Guest Column: Selling an Energy Project to Management
From the July/August 2000 issue of Energy Matters
By Steve Bolles
We have all been there. We attend training workshops or read an article on reducing energy use and get some great ideas to install variable speed drives, improve equipment controls, adjust processes to reduce peak demand, or maybe reduce fan speeds or temperatures during the evening hours.
You take the initiative and do some data collection, savings calculations, and obtain cost estimates from equipment vendors or contractors. You figure you have a winner at a 2-year simple payback and you will get a round of applause at the next management meeting. What happens next is typical at many facilities.
After your presentation, the operations manager indicates that the proposed new energy-saving equipment will burden his group with the need to learn new technology and could affect system reliability. The maintenance manager adds that he heard that a similar project has caused all sorts of problems at the facility down the road and was a maintenance nightmare. Another manager points out that they may change the process in the future and would rather wait until this issue gets resolved before proceeding. He also mentions that this project is not in the capital budget this year.
What went wrong?
Developing a successful energy project begins with laying the groundwork to support the project. Ideally, it starts with a facility reward program that has a system for pursuing cost-savings projects and compensating employees for their efforts. However, most of the time the effort is accomplished by a motivated individual who takes pride in his job and is inspired by what other facilities have done. To overcome the obstacles that are often encountered, the following "pre-presentation tasks" are recommended to increase your success rate.
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Get support from a key member of management before pursuing energy projects.
The most successful facility energy evaluations and projects begin with a commitment from management that reducing energy is something they are serious about and are willing to invest time and resources in. Without management's commitment, great energy-saving projects may sit on the shelf for years. It may seem obvious that some of these projects should be pursued immediately, but without support or recognition from management, the extra work and added responsibility may not be worth it to some individuals.
Support from management should also include defining an acceptable cost/benefit ratio and identifying sources to fund the project. Ultimately, financial parameters to evaluate larger projects using a life cycle cost analysis should also be included.
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Include input from key department staff personnel before presenting to management.
Discussing projects with key maintenance or operations staff provides insight into issues that can be resolved early by modifying the project to accommodate concerns or to include features that will help solve their existing problems. Use case studies to show staff how similar projects were successfully implemented and to help them reach the comfort level needed to accept new technology, or even better, to enthusiastically support the project.
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Begin with simple projects to increase your chance of success.
Having several small "low-tech" projects that show measurable savings builds management's confidence in cost-saving projects. One of their greatest fears is having "egg on their face" after approving an expensive energy-saving project that does not deliver the projected savings. This is especially important when considering new technologies. Facilities that have started with small energy-saving projects that have measurable results have found themselves in the enviable position of getting fast approval for future cost-saving projects.
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Bring in outside support to validate your recommendation.
On several occasions when I have been asked to do an energy analysis at a facility, the operator has described to me exactly what needs to be done to reduce energy use, and provided the data needed to calculate the savings and costs. It is clear that the operator only needed me to validate the idea or fill in a few missing details to sell the project to management. Technical or financial assistance often is available through electric utility programs or equipment suppliers. Be sure to contact the local utility to determine what potential financial incentives are available to improve your project's cost effectiveness. DOE BestPractices software such as MotorMaster+ and Pump System Assessment Tool (PSAT) can also provide support for savings calculations.
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Plan for the unexpected.
Project savings are often scrutinized more than the estimated cost during the initial project development. However, for a successful project, the cost effectiveness depends on both figures equally. The old adage that a project will take "twice as long and cost twice as much" can apply when a project includes new technology, sophisticated controls, or will be interfaced with existing equipment. Cost estimates for potential projects should include the method of project delivery (in-house project implementation, design-build, design-bid-build, or even design-build-operate), hard numbers from equipment suppliers, engineering, and time for meetings, start-up, and troubleshooting. A 20% contingency on top of firm numbers may be appropriate for some projects.
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Present your project.
Projects can be presented as stand-alone efforts or as part of a comprehensive energy project with multiple recommendations developed from a facility energy study. Ultimately, each project should be presented in a 1- to 2-page project profile called an energy conservation measure (ECM). Projects can also be identified as operational measures (OM) when minimal investment is required, or energy supply measures (ESM) when cogeneration or rate schedule changes are pursued. The project profile typically includes a brief description of the project, implementation steps, and a project cost and savings summary. It is also important to include or make available more in-depth calculations, equipment cut sheets, and cost spreadsheets.
These steps represent a sample of what you can do to increase your success rate to move an energy project forward. Additional data collection, financial analysis, development of a performance contract request for proposal, and savings monitoring and verification may also be needed to fully develop a project.
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