Monday, February 27, 2012

We need an army of energy super-warriors, to save the country billions in bills

800 organisations who signed up to the Carbon Reduction Commitment (CRC) have yet to invest in significant energy management programme, according to the information published on the energy efficiency league website.

Why are these organisations, which represent 40% of those signed up to the commitment, yet to take advantage of the considerable financial, carbon and energy savings they could make?

One answer, postulated by the authors of a new report, is simply a lack of knowledge of the returns that can be expected at board level from a programme of energy efficiency at board level.

But why don't they know? Surely you'd think there were enough people telling them?

Well, perhaps one reason for this is that they don't have anyone in the company with sufficient clout to identify the opportunities and to persuade them to make the change.

The authors of this report should know what they are talking about. They're the energy managers of top companies: Stephen Barker, the Head of Energy Efficiency & Environmental Care at Siemens; Richard Tarboton, Director of Energy and Carbon at BT; Mervyn Bowden, the Head of Energy Management at Marks & Spencer; and Trevor Seddon, Johnson Controls' Director of Energy Consulting.

Notice that none of these are actually called energy managers. It's a sign of how the discipline is changing.

Their report, the Evolution of the Energy Manager, is published by Acre, a recruitment consultancy specialising in corporate responsibility, energy efficiency, carbon, environmental and health and safety.

For these energy efficiency slackers, it's not persuasive enough to cite examples of other companies who are saving money by saving energy, such as BT who saved £35m in two years from its programme, with investments of less than £15m per year.

Or M&S, whose Plan A generated £70m in profit in 2010, with energy efficiency being the biggest contributor.

Look, here are a few more examples of financial paybacks from selected energy efficiency programmes:

CompanyInvestment (£m)Payback (years)
Barts & London NHS1.21.5
Imperial Tobacco2.53.1
Johnson Controls8.13.1

Source: The Green Monday Energy Efficiency White Paper.

If you are an organisation which hasn't yet begun to take seriously the idea of energy management, then it's quite possible you would just look at this list and say to yourself, “Fine, but my organisation is not like any of these companies. They can afford to do something like this, and our needs are quite different".

Magic numbers

Well, surprise surprise, this isn't true. BT's Richard Tarboton says that any company can find energy savings, and the way to start doing it is to use an economic tool called the Marginal Abatement Cost Curves (MACC) to persuade members of the board of the economic case. [This link is to a page that tells you how to make one in Excel.]

MACCs crunch numbers to present the 'whole life costings' of taking a particular measure and can easily establish an argument for spending in order to save.

MACC curves enable a visual comparison between different projects, comparing their cost to implement and the amount of carbon or energy they can save.

They can also help you figure out what the price of carbon needs to make implementing a project more financially viable than not doing so.

The warrior wielding this powerful tool should be someone with leadership qualities, someone who is directly connected to the company's core business strategy.

This is not your traditional image of an energy manager. Maybe 20 years ago he (and an energy manager was usually male) could be characterised as someone technical, nerdy and permanently attached to a clipboard.

They would be marginalised, relatively powerless, and, if they were lucky to have an office at all, it would probably be under the stairs or in the boiler room.

Their role would previously have been more to do with the procurement of energy. Now it is just as much to do with its demand management and reduction. In other words, it is a strategic role.

This is why modern energy managers need to have super-powers; not just able to do their job but also possess super leadership qualities and super communication skills.

They need to be able to get across to their colleagues that issues like energy, carbon management and sustainability are not peripheral, separate topics, but indistinguishable from any other matter that is of primary concern to the organisation.

Just as ‘the environment’ can no longer legitimately be seen as something which is ‘out there’ and divorced from human activity, or indeed an individual's very day-to-day existence, so sustainability and energy use are a facet of everything any individual in an organisation does or has responsibility for.

The modern energy manager has to be able to make the case to anyone who says they don't have the time to think about energy use, that it is, on the contrary, part of their job function to think about energy use.

And, increasingly, companies employ Chief Sustainability Officers, for whom energy management is just a subset of their responsibilities.

The larger the company, the larger the energy management team, which will include members with the following skills: the ability to manage, work as part of a team, do marketing, management and accounting, have a knowledge of appropriate standards, data management, technical matters, efficiency technologies, generation technologies and keep up to speed with regulations.

As M&S' Mervyn Bowden says, “The modern energy manager needs to have wide commercial experience, with a full range of management skills to cope with a demanding role.

"A role which includes large budgets, managing risk, a need to influence others to achieve your aims, programme management and people management - to name but a few”.

In other words, cross someone with the charisma of Angelina Jolie the organisational ability of Sebastian Coe (who's organising the Olympics), the business sense of Richard Branson, and the intellectual prowess of Brian May, and you're close to what it takes: a waste-fighting superhero.

Currently, there are up to 3000 energy managers in the country, according to ESTA, the Energy Services and Technology Association, the energy management industry body.

As their responsibilities grow, so does the salary they can expect to earn.

Beginning at between £22,000 and £33,000, after five to ten years' experience they can earn up to £70,000.

Beyond that, according to recruiting experts Hays, at least 10% can expect a salary over £88,000, with some earning over £100,000.

Not bad.

The average (meaning based on average experience) is £44,000.

This is a direct measure of their value to the company in terms of saving money.

In other words, a good energy manager is worth their weight in gold, and essential to any serious organisation that wants to thrive in today's increasingly difficult conditions.

An often unsung superhero fighting an essential battle in the war against waste and climate change. We need an army of them.

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