technical
and non-technical
Effective tools/instruments
for industrial energy efficiency
From an energy policy maker’s perspective, industry
– as every other target group has to be considered as a
customer. If the industry does not realise energy savings,
a tool/instrument has to be considered a failure. Capable
tools/instruments have to be customer-focused and
tailored and therefore, can be defined by the following
characteristics:
• It reaches the customer
• It draws the attention of the customer
• It convinces the customer to act (decide to realise
energy savings)
• It makes the customer repeat action (continued energy
savings)
How to reach industry
The best channels to “carry” energy efficiency to the
industry are possibly provided by using the “day-to-day”
business relations of a company (stakeholders), the
industry’s network (see Figure 1). By feeding the energy
efficiency message effectively through these channels,
the energy issue could be integrated in the industry’s
existing business procedure. Additionally, we have to
know much more about our customer. Is the company
big or small, energy-intensive or not? Does it work transnational
or instead on a regional/local level.
How to attract the industry’s attention
To attract attention, we have to know that a company is
not a black box. It has an owner, is led by management
and has staff doing a different type of work. If we reach the
company, we might have to deal with financial managers
as well as site managers, with technical as well as with
marketing people. Thus, depending on their respective
professional background and education, very different
drivers will attract their attention. These drivers can
come from inside the company as well as from outside.
• Internal drivers for energy efficiency can be situational
factors, e.g. all kinds of problems affecting the
core business (issues with quality, processes, production,
resources) or opportunities (end of technical
lifetime, an extension of production, new buildings,
new products, new personnel). They present a situation
in which a company might have to invest anyway.
Why not link energy efficiency to it?
• External drivers for energy efficiency are all kinds of
pressure (financial, legal, market) but also incentives
(subsidies, awards) or positive examples (from suppliers,
other companies, planners etc). With pressure,
a company has to act, while successful models can
provide an impetus for imitation.
In most cases these drivers present situations which
involve at least one of the stakeholders, e.g. when facing
a technical problem, a company has to contact a supplier
for new technology, maybe a bank for money and
a consultant to give support. These business contacts
can be used as a “carrier” for energy efficiency. Figure
2 indicates the services that can be provided by the
stakeholders.
How to make industry act?
Whether an energy efficiency measure will be realised
by a company (or not), is in the end decided by the man-