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Section 1.2
Why Energy Management is
Important

Why Energy Management is Important

Learning Objectives & Contents

Awareness of:
• Global Trends on Energy, Economy and our Environment
• Non-Technical ”Drivers” that create the need for energy projects

• Selling Points for Energy Projects (pursue after your CEM exam)
• Energy Projects only save $$ when they are approved and implemented

• Additional Resources (pursue after your CEM exam)

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Big Picture: Energy, Environment & Economy

We are all linked together on a planet with limited resources
Energy access & affluence is growing!

Thus reducing energy waste:

• Preserves resources and our environment
• Helps cost-competitiveness and our economy

Generally- the more energy management & conservation… the better.

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* 1 Quad = 293 TWh

100 Quads = 29 366 TWh

US Energy Flow 2019 (Pre-Pandemic ~100

4
Quads)
Certified Energy Manager® 2020
during Pandemic: was about490 Quads
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What is “Energy Management”

Energy Management: the use of engineering and economic principles to
control energy costs while providing needed services in buildings and
industries.

Generates energy savings via:

• Conservation and/or behavior change
• Improvements in energy efficiency
• Changing patterns of energy use
• Shifting to other sources of energy

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Interface Areas with Energy Management

• Productivity Improvement
• Lean Manufacturing, Total Quality Management,
• Six Sigma, “Treasure Hunts”
• Health & Safety… Especially post-COVID
• Water Conservation
• Renewable Energy
• Sustainability / GHG Management / Green Buildings
• Energy Savings projects help reduce the amount of carbon offsets needing to be
purchased as well as other “benefits” to a sustainability mission.

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“Drivers” that Create Demand for Energy Projects

• Cost-Competitiveness
• Special Tax Benefits or Utility Rebates (that do expire… creating a compelling event)
• Regulations and/or Requirements
• Government (national or local ordinances), SEC Filings, ESGs, etc.
• Industry-Related
• Sustainability Marketing and Image
• Occupant Comfort, Morale, Attraction and Retention
• Energy Independence, Self-Reliance or Resiliency
• Improved Product Sales or Image

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Science & Sustainability

Correlated: Temperature and CO2

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Science:
Temperature and
Solar Cycles

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Summer Temperatures Have Shifted

2004 – 2020

0.5
Cooler than average Baseline (1951 - 1980) mean
Average
0.4
Warmer than average The “extreme”
Frequency of Occurrence

Extremely hot temperature events used

0.3 to cover 0.1% of the Earth.
2020: covered 22.1%.

0.2

0.1

0
-5 -4 -3 -2 -1 0 1 2 3 4 5 6
Deviation from Mean

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Melting Ice:

Implications:
• Sea level rise
• Less reflectivity (more solar energy
is absorbed)

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Energy and CO2e Emissions

For fossil-fueled energy sources: when you use energy, you cause emissions.

Example: On average, 1 GWh used in the USA causes the following:

• 884 metric tones of CO2 equivalent emissions
• ~ 355,658 kg of coal being burned

When you reduce energy consumption, you usually reduce emissions.

EPA

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Basic Emissions Accounting/Reporting

Best Practice: When you save energy, publish your emissions savings too!

• Know how to convert kWh and fuel consumption to C02e

• Greenhouse gas calculators make it easy:

Equivalencies can help your audience EPA.gov

understand/relate… and approve your project!
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Emissions
Definitions:

EPA.gov

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Selling Points for Energy Management

• A typical low-risk, energy management project has a long lifetime and
yields a 25% to 50% return on investment, which is better than:
• Many other potential investments
• Compared to Energy Savings (a profit)…What would you have to do (how many widgets
would you have to sell) to keep an equivalent profit?
• Many renewable energy projects
• Also- if you reduce the energy consumed, you don’t need to buy as many renewable
products (# solar panels, size of a bio-reactor, etc.).

• But you must “position” the project such that it meets the customer
requirements, and so that the buyer sees it is a “better deal” for them

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Additional Selling Points for Energy Management

Additional Reading (after your CEM Exam)

“Energy Management Projects Out-Performed

the Dow Jones Index in 8 out of 10 years!”

Source: E. Woodroof (2018) ”Energy Efficiency BEATs Wall Street Returns”, Buildings.com

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Additional Selling Points for Energy Management

Additional Reading (after your CEM Exam)

Non-Utility Benefits:
• Maintenance, Material & Labor Savings
• Better Cost-Competitiveness
• Often, the Project ROI > Company’s Profit Margin
• Often, the Project ROI > Cost of Finance
• Improved “Green”, “Sustainable” Image
• Boost Sales and/or Employee Recruitment
• Ability to Meet Supplier/Govt. Requirements
• Reduced Need to Purchase “Offsets”

Source: E. Woodroof, W. Turner, W. Heffington and B. Capehart (2012) ”Energy Conservation also Yields:
Capital Operations, Recognition and Environmental Benefits”, Energy Engineering Vol. 109 (5).

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Additional Selling Points for Energy Management

Additional Reading (after your CEM Exam)

Non-Utility Benefits:
• Improved Building Value
• Tangible benefit to building owner

• Other external societal benefits

Free webinars: search “Selling Energy Projects” playlist on AEE YouTube Channel
Sources: E. Woodroof (2017) ”Increase Your Building’s Value with an Energy Project”, Buildings.com
International Energy Agency (2014) ”Capturing the Multiple Benefits of Energy Efficiency”

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Review
Awareness of:
• Global Trends on Energy, Economy and our Environment
• Non-Technical ”Drivers” that create the need for energy projects

• Selling Points for Energy Projects (pursue after your CEM exam)
• Energy Projects only save $$ when they are approved and implemented

• Additional Resources (pursue after your CEM exam)

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