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Energy Savings Project: How organisations Save Big $$$ on Energy Bills

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Large market electricity prices and gas prices have soared in recent years due to volatility in supply and reliability concerns in the national energy market. Large energy users including manufacturers, hospitals, office buildings, schools etc, are bracing for massive bill shock when contracts are up for renewal later this year. A doubling of energy costs is expected after energy retailers announced sharp increases to energy prices – effective July 1, 2017. Consequently, more and more organisations are looking at ways to save money and reduce their energy bills.  The most effective way to reduce energy bills is to invest in an energy savings project (ESP).

This post explains what these projects are and how organisations can benefit from an energy savings project, particularly performance based projects with guaranteed energy savings.

 


 

What is an Energy Savings Project?

An energy savings project is a series of activities that involves identifying opportunities to actively reduce energy usage in a building or facility, and carrying out a detailed project plan to install and commission energy conservation measures and energy saving equipment that yield measured improvements in energy efficiency and energy savings in both economic and/or environmental terms.

Projects like these are commonly referred to as energy efficiency retrofit upgrades or green building upgrades. They involve upgrading, refurbishing or optimising equipment for maximum energy efficiency.

An energy savings project is typically a business case justified investment that includes a detailed account of capital expenditure and KPI’s such as savings generated, payback periods and return on investment.

Energy savings projects can vary in scope and size. Some are small and focus on specific areas within an organisation or facility that may take several weeks to complete. While others are large and complex projects that may take several months or in some cases, years to complete.

Larger projects that involve significant capital upgrades tend to generate more energy savings.

Energy savings projects are usually designed and carried out by a specialist service provider, but  some organisations that have sufficient resources and in-house expertise are capable to design and implement comprehensive energy savings projects. For most organisations however, implementing energy savings projects can be a distraction as its not a core activity aligned to their mission or vision statements. It is recommended that you find a trusted energy savings firm that has the resources and expertise to deliver an energy savings project for your organisation.

 

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The Benefits of an Energy Savings Project

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There are many reasons why organisations undertake these projects but the two main reasons include, (1) to reduce energy bills (2) and reduce the environmental impact of their operations or facilities.

Energy saving projects that include a variety of Energy Conservation Measures (ECMs) could achieve anywhere up to 50% in energy savings. Imagine the impact to your organisation’s bottom line if your energy costs are slashed by up to half? This is a very compelling reason for organisations to undertake an energy savings project.

But that is not the only reason why an organisation would invest in an energy savings project. Organisations may also develop sustainability targets in a bid to demonstrate their corporate social responsibility and genuinely promote environmental sustainability. This may be done purely for PR purposes, which may have a positive influence on share price or a brand’s goodwill, however that doesn’t negate the fact there are genuine environmental benefits from an energy savings project.

Government departments would typically follow a prescribed sustainability policy established by State government authorities and Australian State governments favour the Energy Performance Contracting process, which is essentially a large scale performance-based energy savings project. Several Energy Services Companies (ESCOs) bid to win the energy performance contract; a single ESCO is then awarded the contract and becomes contractually obliged to deliver on project outcomes. A similar performance based energy savings project model was developed by Ecosave for non-government organisations and the commercial sector that incorporates similar performance guarantees.

In any case, an energy savings project helps organisations with their sustainability objectives, by reducing overall energy consumption via a range of ECMs and high efficiency equipment. Plant or equipment that’s more energy efficient, uses less energy, and by extension means a reduced demand for energy; in Australia, energy is sourced mainly from non-renewable and often carbon emitting sources (e.g. coal or gas fired power plants), therefore lower lower energy usage leads to reduced demand for energy generation thereby reducing greenhouse gas emissions.

In summary, the main benefits of an energy savings project may include:

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Energy Conservation Measures (ECMs) in an energy savings project

Energy savings project (s) or energy efficiency retrofit upgrade projects involves a combination of energy conservation measures (ECMs), which may include installing new energy saving technology or refurbishing and optimising existing equipment. ECMs typically considered in energy savings projects include:

 

There are a multitude of energy conserving devices and technology that can form part of an energy savings project; the main objectives being to maximise savings, reduce energy costs and promote sustainability.

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What to consider when thinking about undertaking an Energy Savings Project

The first thing to do is develop an understanding of your organisation’s key drivers and identify specific objectives in relation to energy savings.

What are the business’ true objectives?

Is it to reduce energy costs in response to soaring energy prices ?

Is it to improve cash flow?

Is it to reduce business risk?

Is it to improve profitability?

Is it to promote the organisation’s corporate social responsibility, being green and sustainable, or meet a sustainability requirement and achieve a specific target within a specified time frame?

All of the above?

The next step is to identify financial parameters that would define the nature and scope of the energy savings project. Typically, the CFO, CEO and Board would need to deliberate and decide on the following:

 

The final step is to contact a trusted energy services company that specialises in energy saving projects. One that has a long and stable history, deep experience across multiple industries and a proven track record of success with reputable clients.

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Are all Energy Savings Projects created equal?

No two projects are the same and depend greatly on the extent of capital upgrades or scope of works and the specific facility or site in question.

Some energy savings projects are undertaken internally by in-house sustainability managers or facility managers. However, this often results in a long drawn out process and typically comprise smaller ad hoc projects, more often than not due to a lack of resources such as qualified personnel, expertise and focused time.

Most energy saving projects are outsourced to a specialist energy efficiency and energy services company (energy efficiency ESCO ) that are experts at designing and implementing energy saving solutions.

To ensure results are maximised and financial risk brought to a minimum, you should consider outsourcing to an energy efficiency ESCO that has the developed resources and expertise to deliver an energy savings project on time and on budget.

However, no two energy efficiency ESCOs are the same.

Several well known ESCOs are not product independent, meaning they either own, manufacturer or exclusively on-sell products to their customers. This may bring up issues of biased energy advice and recommendations given they have vested interests in pushing their particular product line without giving much thought to the best ECM solution. What’s more, is that non-independent ESCOs use ineferior quality ECM devices or equipment that are not fit for purpose or fail to meet ISO standards or the Australian standards equivalent. This is particularly prevalent in LED lighting projects where there are specific LUX levels required for various environments.

On the other hand, Independent ESCOs – or product independent ESCOs – does not sell any products, rather they sell their professional services. Therefore, an independent ESCO has no vested interest in recommending a particular ECM product for no other reason than it is the best solution; it meets acceptable standards and achieves the desired efficiency outcomes.

Ecosave is fiercely independent and since 2002 has become the trusted energy savings partner to hundreds of clients…More

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What to look for in an Energy Services Company (ESCO) for your energy savings project

 

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What makes Ecosave’s Guaranteed Energy Savings Project different?

Ecosave has developed a unique performance based service model that guarantees savings and caps the project cost with a single fee for the entire project.

Ecosave’s Guaranteed Energy Savings Projects, or GESPs are inherently different because its a performance based project delivery model, which means savings are guaranteed and Ecosave carries the technical and financial risk if the energy efficiency retrofit upgrade doesn’t initially achieve the state objectives. In the unlikely event that savings are not achieved, additional upgrades or efficiency optimisation will be carried out at no extra charge. Should that not be possible, then the difference between projected savings and actual savings will be refunded to the client. This means that the financial risk typically associated with a price-driven tenders is significantly reduced, making the investment in energy efficiency retrofit upgrades even more attractive.

Ecosave GESPs are initiated by a comprehensive energy audit outlining baseline energy consumption and overall assessment of building performance. Specific energy conservation measures (ECMs) are recommended and a fixed price proposal is presented for Ecosave’s end-to-end service to deliver the entire project.

The results are guaranteed and the project fee is capped. This ensures clients get maximum energy savings while reducing financial risk.

Learn more about Ecosave’s unique performance based energy efficiency solutions. … More

To find out more and discuss how Ecosave can help your organisation save money and resources, call 1300 55 77 64 or send us an online request for a FREE 30 minute phone consultation with an Ecosave Solutions Architect.  

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Case studies of Ecosave’s Energy Savings Project (s)

 

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Ecosave is an independent energy services company founded in 2002.

We specialise in the following energy services:

 

 

Contact us for an energy and water saving assessment

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