SEAI - Creating the right environment for ISO 50001 to thrive - Chad Gilless
Strategic Energy Manager, EnerNOC, Oregon
In my world I am a consultant for a company called ENERNOC. We are a peak
demand management as well as overall energy management, efficiency Management
Company. But I basically have two bosses who ideally don’t compete with each other
– the utilities and the manufacturers and so trying to come up with a solution that
addresses both of their needs is basically my challenge on a day-to-day basis. So on
the utility side I am attempting to develop and present to them a cost effective
energy efficiency resource that’s equivalent in confidence for them as what they use
for generation. And on the other side I am working with my manufacturer
colleagues to make them as competitive as possible. There are a number of other
drivers of course but that’s the main thing in the United States they are trying to be
competitive hopefully to go beyond staying alive but also to grow in their
marketplaces and become a longer term lasting viable company.
Our agenda today, I’ll basically talk about the Northwest energy efficiency
background with the respect to utilities, what that’s all about. There are some many
things in common with what Eric was talking about to pick up on and it was very
good to hear some of what he was talking about. Talk about Northwest strategic
energy management efforts and how we are looking at the ISO 50001 and then
finally we will talk about where we will see strategic energy management headed
and talk about a roadmap exercises that we had a couple of months ago.
So before I start though we do want to say that we have 140 utilities across the 4
Northwestern states and I don’t envy Paul and Amy for having to work across the
entire country where I think we have in excess of 1,000 utilities and in my case I
have to work with 140 who all have very different issues and challenges to deal with
but I definitely have 3 groups that I work with the most and I guess are the leaders,
Energy Trust of Oregon, The Bonneville Power Administration, The Northwest
Power and Conservation Council, and finally the Northwest Energy Efficiency
Alliance called NEEA. And so I have a quick thing to kind of wake you guys up really
fast and I’m going to ask the manufacturers in the room and the people that are a
part of LEAN to not raise your hands because you’ll blow out this thing. You guys
will basically be almost cheating because you will be too good at this. I’m going to
ask everybody else in the room to raise your hands if your organization has an
energy program. So if UNIDO has an energy program, like your own program, if DOE
has one, all these types of things, so raise your hands, keep your hands up please,
I’m going to drop my hands because I don’t have one at my company. So please keep
your hands up because this is a thing to keep you guys a wake and as a contest as I
ask the questions. So next questions, how many of your programs have an energy
goal? Drop your hands if you don’t have a goal, DOE dropped, SEAI dropped, that’s
too bad, NRDC still in. How many know if you hit your last energy goal? Chris
dropped, DOE, NRK is still in, NRDC still in, great. You can drop your hands now.
This is what we are talking about. A lot of this ISO stuff, strategic energy
management, EnMS. In other terms, like in Microsoft they have a term “Eat your
own dog food”, try out their own software on themselves. In our case we are not
eating our own dog food we don’t even have our own energy programs at our own
organizations and we are asking these organizations that we work with to do these
things. Again, if I would have asked a lot of the Irish organizations you would have
kept your hands up the entire time and I would have had to ask some tougher
questions and it wouldn’t have been any fun for the rest of us but thank you so
much.
So lets talk about why the Northwest US Utilities Funds Strategic Energy
Management. Let me first describe why the northwest got into energy efficiency
what you see here is a diagram of the hydro system within the northwest and it’s
kind of hard to show you but basically where it kind of starts is British Columbia by
Vancouver there, Washington, drops down into Oregon, go to the east is Idaho and
just up from Idaho is Montana. So there is the big river systems, you can see the big
number of dams, the hydro projects which really started in the 1930s and 40s but
we are coming before and after that as well. So there is a robust hydro system and
essentially the development of that hydro system and that power system across the
northwest was done like a lot of projects designed across the country and across the
world by engineers who were asked to make power plants. And it got to the point
where we had essentially too many power plants on the books and ready to go. In
the 1970s we had to cancel or shutter 14 coal or nuclear power based plants across
the region at a cost of 7 billion dollars to the region. That is a cost that we are still
paying for in our region to this day. So it was a major, almost I would say, an energy
catastrophe in over planning and so it resulted in 7 billion dollars and it resulted in
the Northwest Power & Conservation Planning Act of 1980 and this essentially
resulted in the creation of a 4 state council, the Northwest Power and Conservation
Council and that group oversees the power planning and conservation and planning
related to that for the region. And so they created a 20-year plan and they revise it
every 5 years. It has all the different generation sources and the most important
thing is that the highest priority resource is energy efficiency. It is a 10% discount; it
is actually equivalent to generation with a 10% discount on top of that. So when
doing the power planning for the region they are looking at okay should we build a
new power plant or new wind or so on and how much energy efficiency should we
count on. And by the way it is the most cost effective thing. We have to buy the most
cost effective thing by law because of the act. So it really mandates that for us and
really has driven us to a great deal of energy efficiency for the past 32 years. And
actually that ranking is influenced California about 9 years ago they introduced
ranking placing efficiency at the top of the stack but it’s been very tremendous for
us. An error that caused some good things.
So why are utilities focusing on strategic energy management. The first thing is we
talked about that power plan. The last power plan was called the 6th plan because
this is every 5 years and this was the 6th one and it came out in 2010. For 5 years it
will be enact until we work on the next one but over the next 20 years we are
counting on all new load growth out of all of that 90% coming out of energy
efficiency. So if people move to the Northwest, if people buy new computers, more
plug load and all those sorts of things, energy needs continue to rise – 90% of that
delta will be met with efficiency. For those of you guys who don’t kind of grasp, it’s a
major thing, as in if we get that wrong there is blackouts and people who run utility
companies don’t’ like blackouts so very serious stuff. And the 10% that’s what heads
up would be made up of like wind and a little bit of solar and stuff like that but no
new nuclear plants coming on board, no new dams and so on definitely not coming
on, so it’s big efficiency overall. I’ll just say this is something that applies across the
board we are looking at the strategic energy management holistic approach, the
increased reliability, persistence, and accounting for the interactivity of the
individual different kinds of equipment efficiencies. So typically when we are
looking at efficiencies we are talking about taking out an incandescent light bulb for
a linear florescent light bulb so counting on that savings we have to be confident in
that amount of savings and know that something is not going to be undone. If
someone is going to leave a light on longer than they should have before, that
behaviour change, so how in this overall organizational approach we think should
we, and we’ve seen, will counter that. So we’ve actually increased the systems and
the measures and increase the reliability of the savings over time. And lastly I’ll say
that this approach is a big opportunity. You’ll see here a diagram that shows the
resource stack in the industrial sector of the northwest for the next 20 years. And
basically if you look in the top middle for instance you get transformers coming
down to pumps. That’s the amount of savings that they expect to see over pumps
types of measures in the region for the next 20 years. If you go to the top left that is
strategic energy management, larger than pumps. It’s a big chunk of energy savings
that we’re counting on and that we think we can deliver on. But it’s a big goal that
we have up against this. Yeah, compressed air, small, fans, and so on, this is big. And
I think to be roughly representative of the potential available across the United
States as well as around the world.
So getting in to the northwest strategic energy management efforts – I’ve been
throwing around this term and I’ll just describe this really quickly. The bottom of
this diagram you have what we would call energy management elements. So kind of
going from just an equipment based solution to actually look at the things that effect
people. And so things like energy performance indicators, employee awareness and
engagement, training and so on but actually when you put these things together at
least at a minimal level you would have what would be called a strategic energy
management approach. MSE would be in that list as an example, management
system for energy. A couple of examples of those types of offerings would be what
NEEA and some other organizations have as well, energy star has one. And I would
say at the top of the food pyramid would be things like ISO 50001 and SEP, examples
of system standards that are kind of at the top. And again there are some other
things there but definitely the mature pathway of the SEP program, the kind of the
pinnacle of the top companies of the world.
So when taking a look at energy management I guess one of the questions people
ask is why are we taking a systematic look at this. I’ve spoken to some companies
and they say, I’m doing projects isn’t that what you are trying to go for here? And
actually I’ll counter that with another topic actually I was talking to a CEO of a metal
manufacturer and I was coming to talk to him about energy management and he
said, Chad 10 years ago I was a plant manager and we have 10 locations in our and I
eventually left that plant and then moved up to executive row and now I’ve most
recently become the CEO. But 10 years ago we were doing all these projects and it
was great and we were saving energy and since then I’ve moved my way on up and
I’m not sure what happened at that facility, the savings have dropped off and they’re
not doing projects and of course I was kind of licking my chops thinking this is
exactly what I want to hear. So I got up to the whiteboard and I drew this diagram.
What we have here on the left is systems, yes and no, and common sense, yes and
no, or no and yes. So this diagram, the former Intel CEO put this together and the
idea being all companies all begin as a start up area. They start up down there and
they want to put systems in place to become a high performing organization. So that
could be anything, more robust human resources in place so that you can keep from
having lawsuits and to make sure you are protecting and developing your
employees. It could be things like have more robust email systems so your emails
are not getting lost because your systems are crashing. Those types of investments
are more strategic and so this is the same type of approach. What we don’t want to
do is kind of veer, going up in to the high performing bureaucracy where you loose
the common sense that you had when you started with. So that is the real art here is
to find that balance. So I drew that diagram for him and it resonated so I said where
do you want to be in 5 years and he said well, and he painted this picture for me and
I said great, and what do you think energy management will look like in 5 years and
of course he didn’t answer and I knew I had a customer.
But the point is how can energy support you in realizing that five/ten year vision.
And if you can answer that kind of question then you are on the right track and if not
you’ve got some opportunities to convince the executives.
So another quick concept I’ll give is that there are really three rings to how energy
should be viewed and so most of the programs we’ve had from the utility side have
been focused on one area only and that’s equipment. So replacing a motor for a
more efficient motor, putting things in equipment, that sort of thing. But there is a
couple of other layers to look at so one would be the interaction between people and
the equipment so having the data, having the right type of data about that
equipment so you can know how to operate it effectively and then lastly would be
the organization level, the people so actually having solutions that address those
folks so those last two rings have definitely been growing areas for utilities as
they’ve been focusing on customer solutions. So I’ll give you a couple of examples,
again I talked about the motors so again that could be a motor solution whether it is
replacing one for another, putting a drive on the motor, it could also be expanding it
out to look at more of a system level so what is the purpose of that motor, what are
you trying to do with that thing? Can you reduce the distance of the line? You change
the start up for that line and instead of 2 hours to start up the entire line you can do
it in 1 and realize a number of benefits including the employee hours going into that
as well as the energy benefits. So things like that. Another equivalent to that would
be if you think about a delivery company like FedEx. They can replace their trucks
with more efficient trucks or they can look at their delivery routes, can they go in
sort of a hub and spoke model and go on a route model. Or can they change how
much those trucks are idling, look at where the stoplights are and not do so much
idling in between. So if we are looking at the data and this is kind of near and dear to
my heart as to what it relates to. John O’Sullivan had an example a couple of days
ago about driving. When I learned to drive in the 80s and this was in Texas so I
drove a suburban and my parents would give me the Texaco credit card so I could
go to the gas station and take my card and pay for my gas. So all I had to do was look
at the odometer, write down the date and how many gallons I put in. I had this
clipboard and I kept it in the glove box of the car and I wrote this down every time.
And gas was cheap back then but yeah you’d do this thing and go through that
process. Every month to twice a year, I’m not sure how often my Dad did it but he’d
go and collect these stack of receipts and the binder sheets and he’d go away into his
spread sheet in the office using quarto pro or some old spread sheet system and
he’d type the stuff in there and of course I’d never hear back about it. I never knew if
I was driving more efficiently or not. He’s the guy that paid the bills and energy
efficiency was important to him at some level but I never heard about it. I’m the
operator of the equipment and I’m not hearing about this stuff at any kind of
frequency to know how I am doing. Compare this to the dashboard of the Prius,
Toyota Prius, wonderful car, not markedly more efficient than the small diesel cars
of the 80s but the dashboard parts are the most ingenious parts of it. It’s the right
amount of data presented at the right frequency for the operator of that car can
drive more efficiently. So with the right maybe incentives for that driver, if you put
the right incentives there for that person you can that vehicle more efficiently but
it’s definitely got all the tools they need. And I think it’s 40 miles to the gallon I think
is what they advertise but people can drive this thing 100 miles to the gallon with
the same car because they are educated on it, there are entire websites dedicated to
how you can do this, they wear socks to use the gas pedal and so on. It’s amazing to
watch them do it.
So lastly I’ll say is Organization. We have the energy teams is what we think about
but having the right incentives, having the education for these people. This is one of
the energy teams that are meeting to discuss energy management programs.
Another example would be the kind of recognition and rewards. This pictures is a
trophy, this is from J.R. Simplot, a French fry manufacturer who spent $150 on this
trophy and it gets past around annually at their plant manager meetings for
recognition in the top energy management performer in their organization. These
plant managers go crazy for this; they are just rabid about competing for this award.
$150 – I don’t even want to think about how much energy improvement is driven, I
do want to know, maybe you guys want to know how many energy managers
they’ve got on staff but it’s something like 8 or 9 energy managers. It’s created jobs
for these guys, not just this I mean they’ve got a number of supports including Doe
and others.
So I’ll go quickly and kind of talk about these SEM organizations. NEEA who is
funded by the Bonneville power administration the utility company of the
Northwest, the basically approve different concepts and plot the different concepts
out. They’ve been working with strategic energy management since about 2005 and
generated about 94gwh of savings. Next is Energy Trust of Oregon, a different type
of group but similar in that it is funded by the utility companies of Oregon. They’ve
worked with about 50 facilities and had about 44gwh of savings. And lastly is
Bonneville Power Administration (BCA) with 26 facilities to date started just a
couple of years ago. They are going through an evaluation right now so they should
be coming out with some new numbers coming out but their first year they did
7gwh but I assume they would be on track with Energy Trust soon. So pretty
amazing results. One of the things that we’ve put in there are called Cohorts where
they come together as a group something I think we’ve done in the SEP pilots and
maybe in some other areas. And basically when they sign on they have to commit to
two people be part of these groups they assign an executive sponsor who commits
to their goal and they have to sign that agreement. They go thorough a 20 to 24
month training with technical support. All of this supplied at no cost through
incentive types of support from the facilities. The training is going to be on a lot of
things like goal setting. A lot of the concepts between ISO and strategic energy
management. The support is more technical so helping them on some of the
concepts like baselines and so on, helping them go through the other materials over
the 1 to 2 years. And the make up of the organizations are typically non-competitive
so not having competitors in the room although we have seen that work in some
cases where they are far more open than we thought but we usually have to get
some type of mutual agreement before we begin ahead of time.
So some of the findings, definitely cohorts take some time to establish trust. The first
few meetings have been quite quiet as the people, it takes a while for the
organizations to trust each other and open up but it’s definitely something that
works over time. I would say peer pressure has been quite powerful. We make these
organizations present out in front of each other at these meetings on how they are
doing, what their challenges are, how they plan to address these things, just the act
of getting ready for that, making sure that they are doing their homework in
between and it actually gets them better at presenting that information and when I
talk about how great SEAI is I love these posters because they really do require you
to articulate this information in a very concrete way. We do have the participants
from the cohorts host these meetings just to vary it up and to have people
understand different ways of looking at how these facilities approach energy
management. We do recommend influential management representative are the
best way to be effective. Interestingly enough, again, I think it was Simplot that was
saying the best energy managers haven’t’ been engineers, they’ve been accountants
curiously enough, but they are the ones that can most easily navigate the
organization and get things done. That’s what they’ve identified. But the point is you
can get a management representative from all over. And when selecting
organizations we prefer the team oriented learning culture types of group. And
lastly we’ve seen some savings in the area from 2.3 to 8% energy intensity reduction
at the facilities between these different programs.
So I will move quickly and I’m up against the time. A few of the new areas that we
are working on is trying to maintain the efforts that the organizations are doing so
we are having sort of cohort reunion groups with like breakfasts and so on. Not
foreign to the folks in Ireland but definitely something that we are trying to replicate
in the Northwest. These are there certainly not only there to reinforce the savings
but also to make sure the savings are lasting for us and that they are definitely
reliable over time. NEEA is working on creating additional SEM providers trying to
increase the capabilities in training of consultants that can go out there and work
with these customers. They are also creating some web-based tools for the SMEs. I
know its something we talked about earlier. We are trying to find some tools, maybe
not for the ISO standards but even below that, trying to find tools to address the
minimum levels to have a threshold of a system that can really drive savings over
time. Energy Trust has had some similar focus. They are really taking that cohort
and going to the next level of having even less touch and less effort required by the
organizations are small and can’t dedicate a lot of resources. They’ve also been
tooling around with the ISO standards as well and we’ve got a couple of customers
who will be working on implementing that and I hope that again will be reinforced
with the savings and the management approach that we’ve seen working with them
and Bonneville is also doing some pilots as well.
The main benefits – lets say there are four. The utilities are thinking about ISO, one
is that it drives more savings itself, two that it actually supports more SEM
engagement and these first things are trying to increase the numbers. Secondly it
would make the savings from the traditional measures or from the strategic energy
management more persistent so having that management system in place, having
the ISO certification locks in those savings over time and lastly would make those
SEM engagements more robust. So if you think of SEM locking in equipment ISO
kind of builds upon that and locks in SEM. It increases the kind of value across the
board. And lastly we had a couple of pilots going on and I will give some credit to the
Canadians even though BC Hydro and Ontario are not in our territory but I look up
to a lot of work those guys are doing and actually we are working on some of the
pilots in the area with BC Hydro.
And lastly, I want to move quickly, we had a little workshop a couple of weeks ago.
We invited a number of folks, we had people from the DOE, Georgia Tech as well as a
number of people around the region who basically tried to define what strategic
energy management will look like in 20 years and so we had a couple of pillars and
then some pre work to get to that point. And we took post it notes and got up on a
board and said okay across these different market areas what are theses areas going
to look like and we ended up with a lot of post it notes. One example on the bottom
right is that universities will begin to offer a strategic energy management MBA and
I think that is not too different to what is being offered in Ireland for the energy
management masters degree. That is something we would love to see in our neck of
the woods. And then from that kind of future vision we developed a few strategies.
One was to truly make a more robust offering for the SMEs, the second was to
standardize our protocol and say okay what is the playing field of protocols you
could work within. And so for instance SEP is a very solid protocol, where would
that fit within that, can we have lighter or heavier, can we have different
configurations for different kind of purposes above and beyond as an example 15
minutes date versus monthly or can we go less frequent, that type of data. And so
having that type of data understood we can then have solutions for energy
information systems like we talked about before, dashboards, things that really
reinforce that type of behaviour change and then lastly to take that information and
educate the regulators of our different states so that they can more readily adopt
SEM and a lot of their programs.
So in conclusion, utility supported efficiency can be very powerful. I recommend it if
you are in the policy influencing area of your country and it can be a great deliverer
of savings for the utilities that’s cost effective as well as being a solution that drives
competitiveness for your customers. SEM within the utility approach can be a very
effective efficiency effort. And lastly if your programs and your efforts are not at
least aware of ISO and have those kind of thought of in your programs then they
should at least be doing that. Ideally they’d be doing a lot more integrating of them
and even requiring them as a part of the program. If you do need any other
information I do have a few folks here I’ll go ahead and skip on to my last slide,
which is some of the contact information for some of the organizations. The top
right being from the council. Tom Eckman is a leader in the area so if you are
interested in program design and utility programs he would be a good resource for
you. Jennifer and Kim run some excellent SEM programs and finally John Wallner is
the person who led that roadmap workshop. So thank you so much for your time.