Step 2.6 Identify and prioritize energy opportunities
This step is relevant to section 4.4.3 c) of the ISO 50001-2011 standard.
Opportunities for energy performance improvement are a key component of the energy review and a critical input to energy planning. Energy opportunities are identified by examining current practice and determining how it can be improved.
The process of identifying opportunities can bring to light the potential for improved operating practices, equipment and system improvements and advanced technologies that would benefit your organization. Typical benefits from implementing energy performance improvement opportunities include:
Reduced energy consumption,
Lowered emissions,
Decreased operating costs, and
Improved operating efficiency.
Identifying energy opportunities is one reliable approach for you to achieve continual improvement in energy performance. Opportunities are prioritized in accordance with your organization's criteria for the most effective use of resources to improve energy performance.
How to do it
There are many ways to identify opportunities and your organization may already have a list of ideas or projects that you have considered or are considering for improving energy performance. If not, you need to develop a process for identifying and prioritizing opportunities so you can address them in a timely and systematic fashion. There are three tasks associated with this Step:
Identification of energy opportunities is your management representative’s responsibility with support from the energy team. However, consider soliciting input from all employees and external resources as appropriate.
One common method for identifying opportunities is an energy assessment. Energy assessments are an excellent method for collecting data for all components of the energy review (see Step 2.2.3) and provide a vital source of information for energy management planning, including identification of energy improvement opportunities. Assessments yield a “snapshot” of your organization’s current energy performance and offer a list of quantified improvement measures. The types of opportunities identified depend on the scope and intent of the assessment, but they may address energy purchasing improvements, better operating and maintenance practices, and renovation or replacement of existing energy equipment. Elements of an energy assessment include:
Determining the scope of an assessment including buildings, systems, and utility metering
Reviewing any past energy efficiency projects to help focus the scope of the assessment
Reviewing past assessments and determining additional or updated information requirements
Developing the energy assessment plan based on the identified scope
Conducting the assessment
Recording the findings of the assessment(s)
The management representative is responsible for scheduling an energy assessment. Assessments can be conducted by the management representative and/or energy team members, corporate energy specialists, external energy consultants, utility personnel, and university experts. Management allocates the necessary resources to perform energy assessments.
There are many resources available to assist with performing an energy assessment. The U.S. Department of Energy’s Advanced Manufacturing Office (DOE AMO) offers the Plant Energy Profiler (PEP) tool as one simple method to generate a basic plant energy assessment. PEP identifies how energy is being purchased and consumed and also potential energy and cost savings. A plant profile can typically be completed in about an hour. When a case is completed, PEP provides a customized, printable report that shows the details of energy purchases, how energy is consumed, potential cost and energy savings, and a list of next steps to start saving energy.
The DOE AMO also provides a variety of resources for identifying energy savings opportunities in specific energy systems, including advanced system assessment tools that allow a more detailed analysis of specific systems. System analysis tools are available for:
The American Society of Mechanical Engineers (ASME) System Assessment Standards also provide guidance on energy system assessments. Guidance is available on facilities and specific energy systems related to both industrial and commercial organizations. Information on these standards is available at this link.
Energy assessments are very effective but can be expensive. In addition, timing or resources can be an issue. However, there are other approaches to defining energy performance improvement opportunities. Other personnel, either internal or external to the organization, that are not involved in any formal energy assessment often have valuable insights that can yield opportunities not discovered during an energy assessment. Standards and other information resources are also available for identifying opportunities. Other sources of opportunities for improving energy performance can include:
Employee suggestions
Utility representatives
Service technicians
Commercial building standards
Industrial sector standards
Equipment standards
Government organizations
Equipment vendors
Personnel working for or on behalf of your organization are generally useful in defining energy opportunities not discovered during an energy assessment. These personnel may be closely associated with energy equipment or processes and may uncover unique opportunities because of their experience. Using this type of asset offers the potential to discover unconventional improvements and engage personnel who otherwise may not be actively involved in energy management.
The Checklist of Other Methods to Identify Energy Opportunities can be helpful in finding and using other methods to identify energy opportunities. The Checklist identifies several different methods for identifying opportunities, as well as suggested contact points and possible outcomes of applying the method.
Opportunities for energy performance improvement identified by methods other than energy assessments must be prioritized and recorded just as those found by an assessment.
2.6.2 Establish and apply criteria for prioritizing opportunities
The next step in energy management planning is to prioritize the energy opportunities identified in Step 2.6.1. The method for prioritizing is up to the organization; however, it must be systematic and implemented on an ongoing basis. It can be difficult and time-consuming for your organization to process every potential improvement idea. Prioritizing ideas based on defined criteria helps you focus resources on the most practical opportunities.
The following activities will help you develop and apply criteria for prioritizing energy opportunities.
Get the right people together – Involve individuals from different functions and levels within your organization in developing the criteria for prioritizing your organization’s energy opportunities. Different points of view will ensure consideration of a wide range of potential factors. If the energy team already has adequate representation from across the various functions and levels, then no additions to the team may be needed. On the other hand, this can be a time to involve other personnel who may bring specific knowledge or experience useful to the process of setting the criteria for prioritizing energy opportunities. This could include, for example, personnel knowledgeable about your organization’s capital planning or project justification processes.
Review relevant organizational information – The energy team should gather and review organizational information that may impact the criteria and/or the approach to be used in prioritizing energy opportunities. Relevant organizational information could include:
Organizational business strategies
Current hurdles or financial requirements for proposed capital projects
Operations and maintenance (O&M) projects
Other types of resource or funding requests
Production or market forecasts
Corporate requirements
In addition, it may be helpful for the energy team to be aware of any existing risk assessment processes already in use by your organization, as well as a having clear understanding of your organization’s safety and environmental risk tolerance. For example:
Many organizations use Failure Modes and Effects Analysis (FMEA) to evaluate a variety of risks. Reviewing information about current risk assessment processes helps the energy team understand how these requirements and processes may need to be considered in decisions on the criteria to be used for prioritizing energy opportunities.
Determine criteria – After relevant organizational information has been reviewed, the energy team can begin selecting criteria for prioritizing the energy opportunities. When selecting criteria, consider the organizational information you collected and develop criteria that will address your organization’s needs and requirements. Examples of criteria include:
Estimated energy or cost savings
Cost of opportunity implementation
Return on investment, internal rate of return, net present value, life cycle cost
Ease of opportunity implementation
Length of implementation period
Possible safety, health, and environmental issues
Maintenance impact
Production or operational impact
You determine the type and number of criteria to be used. One or two criteria may be sufficient or many criteria may be required. You also determine whether scoring or rating scales for each criterion will be established and applied (e.g. a range of energy savings that are acceptable). If only one criterion is to be used, a simple go/no go limit may be adequate. Multiple criteria typically require a process for determining the relative importance of each criteria and how they will be evaluated (see the next activity).
Remember to document the criteria that will be used to prioritize the energy opportunities. This ensures the criteria are clearly understood and uniformly applied. The Prioritizing Energy Opportunities Examples and Worksheets file can give you some ideas on how criteria can be documented.
Develop tools or techniques for applying criteria –You now have developed criteria for prioritizing opportunities. This ensures that your organization’s resources are focused on the most viable set of potential energy projects. Developing tools or techniques to apply the criteria can make the process of prioritization easier.
If your organization already has tools to prioritize potential projects, it may make sense to use (or adapt) those same tools for prioritizing energy opportunities. If there are no existing tools, then the Prioritizing Energy Opportunities Examples and Worksheets file may be a good starting point. Within this file, the table titled “Criteria and Ratings for Prioritizing Energy Opportunities” is available under the Blank Worksheet tab. It can be used to prioritize your opportunities using criteria and ratings selected by your organization. Under the Example Worksheet tab of that spreadsheet is a completed example of that table that shows how a rating scale can be established for each criterion. Use the Example Worksheet as a guide for completing a Blank Worksheet to obtain opportunity scores for prioritizing your organization’s opportunities.
Typically, the criteria used to evaluate projects will have different levels of importance. If the criteria are not equally important, then the energy team should determine the relative weighting. As an example:
Within your organization, estimated cost savings may be more important than the ease of implementing the opportunity. In this case, cost savings might be weighted twice as heavily as the ease of implementation criteria.
In the Prioritizing Energy Opportunities Examples and Worksheets file, the Blank Worksheet (Weighted) tab provides the table titled “Example Criteria and Ratings for Prioritizing Energy Opportunities (Weighted)”. This table illustrates one approach to defining and using weighted criteria. The Example Worksheet (Weighted) tab provides a completed example that illustrates how the table can be used to define criteria and weightings for prioritizing energy opportunities in your organization.
Apply criteria to prioritize opportunities –In the previous two activities you developed criteria for prioritizing energy opportunities and incorporated them into tools you have developed, or chosen, to uniformly apply the prioritization criteria to the energy opportunities. Examples of how criteria and ratings can be applied are available under both the Example Worksheet tab and the Example Worksheet (Weighted) tab in the Prioritizing Energy Opportunities Examples and Worksheets file. (Under those tabs, see “Example Worksheet for Prioritizing Energy Opportunities.”) Note that in both examples, the opportunity scores are calculated for each opportunity and compared to determine the priorities. In these examples, the scoring is such that higher numbers will indicate higher priority.
Re-order the list of energy opportunities from highest-to-lowest priority. Use a “reality check” to evaluate the prioritized list. Make sure the list makes sense from perspectives that may not be directly reflected by the criteria and that the opportunities seem to fall in line with the organization’s expectations. If one or more of the opportunities appear to not make sense, it may be necessary to re-evaluate the criteria or the weightings used for the criteria. Some questions to consider:
Does the prioritized list make sense with regard to your organization’s overall business objectives and plans?
Are there criteria that have not been considered that have skewed the prioritization?
Do the weights reflect your organization’s priorities?
Are there any planned organizational or other changes that will impact the prioritized list?
As new energy opportunities are identified, ensure they are prioritized and included in the list.
2.6.3 Update at defined intervals
Like the other components of the energy review, the prioritized energy performance improvement opportunities must be updated at defined intervals and in response to major changes in your organization’s facilities, equipment, systems or processes. Establish a regular program for reviewing and updating the prioritized list of energy opportunities. Typically, as top priorities are addressed, lower priority opportunities are moved up the list leaving space for new opportunities. Consider leveraging your organization’s suggestion/comment process (see Step 3.4.3) and change management processes to identify energy opportunities on a continual basis. This provides an ongoing pool of opportunities that can then be evaluated and prioritized as part of a regular program to review and update this component of the energy review.
Resources & Examples
These U.S. Department of Energy and ASME resources can help you identify and evaluate energy performance improvement opportunities:
These resources provide information and approaches that can help your energy team develop processes to identify, evaluate and prioritize energy opportunities:
