The EMA Magazine I July-August Issue by The Energy Management Community

THE EMA MAGAZINE www.theema.org.uk | ISSUE JULY–AUGUST 2016

BREXIT: WATT NOW? What are the challenges ahead for Energy Managers?

LIGHTING & CONTROL LIGHTING Buyer’s Guide

TECHNOLOGY Motors and Pumps

RETAIL An interview with Boots

FOCUS

Finance & Investments

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ENERGY MANAGERS ASSOCIATION ENERGY PRODUCT OF THE YEAR 2015

contents

EMA MAGAZINE

4 6

CEO’s LETTER

Richard Felgate

EMA ANNOUNCEMENT ENTRIES ARE OPEN FOR THE EMA ENERGY MANAGEMENT AWARDS 2016

FEATURES

8 WATER AND THE BIG BANGERS 10 12 GANGMAN STYLE ENERGY COST WATT NOW?

By Lord Rupert Redesdale

By Prof Jacob Tompkins OBE

By Simon Ponsford

TECHNOLOGY

14 MOTORS and PUMPS

Energy assessment unlocks saving potentials

BUYER’S GUIDE

LIGTHING & CONTROL LIGHTING All your practical questions answered

CAREER & TRAINING

FINANCE

How to win investment approval from your board and financial manager

to tUrN 36 How THE COST OF ENERGY

26 28 14

into widgets

READERS’ LETTERS

38 CCL Reporting

Danny Clark, Technical Energy and Sustainability Manager at JLL

26 IN THE SPOTLIGHT CAREER PATH IN 28 ENERGY MANAGEMENT 30 THE PERFECT ENERGY MANAGER Have we missed anything?

INDUSTRY FOCUS

32 retail

An interview with Boots

THE EMA MAG AZINE • ISSUE JULY–AUGUST 2016

The underground life of a Generation Manager

CEO’s LETTER RICHARD FELGATE

EMA Chairman and Director at EnStrat(UK)Ltd

EMA Chairman’s Welcome Dear Reader,

THE EMA MAGAZINE • ISSUE JULY–AUGUST 2016

You get to play with the latest technology, purchase one of the largest outgoings your business may have, try and change the way your employees behave, present to the board and roll your sleeves up and get dirty in the plant room.

The life of an Energy Manager is certainly diverse and varied, but if you’ve just taken on responsibility for energy management, looking to make this your career or just trying to increase your knowledge, knowing where to start can appear to be rather bewildering and daunting. Here at the EMA and within our membership, we have an incredible amount of hands-on experience in delivering all aspects of energy management and the great thing about this growing community is their willingness to share advice and help out others.

One of the main aims of the EMA is to facilitate and encourage the sharing of this knowledge and best practice and to help establish the energy management profession at the heart of all businesses. There are many ways you can get involved and benefit from this, either through this magazine, the EMA members meetings, the courses run by the EMA and obviously at EMEX, which has become the industry’s number one exhibition and conference. So get involved, develop your skills or help someone new and let’s all help to get the recognition the profession deserves. Yours truly, Richard Felgate EMA Chairman

THE EMA MAGAZINE EDITORIAL

The Energy Managers Association theema.org.uk - Tel: 020 3176 2834 Edita Krupova; Editorial Enquiries & EMA Office Manager edita.krupova@theema.org.uk Jana Skodlova; Training, Skills & Business Development Manager jana.skodlova@theema.org.uk CONTRIBUTORS Richard Felgate, Rupert Redesdale, Prof Jacob Tompkins, Simon Ponsford, John Guthrie, Russell Fleetwood, Lisa Ward, Jana Skodlova, Sophie Longmate and Danny Clark. ART COVER © Jacques Descloitres, MODIS Land Rapid Response Team, NASA/GSFC ADVERTISING SALES Tel: 0116 3265533 Nigel Stephens, nigel@membertrade.co.uk Jas Singh, jas@membertrade.co.uk EMEX EXHIBITION SALES emexlondon.com - Tel: 020 8505 7073 Michael Jacobs michael@emexlondon.com Sarah Beaman sarah@emexlondon.com PUBLISHER Chris Asselin, chris@emexlondon.com Jason Franks, MANAGING DIRECTOR jason@heelec.co.uk Lord Rupert Redesdale CHIEF EXECUTIVE, EMA The EMA Magazine is published bi-monthly on behalf of the EMA by HEELEC Limited, the organisers of the annual energy management exhibition, EMEX. © 2016 HEELEC Limited, registered in England & Wales Company no. 8785975 VAT number: GB 176 1796 71 Registered offie: Treviot House, 186-192 High Road, Ilford, IG1 1LR No part of this publication may be reproduced, stored in, or introduced into a retrieval system, or transmitted in any form or by any means (electronic, mechanical, photocopying, recording, or otherwise) without prior written permission. Any information or material sent by advertisers and contributors, including advice, opinions, drawings and photographs, is the view and the responsibility of those advertisers and contributors, and does not necessarily represent the view of the publisher.

ANNOUCEMENTS

EMA ENERGY MANAGEMENT AWARDS 2016 ENTRIES ARE NOW OPEN! NEW CATEGORY ADDED: Water Product of the Year Entries for the following categories can be submitted on the EMA website until Friday 28 October 2016.

• Energy Manager of the Year • Junior Energy Management Professional of the Year • Energy Management Team of the Year • Energy Management Consultancy Service of the Year • Energy Reduction Project through Organisational Behaviour Change of the Year • The Most Inspiring Energy Reduction Project of the Year • Best Implemented ESOS Project of the Year • Energy Management Training Programme of the Year • Energy Reduction Product of the Year • Water Product of the Year • EMA Member of the Year – nominated by the EMA The EMA Award’s winners will be able to:

THE EMA MAGAZINE • ISSUE JULY–AUGUST 2016

• Use the EMA Energy Management Awards 2016 logo. • Have the category profiles included in The EMA Magazine and EMA website. • Highlight their achievements with published case studies (The EMA Magazine and website).

The winners and highly commended will be announced at a ceremony on Wednesday 16 November 2016 at EMEX, ExCel, London.

TO ENTER THE AWARDS, VISIT www.theema.org.uk

FEATURES by

LORD RUPERT REDESDALE

Chief Executive at The Energy Managers Association

Watt Now? The voters have made their choice clear and Britain will leave the EU. The result will have been welcomed by those who have campaigned long and hard for sovereignty but could be a problem for those who find their businesses affected. The argument that without the constraints of the EU there will be a boost to exports will not benefit the energy market as energy is mostly imported. Both sides agreed that there would be economic turmoil for the short term at least and the markets duly went into free fall after the result but how long will this last and how will it affect Energy Managers?

The timeline could be as short as two years but could be much longer. Article 50 will need to be invoked by Parliament but this does not have to take place There will be positives and negatives. Energy prices as immediately. No country has left the EU before so the stated by DECC before the referendum and disputed negotiations may well be protracted on how the process by no one will rise if we fail to make a beneficial trade is conducted; however, once Article 50 comes into force deal. The fall in sterling will make the purchase of energy the process cannot be reversed and will need to be and particularly gas more expensive. Britain relies to a completed in two years. The accepted wisdom is that the degree on the spot price, which will have an immediate rest of Europe will want an equitable deal which would effect, but those buying gas be simple to agree to, but this for the winter may well find will in all probability not be energy managers will become more projecting what the value of the case. The other member important which can only be a good sterling will be over the next states will have their own thing. Boards will focus clearly on year difficult and will have ideas of what a deal should to introduce a cost to deal look like and it needs to be costs such as energy especially if we with risk. There is likely to be ratified by all the other 27 enter a turbulent economic period. a turbulent period, in which countries. The short term each meeting to discuss the could stretch out for quite future relationship with the EU will cause a fluctuation in some time and this will make it even more difficult than sterling. Indeed, it is far from certain which politician will usual for significant investment to be secured from the lead the country during the negotiation period, which board for energy reduction. will now include a leadership contest, and this will hardly calm the nerves of the financial market. Once the process has been completed, the thorny issue of tariffs will need to be addressed. World Trade rules mean The positive side is that if energy prices rise, the role of that any country outside a free trade area has to impose energy managers will become more important which tariffs; energy is obviously an item tariffs apply to. Whilst can only be a good thing. Boards will focus clearly on there will be negotiations around a trade deal, it might costs such as energy especially if we enter a turbulent be difficult to argue the case for a deal that is better than economic period, which could be shorthand for recession. that in place as almost all the electricity is going one

THE EMA MAGAZINE • ISSUE JULY–AUGUST 2016

“

The challenge for Energy Managers will be that, even though companies may see reducing energy prices as important, investment decisions may well go on hold until clarity in the direction of the economy in the short term is understood. Clarity may take some time as the terms of the transition process have not even been discussed in Parliament, or with the rest of the EU, and this will lead to uncertainty in the short term. So the question is how long is the short term?

”

A factor that will have a major bearing on the course of the negotiations is who will be in charge. The allocation of Cabinet positions means that if there is a change of Secretary of State at DECC, that minister will in all probability reflect the power base of who is in power. The present Secretary of State, Amber Rudd, who is closely linked to George Osborne and an advocate of the In

campaign, may find her job offered to an MP from the exit camp. The Prime Minister is already stepping down in October so the new ministerial team will reflect the political ideology of the new leader. That might mean a significant shift in the direction of DECC policy. It is really difficult to predict what any new direction energy policy might take, but it is certain unless there are blackouts or the price of energy rises dramatically, it will not be a high priority. The decision has been made, but the fun is only just beginning.

THE EMA MAG AZINE â&#x20AC;˘ ISSUE JULYâ&#x20AC;&#x201C;AUGUST 2016

way. A trade deal does not have to be completed in a set period, the experience of other countries is that it may take decades to agree. Energy is almost certain to be linked to other areas of negotiation.

FEATURES by

PROF JACOB TOMPKINS OBE Managing Director at Waterwise

Water and the Big Bangers

THE EMA MAGAZINE • ISSUE JULY–AUGUST 2016

ot that long ago Britain was the dirty old man of Europe; our rivers, beaches and coasts were hideously polluted, and our environment was in a parlous state. By the time you have read this, we will either have sensibly decided to stay in the world’s largest market or insanely turned the clock back to a 1950s idol that never existed in the first place. No, this article isn’t about Brexit; it’s about water policy in the UK and the current state of water policy, and strategy in the UK can be summed up with a picture of a dish of sausages.

In the late 1980s, the Government realised that the water industry needed to invest in infrastructure, such as sewage treatment works upgrades. Privatisation led to a huge injection of cash that cleaned up the beaches and waterways. At the time, there was a very clear water strategy that was to use the markets to create investment, and if you were a water company CEO you knew that your job was to play golf and drink champagne with people from the city and to build stuff to improve the environment whilst borrowing against formal public assets to pay dividends and keep water prices down. Not my cup of tea, but it worked and the strategy was clear. By the late 1990s, it was clear that there needed to be another shake up, and New Labour beefed up the regulator and pushed the companies on leakage, demand management and customer service. At the same time, the European Commission started to develop the Water Framework Directive, the largest

piece of environmental legislation ever, which aimed to ensure good quality water across Europe and was adopted by countries worldwide (so even if we have left Europe and are drifting in the Atlantic when you read this, it is still relevant). This policy was led by the UK, and it’s nickname was ‘the English Directive’. Again, there was a clear water strategy, and if you were a water company CEO you needed to aim for ‘sustainability’; simultaneously fulfilling financial, environmental and social objectives. But by 2010, we had reached peak environmental legislation. There was disquiet over the outrage of EC and UK law forcing people and companies to have nice clean, plentiful water supplies. DG Environment was told to take into account productivity, which was code for ‘sod the environment!’ In the UK the Environment Agency was decimated, told to stop doing policy and became a nice whipping boy for outraged politicians whose constituents were flooded. And Defra started to suffer death by a thousand cuts. So, we are now in a position where

the EC doesn’t make water policy anymore, the Environment Agency isn’t allowed to make policy anymore, and Defra … well, this is where the sausages come in. On World Water Day when the White House held a US water tech summit and governments, NGOs and companies worldwide were talking about water, there was only one thing to come out of Defra, which was a tweet about how good British sausages are. Now I don’t eat a lot of meat, but I do like artisanal, British sausages as much as the next man; however, I also think that this sums up the current government strategy on water. The only Defra policy on water is that if floods are mentioned in the Daily Mail then a Minister must be seen in wellingtons pledging stuff. However, there is water policy being made in other places: NGOs, Ofwat and HMT. NGOs are now starting to work together and with businesses, like Unilever for example, to develop and implement sustainable water practices. Ofwat is driving a customer and localism agenda which is already

leading to innovation. And HMT has gone back to the 1980s and is sorting out the unfinished bits of privatisation. There will be full competition in the non-domestic market for water starting in Spring next year and the same for domestic by 2020.

“

This means new entrants, innovation and opportunity, but it also means risk, reduced resilience and uncertainty. For the first time since the 1800s, we now have water policy without a strategic framework, combined with light-touch regulation. This could be the water equivalent of the City’s big-bang, or it could be a damp squib. But the key things here are: there will be more opportunity, there will be more risk, and don’t ask what the

For the first time since the 1800s we now have water policy without a strategic framework, combined with light-touch regulation. This could be the water equivalent of the City’s big-bang or it could be a damp squib.

”

policy is. Just write it yourself, set your own frameworks and policies and they will probably be adopted in the absence of anything else. So it’s time to ask, where do you get your water and from whom? Could you get it cheaper elsewhere? Could you buy water services instead of water? How resilient are you to interruptions in supply or your retailer going bankrupt? And who will be your supplier of last resort? Also, could you enter the market

yourself, either as a retailer or as a self-serve customer? Exciting times!

Prof Jacob Tompkins OBE is the Managing Director of Waterwise, an NGO dedicated to promoting the efficient use of water. He has worked on water issues for the past 25 years, focusing mainly on water supply and water efficiency. He has degrees in Civil Engineering and Hydrology from University College London and Imperial College London. He recently chaired a task group looking at the resilience for the UK water sector and is an editor of the scientific journal SmartWater. He has an OBE for services to water and is visiting Professor at Exeter University.

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THE EMA MAG AZINE • ISSUE JULY–AUGUST 2016

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FEATURES by

SIMON PONSFORD

Managing Director at SystemFlip

Online views of Gangnam Style video in a year consumes as much electricity as 67,826 UK homes over the same period

THE EMA MAGAZINE • ISSUE JULY–AUGUST 2016

ideos often go viral with many millions of views, an example is the Gangnam Style video which as of 22nd June 2016 had clocked up an amazing 2.594 billion views. In calculating the energy consumption, there are a lot of assumptions that can lead to a variation in the estimate by a factor of 100, but the reality is that a phenomenal amount of energy is consumed by video clips that are viewed millions of times. The starting point for the calculation is the revelation by Google in 2011 (who own YouTube) that streaming 1 minute of video consumes 0.0002 kWh of energy. You then need to take into account energy consumed in the last leg of the data transmission, which is low for Internet wired devices, and much higher for wireless devices. Another factor is the resolution at which the video was viewed: the higher the resolution, the higher the energy demand; the split of mobile devices, PCs and laptop computers, which have different power profiles; and the length of time 4 minute and 13 second the video was viewed, bearing in mind that many viewers

will not watch the entire clip. My own very conservative estimate is that 3.1 Gigawatt hours (GWh) were consumed, blogger Josh Morgan feels the figure is closer to 4.8 GWh whereas the British Computer Society (BCS) estimate is closer to 312 GWh. To put this into context, in 2010 the average UK home consumed 4,600 kWh a year. If the BCS is right, then this equates to powering 67,826 UK homes for a year. Is this really a good use of our natural resources? Computing has brought us many advantages, but today’s use for social media, messaging, games and video streaming might be considered to be frivolous use of energy. In 2013, The Register reported that ICT now consumes 10 percent of the world’s electricity generation. As an emitter of CO2, this is now greater than the airline industry and is increasing year on year. It is not just consumers driving power demand for compute. Many organisations have a rough idea of the power consumption of their computers within their business, but with the growth of cloud technologies, almost none have any

idea of the total impact when their online backup, hosted CRM and email systems are taken into account. If you ask your cloud provider to give you details of the power consumption and CO2 impact of the services they host for your business, most will have no idea where to start, but we need to start asking these difficult questions to see a change within the industry. This is why the EMA is creating with partners the first energy management courses in IT. There is no requirement to be an IT specialist, but the savings that can be made quite quickly for minimal expenditure are to say the least surprising. Widely recognised as a leading expert in datacentre technologies, green IT, backup and disaster recovery (DR), Simon Ponsford has held senior positions in some of the World’s leading datacentre providers and software companies. He speaks regularly on datacentre technologies, data security and energy efficient computing at industry conferences and leading academic.

A bad day to bury good news The Competition Market Authority (CMA) has concluded its energy market investigation and finally published its report, on the legal deadline of 2 years and on the same morning as the result of the referendum was declared. This could be a way of burying a report without comment, which would be a shame because it contains a number of recommendations on suppliers publishing price data. There is also a steer that Ofgem needs to implement their draft code of practice for Third Party Intermediaries (TPIs), an issue the EMA has campaigned on.

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The report is worth reading, but unless you are really interested the summary would do (at a mere 79 pages or even the decision remedies at 21 pages, the main report is 1,423 pages). The main finding is that there was no collusion over energy price fixing by the big six, and so most of the remedies are aimed at Ofgem or DECC, particularly in the role of making supply companies provide transparent information on pricing and tariffs to customers. One of the areas the report makes no mention of is how prices will be affected by lack of supply, but perhaps this will be the subject of a future report.

It’s a fact! A portable data logger for electricity measurement could be one of the most cost-effective and carbon-efficient purchases you will ever make! Each time you use it, there’s a very good chance it will highlight some inefficiency or energy wastage that you didn’t know about. So - before you invest in any other energy saving technology, invest in the SPC Pro or an SPC Mini from Elcomponent.

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THE EMA MAG AZINE • ISSUE JULY–AUGUST 2016

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TECHNOLOGY by

JOHN GUTHRIE

UK Energy Efficiency Manager at ABB Drives

Energy assessment unlocks savings potential The right combination of variable-speed drive and motor can cut the electricity bill for a pump or fan by up to 60 percent. In just half a day, an energy assessment can give a good estimate of how much energy can actually be saved. ABB’s John Guthrie explains.

THE EMA MAGAZINE • ISSUE JULY–AUGUST 2016

Electric motors are crucial to many commercial buildings and industrial processes. Often, there are hundreds of them in just one building or plant. On average these motors account for 65 percent of any facility’s total electricity consumption, but several measures can be taken to reduce that figure and the total cost of ownership.

“

Motor control methods By far the most effective method of controlling a motor’s speed is through the use of electronic variable-speed drives (VSDs). However, in many instances control is still performed with throttling valves in pump systems or vanes in fan applications, while the demands for rotating machinery are solved by gears or belt drives. Speed control with belt drives, gearboxes and

An energy assessment includes the whole chain, from data collection to follow-up of the return on investment and yet an effective assessment can be made in just half-a-day, using a well-defined process that uses specially developed software.

”

hydraulic couplings all add to the inefficiency of the system and often requires that the motor runs at full speed all of the time. In addition, mechanical drives can be noisy as well as difficult to service, situated as they are between the motor and the driven machinery. These arrangements often seem cost effective at first but they are energy wasting.

Energy assessment One way to lower energy costs is to undertake an energy assessment or appraisal of your installed motor-driven applications, which focuses on variable torque applications, such as centrifugal fans, pumps and compressors. These are applications where the flow of air or fluid has been traditionally regulated with some kind of mechanical device, which results in unnecessary losses. An energy assessment includes the whole chain, from data collection to follow-up of the return on investment and yet an effective assessment can be made in just half a day, using a well-defined process that uses specially developed software.

Simplifying your world without limiting your possibilities.

The ABB industrial drive, ACS880, simplifies your world because it is all-compatible. It is designed to tackle any motor-driven application, in any industry, whatever the power range. The drive can be flexibly connected to different automation networks, and through the use of direct torque control, it precisely controls different motors such as AC induction and permanent magnet. Yet, despite the driveâ&#x20AC;&#x2122;s wide-ranging capability, it is remarkably easy to use and integrate. To learn about ABB industrial drives and the benefits they can offer to you, visit www.abb.co.uk/energy Email: energy@gb.abb.com Tel: 07000 DRIVES (07000 374837)

Energy assessment for motor-driven applications 1. Get a picture of the facility and its applications, including a motor inventory and anything unusual that could affect the assessment

THE EMA MAGAZINE • ISSUE JULY–AUGUST 2016

2. Spot applications that are typically running inefficiently. Check the rating plates on the motors or monitor them to get their actual electricity consumption.

3. Enter all data into the dedicated software and make an analysis based on the results. They include present energy usage, potential savings, pay-back time, CO2 reduction and other key parameters. 4. Prepare an action plan including an executive summary and a detailed engineer’s report. 5. Identify the optimum drives and motors based on the results from the analysis.

6. Track the actual savings against the forecast in the engineer’s report. Monitor the electricity consumption for the applications involved and compare with the specification to spot any deviations.

huge savings. This is particularly so when compared to a motor that is continuously running at full speed. However, it is important to take into account design oversizing, throttling, head and VSD losses, otherwise the existing energy usage and the potential savings will be over-stated.

Variable-speed drive Take this table as an example: Using a VSD to adapt the speed of an electric motor connected to a fan or pump to obtain the required flow can reduce electricity consumption by up to 60 percent. This is because the electric power required is proportional to the cube of the speed. If the speed drops to 80 percent of its full value, the power demand drops to 51 percent (0.83). So, following this theory, if you fit a VSD, then slowing down the centrifugal pump or fan by just 20 percent will save you almost 50 percent power. As many fan and pump systems run at less than full capacity most of the time, a VSD can make

Fixed speed cost

£22,308

Speed reduction

20%

Monthly energy saving

£907.19

Annual energy saving £10,886 From a 20 percent speed reduction and using the full 48.8 percent from the cube law - 0.8^3 = 0.512 – results in a saving of £10,886 saving. But the figures fail to take into account the characteristics of even a generic pump system as well as the losses in the drive. Doing so would at least come up with a conservative energy saving figure of around 35–40 percent, resulting in an annual energy saving of around £6,700.

You have potential savings hidden in your office building

Pumps stand out as offering the single biggest savings opportunity

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Get an Energy Check and find them! Hidden underground and inside buildings, pumps are the unseen energy users. Many of them needlessly waste energy and by replacing these, huge reductions in CO2 and operational costs can be achieved. With an Energy Check you will discover your potential savings. It is free, it is easy and just a phone call away.

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TECHNOLOGY

The power is no longer shown as a curve but as a constant at 100 percent across the top. Remember the graph on the right represents the usage in a throttled system. The graph on the left shows the over-exaggerated savings. The more realistic curve is that in the far right. The proof will come in reality, where, say, swimming pool pumps are turned down by 20 percent but only manage a 38 percent power saving and NOT the predicted 50 percent using the above approach. Yet, using our realistic approach, the savings are exactly within the range of our prediction. The result is that some within the industry are claiming the motor costs you much more to run than it actually does and hence greater potential savings.

THE EMA MAGAZINE • ISSUE JULY–AUGUST 2016

Let’s make no mistake; the savings offered by VSDs are outstanding. There are thousands of examples throughout industry that show compelling energy saving reasons to install VSDs. However, it is important to ensure that real-world figures are being used otherwise the theoretical claims will not stack up in reality.

Regulating the motor speed has the added benefit of easily accommodating production rises without extra investment, as speed increases of 5–20 percent are possible with a VSD. By matching the performance of the motor to the needs of the process, VSDs can give major savings, compared to the wasteful practice of running the motor at full speed against a restriction to modulate output.

Top-five motor applications with energy savings potential These are applications where the existing motor is running at fixed speed, directly off the mains supply: 1. Variable torque applications, such as centrifugal pumps and fans, operating with partial flow, controlled by a damper or throttle value: Energy saving typically up to 70 percent. 2. Same as above but with no flow control, where lower constant speed and partial flow is enough, due to oversizing of the pumps/ fans and motors: Energy saving typically up to 30 to 50 percent. 3. Other standard motor driven applications, such as screw compressors and mixers. Energy saving typically up to 20 percent. 4. Continuously running old motors which are oversized: Energy saving typically up to 8 percent. 5. Continuously running old motors, not oversized but inefficient, due to age, damage or multiple rewinds: Energy saving typically up to 5 percent

Over-dimensioning Nowadays, old, over-dimensioned electric motors are increasingly being replaced by modern energyefficient ones. This follows legislation that is being introduced in many countries, setting minimum efficiency performance standards (MEPS) for electric motors. Users can also do a great deal to ensure they are getting the highest efficiency from their motors. A defined motor management policy needs to be in place. One policy decision should be to select high efficiency motors when purchasing new plant. Users need to specify minimum acceptable efficiency values. A motor management policy helps bring together capital, maintenance and revenue budgets, showing the effect they have on each other when different types of motors are selected. Users benefit from such a policy through reduced energy costs, by upgrading to high efficiency motors at the most cost-effective time. The forward planning inherent in the practice helps reduce downtime and inventory can also be reduced through a fast track delivery agreement.

THE event for everyone responsible for reducing their organisationâ&#x20AC;&#x2122;s energy consumption. EMEX is the energy management show that connects all energy users with hundreds of leading suppliers, policy makers, engineers and experts. This marketplace includes a free to attend conference programme that will help you control energy costs, gain industry insights, source innovations, share knowledge and stay up to date with the latest and upcoming legislative changes. Their focus will be: Energy Management as a Profession, Energy Use in the Built Environment, Meeting Energy Demand, Water and Energy Supply, Technology and Innovation. On behalf of my fellow board members of the Energy Managers Association, Iâ&#x20AC;&#x2122;d like to invite you to be part of EMEX 2016.

Lord Redesdale CEO, Energy Managers Association

It takes 2 minutes to register for FREE at www.emexlondon.com

The Energy Management Exhibition EXCEL, LONDON n 16-17TH NOVEMBER 2016 As well as a great line up of speakers, exhibitors, partners and supporters fellow attendees include:

emexlondon.com

BUYER’S GUIDE

Lighting and Control Lighting This EMA buyer’s guide is designed to give you some basic information and guidance on how to approach Lighting and Lighting Control. The quality of artificial light is a significant influencer on productivity and wellbeing within the workplace. At the same time artificial lighting is also one of the largest consumers of power, and significantly, also one of the areas generating most waste - by being left on when not required.

THE EMA MAGAZINE • ISSUE JULY–AUGUST 2016

This guide is designed to steer you through the process of upgrading your Lighting and Lighting Control, from selecting a suitable Solutions Provider, to the questions

you should ask, both your chosen Solutions Provider, but perhaps more importantly, the internal question surrounding your actual requirements. For impartial sources of information There are many good sources of impartial advice should you consider the refurbishment of your lighting and/or lighting control system. For design expertise, CIBSE have a dedicated lighting division (the Society of Light and Lighting) or alternatively designers can be found through the Institute of Lighting Professionals. The Lighting Industry Association will be able to steer you towards a number of reputable manufacturers to help select a list of lighting suppliers from which you can identify a solutions provider.

Where to start

Available Technology

Other Considerations

Choosing a Solutions Provider

Choosing the right equipment

It’s not just Lighting

Solutions Provider This is a partner that can provide a Turnkey Lighting Solution that could (depending upon your specific needs) include financing, installation and lighting controls.

Fluorescent Do not ignore fluorescent technology; many lamps, such as T5s, can offer significant energy saving benefits without the capital outlay often associated with LED.

Building Integration It is not just lighting that can be achieved through an upgrade. Depending upon solutions selected additional building functions can be incorporated (e.g. HVAC, security, space utilisation etc.).

Audit A reputable solutions provider will work with you in order to complete an audit and establish the area for improvement. Total Cost of Ownership A calculation of the proposed lighting and controls scheme factoring in regulatory compliance.

LED LED lamps and luminaires have developed significantly over recent years and now offer a competitive return on investment and significant maintenance savings. Controls Controls should be a core element of your energy savings measures.

Productivity / Wellbeing The correct lighting can have significant benefits on the productivity of those within a building. Data Advanced control systems can leverage data from sensors to reduce further costs such as maintenance.

Selecting a Solutions Provider – Q & A How do I know if a company is reputable? There are many businesses operating in the lighting and lighting control space. Look for a business that has been trading for many years, is based (or has representation) within the EU and one that carries quality standards (ISO etc.). You can find a choice of supplier on the LIA website and can consult regarding the suitability to your project. Case studies and testimonials are a great way to judge how your partner performs and the strengths that they should show.

Could I procure all the Solution Provider services on an individual basis from multiple suppliers? The short answer is yes, but you need to be aware that this is a more involved process from your side in managing multiple suppliers and timelines. More importantly you may incur compatibility issues between hardware/software supplied by two differing entities. With a Solutions Provider you are dealing with one business, have a warranty from one business and are guaranteed not to have compatibility issues.

What is the difference between a Supplier and a Solutions Provider?

What sort of Warranty do Solutions Providers offer? A reputable provider will be able to cover both product and installation (labour), and more importantly, will have a balance sheet and trading history to support the warranty. Product should be covered for a minimum of five years, the installation for twelve months; look out for maximum operational hours linked to the warranty. Failure rates and product performance information should

A supplier will sell you product(s) that may match your needs sufficiently, but a solutions provider takes more time to understand your requirements and provide a solution to meet them. This often extends beyond just supply and could be, one or all, of Audit, Finance, Product Supply, Installation, Maintenance and Review.

Our team has years of experience designing One of the UK’s and commissioning bespoke products to suit leading independent manufacturers of all clients. energy efficient What we offer industrial, commercial * Upgrade current lighting to LED and retail * Apply lighting controls with no luminaires Antique luminaire additional wiring * Increase the service life of your luminaires * Reduce the costs of new lighting installations

conversion at a tenth of the cost of a new fitting

* Create a truly bespoke solution “Up to 90% Energy Saving with our bespoke solution” “On average our clients save 65% on their energy bills”

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Call Now: 0844 847 5100 BESPOKE LIGHTING SOLUTIONS

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Wirefield Limited Unit 1 Matrix Park, Talbot Road, Segensworth, Fareham, Hampshire PO15 5AP T: 0844 847 5100 F: 0844 847 5101 www.wirefield.co.uk sales@wirefield.co.uk

BUYER’S GUIDE

be readily available, furthermore you can ask for references to confirm any warranty claims.

Will I be able to afford the project that the solutions provider recommends? There are numerous solutions available to match various requirements and budgets, however be wary of low cost products as price can often be offered at the expense of both quality and reliability. A total cost of ownership report should be able to identify the payback period for the installation; read carefully to ensure that the calculations represent your working conditions and only relevant savings are included in the finances. Should your business not have capital available, or does not want to invest into a lighting asset, then many reputable solutions providers will offer finance options designed to be cash flow positive for the user.

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Will the lighting refurbishment disrupt my day-today business? Not necessarily. With advanced preparation, your solutions provider will be engaged to solve your lighting energy issues to allow you to focus on your core business. Consider when the project would be best implemented; do you have shut down periods of annual maintenance or would weekend or night work be more appropriate and suit your business needs? Discuss all of the possible options with your provider. Appropriate scheduling of work, together with clear communication to operatives, can ensure that any disruption is alleviated or minimised.

What service should I expect from a service provider? From your initial brief, the chosen service provider should offer a cradle to grave solution for your business; if your provider does not engage for this brief, you should consider another provider. Starting with a thorough audit of your existing estate, this should include luminaire types and quantities (including failures), burn hours, maintenance schedules, usage patterns, light levels, business needs/demands, and existing control strategies. From this position a

detailed analysis can be conducted to establish the precise requirement for your business and the appropriate lighting and controls design completed. At this stage a before and after total cost of ownership calculation can be made and the anticipated payback period determined; some work should be done to offer options and choices to suit different budgets and paybacks. If required, your provider should offer finance options. A turnkey solution is often desirable to avoid the need to source a reliable installation partner who understands the installation brief and the energy savings strategy involved. Your service provider should have a reliable vetting system to ensure that their partner businesses meet the expectations of their clients - you. Strong project management and a robust reporting system are essential for the success of a seamless installation process.

Will I need a Lighting Consultant for my project? Most refurbishment projects would not require a lighting consultant, as the chosen solutions provider should provide all the functions that a lighting consultant would. However, in certain sectors such as retail, where an understanding of how lighting may interact with products is needed, the use of a consultant may be advisable, together with a broader view of products available.

How to Calculate a Total Cost of Ownership – Q & A What are the elements that are required in a TCO Calculation? There are many elements that can be included in a TCO Calculation and these can broadly be allocated in to two categories: Tangible and Intangible. Tangible are elements that have a measurable saving that can be monetised in a TCO and the Intangible are benefits that are softer, so you may not be able to monetise them but they do still have an impact on your business. Examples of Tangible TCO Entries: Lighting hardware, Control hardware, Installation, Commissioning, Energy Reduction, Maintenance, Carbon Credits, Tax breaks, subsidies, Lifetime, reduced cooling load. Examples of Intangible TCO Entries: Staff Wellbeing,

Increased Productivity, Easy of Reconfiguration, Reduced Cleaning Costs, BMS Integration, CSR, improved EPC/ BREEAM score, reduced risk of project overrun.

Does a Lighting & Lighting Control Upgrade qualify for Enhanced Capital Allowance (ECA)? Providing that the solution meets the energy saving criteria published within the Energy Technology List (ETL), then yes, the costs associated with the upgrade will qualify for Enhanced Capital Allowances. The ETL details the criteria for each type of technology, and lists the products that meet them within each technology category; currently lighting (including White Light Emitting Diode Lighting Units, Lighting Controls and High Efficiency Lighting Units) does not need to be listed, however a letter of confirmation from the manufacturer of compliance to the criteria will be required. Only costs arising as a direct result of the installation of the qualifying equipment may be claimed. Please note: this document does not provide tax advice; we recommend that independent specialist tax advice should be sourced.

Lighting Types – Q & A LED is expensive and will not offer an attractive return on investment! LED (Light Emitting Diode) lighting has been around for many years. Developments in LED, LED driver and associated thermal technologies have significantly impacted the cost to make these products more competitive in today’s market. Whilst LED luminaires are often more expensive than their conventional lamp counterparts, this cost is often offset by energy and maintenance savings enjoyed by their installation. Make sure that you compare LED products and ensure that you are making a like for like comparison.

Everyone is talking about LED, should I only consider this option or are other technologies as efficient? No, the light source should be matched with the application, budget and aesthetic. Many other light sources can offer great energy savings, such as T5 lamps.

Should I look for low hanging fruit? Many areas will offer different total cost of ownership based on existing equipment, burn hours, cost of solution and control; this can result in widely varying payback periods. Consider which areas should be completed first, which would have the greatest impact on your energy consumption, and which should not be considered. Often the opportunity to take savings from one area to pay for another can be made. See an example on the right.

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How does Regulations affect the TCO? With all buildings required to meet Part L of the Building Regulations and, depending upon project type, perhaps BREEAM and BCO recommendations, you need to find a solution that allows full compliance but at the lowest TCO. This is achieved through removing major elements of the Tangible inputs to the TCO — for example, commissioning.

BUYER’S GUIDE

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How do I choose which light source is right for me? Choosing the correct lighting solutions provider should help with this decision. They are experts in their field and will give best advice regarding compatibility of all products. Do not hesitate to ask for a comparison between technologies within the same space and explore the savings relevant to your business.

What happens to my old lighting that is currently installed? Under the WEEE directive, your solutions provider should remove and safely dispose of all redundant materials with certification of the disposal issued upon project completion. Ask your provider for details.

Can I use my existing light fittings and simply fit a more efficient lamp? Sometimes, but you should look carefully at the condition of the luminaires and optical performance of the lamp and luminaire combination before making this decision. Low energy lamp replacements are available on the market and can convert T8 to T5, T8 to LED, T5 to LED, discharge to LED, etc., however a great deal of caution should be taken with regard the compatibility of the lamps. Most warranties will be invalidated should such a conversion be made. Furthermore, often luminaires will need to be rewired to enable the retrofit lamp to operate. Any reworking of a luminaire should be clearly labelled to avoid a potentially hazardous insertion of an incorrect lamp during future maintenance.

Are there issues of compatibility between Lighting and Lighting Control? There can be compatibility issues if two separate systems from two separate suppliers are being used. A solutions provider supplying a fully integrated lighting and lighting control solution will eliminate any compatibility issues. The solutions provider will also issue a warranty covering the integrated lighting and lighting control solution.

How can I be sure that my new lighting will not result in lower light levels? A thorough audit should include light level readings of the existing solution. Request that lighting design calculations are conducted by your solutions provider to ensure that the new low energy products will provide sufficient light to meet both your business and your employees’ expectations.

I’ve heard that LEDs last forever, is this true? No. Many manufacturers have caused this myth by over stating reliability and not offering clarity on how lifetime is measured. First and foremost, LED and the drivers that are used to operate them will not last forever. Unlike most lamps, LEDs degrade gradually over time and do not typically experience the sudden failure that can be seen in other lamps such as fluorescent. Any source lifetime should be stated to a given percentage of output (given as an L value); for example, 50,000 hours to L70 (70% of initial lamp output). Furthermore, the lumen depreciation rate during this time should also be given (given as a B value); for example, 50,000 hours to L70, B50 (only 50% failure). Check to ensure that products are being compared equally before making a choice.

How do I know how much light I need? CIBSE produce a comprehensive lighting guide, also EN12464-1, detailing the recommended lighting for most sectors and applications. Considerations should be made by your provider to ensure that the correct lighting levels, and quality, are met to suit the work function.

Are there any other considerations that I should be aware of? BS5266-1:2011 dictates the minimum emergency lighting requirement that you should legally have under emergency conditions within the workspace. This standard is introduced for the safety and wellbeing of those occupying a building at any time; therefore, naturally, adherence to this is mandatory. The EMA wishes to thank the Felio Sylvania team for their support in producing this guide.

Lord Redesdale CEO, Energy Managers Association

It takes 2 minutes to register for FREE at www.emexlondon.com

The Energy Management Exhibition EXCEL, LONDON n 16-17TH NOVEMBER 2016 As well as a great line up of speakers, exhibitors, partners and supporters fellow attendees include:

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CAREER & TRAINING by

RUSSELL FLEETWOOD

Generation Manager at London Underground

Underground Life of a Generation Manager

nergy management is a broad subject and, when it comes to a job description, can cover a variety of activities. The EMA gathers energy management professionals from across all industries and, in this regular section, will interview energy management professionals about their role. This month, we are shining the spotlight on Russell Fleetwood, the Generation Manager for London Underground.

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How did you become interested in energy management?

Since I entered the power generation industry in April 2000, I was interested in how efficiency improvements could increase both power generation exported through better thermal efficiency of generation plant and also through reducing works power demand by improving power factor of large induction motors and introducing variable speed drives. What does your role at London Underground entail? In my role as Generation Manager,

I am responsible for the operation, maintenance and commercial operation of Greenwich Generating Station which provides the emergency back-up power supply for the London Underground Railway Network. The power station is a strategically important asset and forms part of London Underground’s Railway Safety Case, required for operation of the Railway. A part of my role involves exploring opportunities for commercial generation through Demand Side Response by running the generation plant at peak times to reduce London Undergrounds overall load profile, thus reducing tariff charges and providing coincidental savings to the business, and also to provide a service at times of stress on the national grid network.

What is the most frustrating part of your job? That sometimes projects don’t consider at the design stage the business benefits from using energy saving equipment or technologies capable of providing real time demand reduction benefits. The cost to retrofit in most cases outweighs the financial benefits to the business. To address this issue London Underground has introduced procedures and standards to ensure efficiency, sustainability and cost effective equipment, technology and methodology forms part of the design phase and is a key deliverable at tender and contract award stage of all capital expenditure projects.

What is the most exciting part of your job?

Can you describe your typical day?

Achieving large monetary savings for London Underground through reducing demand at peak times and exploring opportunities in the market for additional commercial generation or energy saving technologies.

Checking plant availability to ensure both the site’s emergency role and commercial commitments for generation can be fulfilled to ensure a safe railway service for the travelling public. Managing the site from a health, safety and environmental compliance perspective

What drives you? I would say the diversity of my role, as I am responsible for the operation and maintenance of the assets, all health, safety and environmental compliance, commercial generation and renewal and upgrade projects, and still being involved in an engineering function, which as a Chartered Engineer (CEng) is important to me to sustain my knowledge and experience. What qualities should a good energy manager possess? Good general understanding and background in equipment and technologies available but also to be commercially astute to actively seek opportunities for reducing energy

usage for the financial benefit of a business. What is your greatest contribution to the energy management sector or your current role? Since taking up my current role 7 years ago, I achieved a 20% increase in commercial generation revenue within the first 2 years. I am also leading the redevelopment of the power station to install up to 6 CHP ready gas engines which will provide up to 13% of London Underground’s power requirements and be capable of providing heating and hot water to residential and commercial premises within the Royal Borough of Greenwich once a heat network has been established. The new gas engines will be highly efficient and contribute towards London Underground targets for reduction of CO2 and efficiency measures to reduce energy usage costs. In addition they will contribute

Where Buyers Meet Sellers You asked. We listened.

to Transport for London targets for decentralised energy and CO2 reduction set by the GLA and London Mayor. Which energy efficient innovation can revolutionise the global economy? That’s a good question! Smart apps in each home linked to domestic appliances, heating, lighting etc to automatically tune down power usage as real time demand dictates..! Just a thought..! What advice would you give to someone looking to craft a generation strategy? Look at the generation market and services available to explore the best commercial opportunities to participate in.

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RenewableUK members can visit the exhibition for free. Business Partnering offers up to 8 targeted 1-2-1 meetings. 3 sponsored theatres within the exhibition halls. Up to 40% reduction on visitor & conference passes (non-members).

THE EMA MAG AZINE • ISSUE JULY–AUGUST 2016

and ensuring renewal and upgrade projects are progressing to time and budget.

#RUKMARKET16 Events.RenewableUK.com

CAREER & TRAINING by

LISA WARD

Freelance Energy Consultant at Lisa Ward Energy

Lisa Ward Reflects on

her Career Path in Energy Management

he Energy Managers Association aims to encourage and enable more professionals to enter the world of energy management and environmental roles. Being an energy manager may not seem like the most obvious career for many. The EMA has taken on a challenge of changing the perception of energy management, by raising the sector’s profile and sharing its members’ — leading energy managers — insights into their career progress and achievements.

“

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As a Chartered Energy Manager, Lisa Ward is committed to improving the efficiency and sustainability of energy use. She has undertaken a variety of roles in this area over 15 years at organisations such as the King’s College London, Chiltern District Council or npower, covering energy auditing, certification and management, most recently in non-domestic buildings.

I believe that Energy Management Systems are the best way for organisations to maximise energy efficiency without missing requirements for ongoing management support and maintenance. Even ESOS has had to bow to its superior potential to bring about energy efficiency improvements.

”

involves improving the efficiency of energy use and the sustainability of its sources”. I can’t remember quite where I got these ideas from and I recall that people asked me with a puzzled expression why I chose to study Environmental Energy Engineering at university. To me it was just obvious that there was a need for Energy Managers.

When did you first hear the term ‘Energy Management’?

How did you progress through the profession to your current role?

The earliest of my records I can find is 2008 when I applied for my first ‘Energy Manager’ role. I don’t remember seeing the term before this but I’m sure it existed.

I started off working on project management for renewables R&D for 2 years, then in energy efficiency reporting and improvements within the domestic sector for 7 years. Then I saw an ‘Energy Manager’ role working with non-domestic buildings and had found my career!

What made you choose energy management as a career? In 1996 (aged 16) I wrote in my school action plan that I hoped to: • become an engineer involved with improving things for the environment”; • see renewable energy sources used more widely and help in making this possible”. In 1998 (aged 18), this was refined in my university application form to, “I intend to pursue a career which

What is your biggest achievement to date? Implementing a BS EN 16001 Energy Management System (the precursor to ISO 50001) at King’s College London which was externally certified by BSI. This was really useful in leveraging the support needed for energy management from across the organisation. I believe that Energy Management Systems are the best way for organisations to maximise energy efficiency without missing requirements for ongoing management

Tate Modern Extension. View from the South at dusk. © Hayes Davidson and Herzog & de Meuron

What is the best approach to attract women into the energy management sector? Initially no different to men; responsibility with appropriate authority and a good wage. Both sexes should be made aware of opportunities whilst still at school. Later in life women may feel the need for flexible working (reduced hours or working hours other than 9–5) more than men – and I believe this can be achieved more widely than is currently the case. However, self-employment can allow women and men to work around family responsibilities even if part-time jobs are hard to find. Of course promoting flexible working to men too will allow families to choose the work–life balance which is best for them; thus employers will get the best out of everyone.

What advice would you give to someone looking to become an energy manager? Go for it! Anyone committed to it will be able to find a connection between what they are doing now and an energy management role. Don’t be afraid to move gradually into it if you were previously in or working towards another type of job. Get some hands on experience, even if you have to volunteer your time for free, working alongside someone with relevant experience.

What qualities should a good energy manager possess? Commitment, enthusiasm and determination. Everything else will follow.

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support and maintenance. Even ESOS has had to bow to its superior potential to bring about energy efficiency improvements.

CAREER & TRAINING

The Perfect Energy Manager. Have we missed anything? Being an energy manager is one of the coolest jobs in the world…. No really, it is. Our members know it, our partners know it, the EMA team knows it. But what knowledge and skills are practitioners of this coolest job in the world required to possess? For some, energy management is the art of applying engineering and technical principles, experience, judgment and common sense to purchasing and reducing energy used. Others go beyond this definition and link energy management to monitoring and comparing energy consumption and applying energy efficient processes and products that benefit their organisation and adjust behavioural practices of people around them. Energy management practitioners also design organisational energy policy, manage important equipment as well as processes for decreasing energy use and implement appropriate auditing systems. As an aside they have to keep in the loop with changing legislation and regulation relevant to their company. The continuous evolution of the energy management sector is based around the flexibility of its practitioners’ skillset.

• Understand how to use operational controls to operate the energy use equipment and systems efficiently, and understand the role of maintenance.

Reflecting on the EMA membership’s core skills and traits, we have put together a profile of an experienced energy manager.

Behavioural Change and Motivation: • Be able to identify changes required to improve energy performance. • Be able to develop structures and strategies for change to improve energy performance. • Be able to monitor and report on progress towards defined energy performance goals.

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What traits do successful energy managers have?

• • • • • •

Highly analytical and detail oriented. Imaginative and creative. Good communication skills. Enjoy working in teams. Enjoy building or improving the way things work. Confidence in mathematics and science.

What knowledge and skills do successful energy managers have? Technical and Operational: • Understand how energy is consumed in different types of buildings and processes. • Understand how energy is used in equipment and systems. • Understand the role of design, installation and commissioning of energy use equipment and systems.

Energy Assessment, Measurement and Verification: • Understand basic metering and how to collect and record data. • Be able to carry out basic checks on bills and other recorded data to verify accuracy and repeatability. • Be able to set targets in line with published guidelines. • Be able to report against targets to a range of stakeholders. • Be able to compare energy assessment methods. • Be able to choose the product and system solutions that reduce energy / carbon.

Regulatory & Legal Compliance and Carbon Management: • Be aware of key EU directives and UK legislation relevant to energy and climate change. • Be aware of economic incentives for energy management. • Be able to quantify the impact of legislation on their organisation. • Be able to anticipate broad changes that might affect long-term organisational plans. • Know where to find current legislation and regulatory information. • Understand factors influencing carbon reduction. • Be able to assess simple carbon footprints. • Be able to factor the cost of carbon into business cases.

Waste Management: • Understand key challenges in waste streams and the appropriate use of waste. • Understand financial advantages and disadvantages of their organisation’s waste stream. • Understand the use of waste as a renewable resource. • Be able to undertake a basic audit of greenhouse gas emissions in their workplace. Procurement: • Understand day-to-day issues such as monitoring and reviewing, the makeup of charges on bills, sources of information, impact of subsidies / taxes and interface with operations. • Understand types of contract and procurement methods • Understand what energy contract and price include or do not. • Be able to carry out simple procurement actions. Transport: • Understand key energy management challenges associated with the transport and logistics sector. • Understand the impact of climate change on the transport sector. • Understand local, regional, national and international energy management initiatives / policies associated with the transport sector. Water: • Understand water use and conservation in their workplace. • Be able to undertake a basic water audit of their workplace. • Be able to identify water using fixtures and fittings in the workplace and suggest water efficient replacements. • Be able to identify water efficiency within processes in their workplace. • Be able to understand the links between water and

energy in their workplace. • Be able to develop behaviour change programmes and communications for water efficiency in their workplace. Information & Communications Technology: • Understand the energy and water usage by ICT in their workplace. • Be able to model different IT infrastructures and estimate power consumption. • Be able to estimate the carbon footprint of their organisation’s ICT infrastructure including offsite services. These ten common energy manager’s skills will vary in strength depending on specialisation and the energy manager’s career goals, but with them you should have a winning formula on how to progress your skills and knowledge development.

2016 DATES FOR THE EMA COURSES TO BECOME AN ENERGY MANAGER OR UP-SKILL AS AN ENERGY MANAGER: 14 September - Understanding and Delivering Behavioural Change Programme 6 October - Procurement 19-21 October - Fundamentals of Energy Management 28 October - Energy Management Strategy 3 November - Energy Assessments, Measurements and Verification For more information, please contact the EMA on 0203 176 2834 or email Jana at jana.skodlova@theema.org.uk

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Energy Management Strategy and Planning: • Understand global energy trends and their impact on business operations. • Determine suitable objectives and targets for improvement. • Develop an action plan around energy, carbon and water. • Understand how success will be measured and verified.

INDUSTRY FOCUS by

SOPHIE LONGMATE

Energy and Carbon Reduction Manager at Walgreen Boots Alliance

Retail:

an interview with Boots

n this regular feature, we will focus on how organisations across different industries approach energy management. In this issue, are exploring the world of retail with Sophie Longmate, Energy and Carbon Reduction Manager at Walgreen Boots Alliance. Boots is the UK’s leading pharmacyled health and beauty retailer with over 2,500 stores in the UK, ranging from local community pharmacies to large destination health and beauty stores. Boots UK is part of the Retail Pharmacy International Division of Walgreen Boots Alliance, Inc, the first global pharmacy-led health and wellbeing enterprise.

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What does energy management mean for Boots UK?

As a responsible business, we know that it’s important to work on a wider scale to help tackle energy issues. We champion change towards a low carbon economy and have an EnergyCare program through which we deliver our energy management and reduction strategy across our business. As part of our EnergyCare program The Energy Arena

we are committed to a 30 percent reduction in our carbon footprint by 2020 (compared to a 2005 baseline). As members of the Prince’s May Day Network, we are part of a network of businesses committed to working collaboratively to tackle climate change, helping to build a sustainable future for our planet. At Boots UK, we have invested in our own energy generation since 1915 when our first Combined Heat and Power (CHP) Plant was constructed at the Island Street site in Nottingham. Fast forward to today and we still follow this same principle through our highly efficient CHP energy centre at our site in Beeston which generates the majority of the energy for our 300 acre Nottingham Support Office, logistics and manufacturing site. Our other sites, stores and warehouses across the UK use 100 percent certified green electricity (excluding landlord supplies). We are strongly committed to energy reduction, however this isn’t about simply investing in the latest technology; it’s about having great insights and information and using this to invest wisely in real solutions that will work for our c.2,500 stores. Since 2009, we have invested over

Business Engagement

£20 million in technology to reduce energy consumption in stores, for example by replacing inefficient lighting with LED (light emitting diode) technology. We’ve also taken learnings from our stores which champion low carbon technology and using the information from the trial technologies installed, we make the best investments through improvements in the heating, ventilation and air conditioning (HVAC) systems and utilise automated building management systems, for example, to increase control of energy consumption. We take energy management and reduction very seriously; it helps to enable the success of our collective business plan and allows us to have a holistic management of energy and carbon. Our integrated energy reduction strategy fits within our overall business objectives. To develop this holistic energy management approach, we consider the principle drivers and influencers that necessitate an integrated strategy. We group them into four main areas of influence:

Innovation & Projects

Utility Management

• Legislation Compliance- new

• Accreditations

• Changing business models

• Rising Energy Costs

policy and regulations

• Stakeholder Engagement

requiring more energy e.g.

• Carbon Reduction

• Changing operations and

• Employee Engagement

refrigeration/food

Commitment liability

services

• MayDay Target 30% by 2020

• Stores consuming energy

• Carbon taxes CCL, EU ETS and

• Security of supply

• Customer expectations

• Retrofit of a large estate, with

others.

aged buildings

• Identification of savings on bills

• Mandatory Carbon Reporting

• Supply chain savings

The Energy Team

What we do

We increase energy awareness, ensure compliance and promote energy efficiency

Account Management

Efficiency Projects Power Generation

Business Engagement

Innovation & Projects

Utility Management

The ‘Energy Arena’

Reporting

Supply Chain Energy Legislation

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Colleague Engagement

Data Management

How does Boots UK deal with energy management? Our energy management approach is to focus on leading the energy and demand reduction strategy. This ensures the mitigation of possible business risks such as instability with the future economic market within the UK and EU, including the current changes within the Department of Energy & Climate Change (DECC) and policy/taxation changes thus allowing us to ensure continuity of supply to our stores and business. Following on from our four main areas of influence (The Energy Arena, Business Engagement, Innovation & Projects and Utility Management) we then centre our activity around three key workstreams focusing on CO2 reduction; these interdependent pillars create a robust and practical approach, to allow us to holistically manage energy and carbon. Pioneer

Engagement

Boots UK will play its part in developing

Engage our people to care about the

a low carbon economy and lead the

environment, giving them the tools and

debate on energy and carbon reduction.

information to make a difference.

Innovation Revolutionising investment strategies and implementation of energy savings opportunities enabling us to use energy more efficiently.

Utility Management These three key workstreams are underpinned by our excellent energy processes, supply chain and data integrity. Our data collection enables our success in pioneering, engaging and innovating our stakeholders, colleagues and stores. This means that we can ensure our operational responsibilities are upheld allowing us to focus on our strategic direction through the three workstreams.

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What challenges does Boots UK face to continuously improve energy management?

Over the many years since the EnergyCare Program launched, we have ensured the delivery of the strategy and the delivery of initiatives to reduce energy. We have had great success with this however we continuously look at further ways we can continue to significantly reduce our consumption. It is vital to ensure: • Continuity of supply which will positively affect store trading and business, avoiding innovation investment stagnation. • Energy reduction is taken control of, keeping up with the energy market and retail sector, rather than being reactive to external factors for a positive future. • Understanding is shared about why we need to reduce energy across all colleagues; therefore having clear

accountabilities, backed up with effective data and reporting. • Energy being a hidden cost within the business, a holistic view on energy management needs to be taken, for example, decisions should be made based on more than the lowest unit cost. Therefore going forward as part of our continuous improvement, we focus on sustained colleague engagement, monitoring of the estate and continued roll out of LED’s whilst establishing further investments into targeted CO2 reduction. This also ensures we align with DECC’s forward focus on demand reduction rather than renewable energy generation. We want to ensure we remain known as the energy experts within retail through our continued EnergyCare program to reduce our energy and carbon emissions whilst ensuring we align with our overall business objectives and our trusted Boots brand.

FINANCE

How to win investment approval from your Board and financial manager

Although a well-designed and effectively delivered energy reduction programme can be translated into benefits for CSR and environmental credentials, it is crucial that it also stands the most rigorous of all analysis which is “does it make commercial sense for the business to invest?” Answering this question is a vital aspect and related to all stakeholders, and more importantly, it allows Board and management teams to see the true financial impacts delivered to the bottom line. Many Energy Managers have completed the process multiple times. However, gaining a financial justification for your project can always be a daunting task. Even if you have confidence in your success, it is worth revisiting the four main areas of focus: energy data, energy taxation, your business case structure, and its delivery to assure that there is no element that you have overlooked whilst preparing your proposal. If this is your first time writing such proposal, then using the framework as a guide, should avoid leaving out information that may be needed. • Focus 1: Energy data – each organisation will have different sources of energy data available and it is important to build these into meaningful reports for all stakeholders. It is also important to consider the processes needed to present this within a financial framework for clarity on potential future investment impacts. • Focus 2: Energy taxation – make sure that you have considered not only the current energy taxation policy, but also any planned changes. For example, what the impact of future taxation landscape changes post 2018 will be for your organisational practices (keep following EMA updates). It is also important to

identify how the elements of commodity and taxes are likely to affect the longer term financial proposition for an energy project. • Focus 3: Building the business case – there are a number of approaches for presenting the financial justification for investment, such as Payback/ROI, Lifecycle cost, Net present value, Return on capital, Indirect cost savings. It is beneficial to identify who you need to engage within your organisation to ensure alignment of intent and support for the project, identify stakeholders with different priorities and avoid potential internal conflicts. Once you have identified all stakeholders you can pilot a project to build credibility to demonstrate the wider benefits. • Focus 4: Delivering the business case – choosing the right reporting structure is essential in showing the derived benefits of the project. One must ensure the benefits are not confused with or masked by other changes within the operations. Correct project management will ensure successful delivery with not only the true savings delivered through the financial processes within the business, but also embedded process in the normal operating parameters of the business. However, your job does not stop here, it is also important to create systems to ensure the sustainability of savings for future periods. It is obvious that the devil is in the detail. If you believe that you can benefit from gaining in-depth knowledge of this topic, consider attending the Accounting for Energy courses scheduled to take place on 28th September or 9th November in London with further courses being run early in 2017. This course is approved by the EMA and delivered by Ignite Energy (www.igniteenergy.co.uk) to assist energy managers who have to win the case with their financial director.

THE EMA MAG AZINE • ISSUE JULY–AUGUST 2016

ow often does it happen to you? As a pro-active energy manager you have spoken with a myriad of potential suppliers, costed out energy reduction projects, decided on the most appropriate technologies to maximise reduction opportunities, calculated the potential financial savings and spent hours or even days writing the proposal – only for it be rejected when you put it forward for approval.

FINANCE

How to turn the cost of energy into widgets?

idgets is a fine generic term for anything a company produces, or is being used in this article as such. The problem for most energy managers is that the core purpose of a company is the production of widgets or, to use a more specific example, a supermarket chain sees their purpose as selling as many groceries as possible. Energy is often seen as a commodity that is needed in the running of a supermarket but otherwise ignored, a number on a balance sheet. So how does the energy manager engage the directors of a board in an issue most show little interest in or understanding of? The answer is really quite simple, instead of using cost of energy or Kilowatt hours which is frankly meaningless to most people; convert the cost into the price of a widget. The widget might be a service, a piece of fruit, a cinema ticket, whatever is the main product of a company that can be unit costed, then divide the energy bill by the widget. This will give you a

clear way of expressing energy against the activity of the company. The board will be aware of the cost associated with a widget and it is a compelling argument to say if you as a company reduced your energy bill by x, you would not have to sell y amount of widgets. A further refinement is to divide the yearly total into a short time scale: a year, a month, a week even a second. Dotted around the page are some examples with the answers at the end. The psychology of this approach works because the board can convert a bill into a metric they really understand. Have a go with your own organisation; the potential savings can always be converted into profit or a reduction of sales projections or even the wages of staff. All these suddenly get quite a lot of interest and could put energy reduction finally at the top of the board’s agenda.

THE EMA MAGAZINE • ISSUE JULY–AUGUST 2016

Questions for the board

As a member or Trustee of a Board you are expected to understand all financial risks. Whilst energy may not be your largest cost, it could be the most variable next year. Here are three simple questions to test your knowledge:

1 How much does your company spend on: Electricity? Gas? Water?

2 What does this cost mean to your company?

To help you, see examples below:

Try the calculation for your business! How much of your product/service would you need to produce in order to pay for your annual energy bill?

3 What should your organisation do about its energy bill?

First hire an energy manager or promote the one you have. Then invest in energy efficiency. It may be the most cost effective use of your money allowing you to grow whilst using less.

The EMA predicts that energy prices will double over the next five years!

What has your board budgeted for energy price increases? Energy costs could have the greatest impact on your company’s bottom line!

THE EMA MAG AZINE • ISSUE JULY–AUGUST 2016

Readers’ Letters

Danny Clark, Technical Energy and Sustainability Manager at JLL wrote:

it being changed to another “downstream tax” is beneficial has to be questioned.

“Well done George” is not a unanimous feeling I have to say that I got when I reached the fourth paragraph of the Politics editorial in the May/June edition of The EMA Magazine, and I started to realise that The Chancellor had pulled off one of the greatest con tricks in history.

CRC has more than anything forced companies to look at their costs in a way that CCL never has. It is visible and comes off balance sheets as a large sum each year. It has encouraged many companies to employ professionals to manage their energy, and developed the skill base in this important area as the UK strives to reduce demand.

THE EMA MAGAZINE • ISSUE JULY–AUGUST 2016

Step back nearly twenty years to the Marshall report “Economic instruments and the business use of energy”. In the 1999 budget, the government accepted the report’s recommendations and introduced a “downstream” Climate Change Levy from 2002. However Marshall’s report noted that a tax that did not distinguish between forms of energy on the basis of environmental impact would not encourage transfer to low carbon fuels, and different rates were applied for gas and electricity. In a sweetener the government announced that £50 million would be recycled to encourage innovation and the Carbon Trust was created. So that was the stick.

To answer the call for a carrot a UK emission trading scheme was introduced in 2002. It was a profitable experience for the voluntary participants, and the government was keen to learn from it when it ended in 2007. And so CRC was created, intended to be fiscally neutral with the receipts being recycled to those achieving the largest annual reductions in emissions. The principle was good but the execution tortuous with economists having more influence than the participants. In the end, it was an unwieldy piece of legislation, but the hope was the carrot would develop in light of experience. Nobody expected the action taken by “George” when the coalition was elected. The almost immediate change to a tax dismissed years of work by many and led to deep disillusionment. To claim that

The change to an invisible tax that is on the suppliers invoice and not the companies’ accounts has, in my view, the potential for many companies to reconsider their requirement for Energy Managers. To make matters worse the original conclusion of the Marshall report that lower emission fuels should carry lower tax levels is to be reversed, reducing the proportionality incentive for clean fuels and renewables. I really believe that effective engagement by users needs some carrots and no more sticks, and so I cannot endorse your view of “well done George”. Oh and the £50 million recycling from CCL has quietly disappeared.

Dear Danny, My ‘The Spring Budget: Well Done George’ article was a slight tongue in cheek but you made an extremely valid point that the charge on CCL must be accompanied by a mandatory reporting mechanism and I would press for this to be part of the company accounts. The size of the bill and the fact that it is a tax will almost certainly make it a lead item of discussion. Yours sincerely, Rupert Redesdale CEO of the EMA

National Grid fires up further interest in DSR

Demand Side Response is an

OPPORTUNITY

Looking for ways to save on energy costs?

• Yoav Zingher from KiWi Power reiterated the A year on from the launch of its Power Responsive Would new revenue streams meet your business objectives? huge potential for DSR, noting that the routes campaign, System Operator National Grid held Unsure how to make your energy strategy work harder? to market are simple. While he felt no product a second annual conference to encourage more Want to explore Demand Side Response opportunities, but unsure how? individually makes an entirely compelling businesses to embrace the opportunities in demand business case, aggregators could he said, side response (DSR). The 2016 Power Responsive Conference andhelp, Exhibition: byour knitting together a more valuable portfolio of • Hear from leading industry Demand Side Response experts • Learn how Demand Side Response is benefitting UK businesses across all sectors products. The event brought together more than 200 • Explore your potential route to market in our exhibition space businesses, energy experts and policy makers to • Partake in the breakout sessions relevant to the questions you need answering with the answers to help you take yourNational energy management • away As the conference closed, Grid to the next step debate the crucial issues around the drive towards a • Come Director Cordi O’Hara concluded that Power more flexible energy system. Join us at the Grand Connaught Rooms, London on June 16th where together we can learn how you can more Power Responsive. Responsive had started tobecome tackle some of the Register at: https://idm360.com/ngprc barriers to DSR participation, including raising With some business customers still confused over Date: June 16th 2016 Venue: Grand Connaught Rooms, 61-65 Great Queen Street, London, WC2B 5DA customer awareness and developing a shared products and potential risk to their business, the commitment to achieve flexibility. conference, called Practical Next Steps for Business Customers, set out to answer those concerns and The campaign now moves into its second year and fire up further participation. will focus on the following: Among the headlines and advice from the day were: Continue to engage customers on opportunities in flexibility markets. • Phil Graham, from the National Infrastructure Commission, outlined the value of a more Support the role of aggregators and third parties flexible system. A fresh focus on demand to increase confidence in the ‘sell’ of flexibility, flexibility, storage and interconnection could and ensure information is produced which gives save consumers £8bn a year, he said. And if the customers and investors confidence. UK could meet 5% of its peak generation needs by demand flexibility, it would be equivalent to Help to progress the evolution of flexibility markets the capacity of a nuclear power station. through short-term improvements and the longer-term changes that need to be made. • Businesses which are already participating, such as Anglian Water Services, told delegates that You can keep in touch with Power Responsive by DSR is not just for large businesses. Anyone with joining its mailing list through reasonable demand and a half-hourly metered site, they said, could benefit. www.powerresponsive.com or its LinkedIn Power Responsive group, or email the team at • National Grid’s Paul Lowbridge repeated the powerresponsive@nationalgrid.com significant opportunities available in DSR, both through the cost savings associated with avoiding peak demand and the revenue that can be generated. CY

CMY

Implementing ISO 50001… ...the easy way

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