Essential guide to carbon and energy management
Green IT was all about reducing the carbon footprint of the datacentre, but now companies are using software to help reduce emissions and energy consumption across the whole company
The concept of green IT - to help reduce the energy consumption of an organisation's IT infrastructure - should be familiar. However, beyond efficient datacentres and power-managed client estates, large companies are now turning to IT to manage energy consumption and report on greenhouse gas (GHG) emissions across the enterprise.
Computerised energy management is nothing new; it's been applied to industrial machinery and building controls for years. But there is also a growing trend for elevating it above the level of individual plant or buildings to provide enterprise-wide consolidated energy and emission reporting and control.
In the same way that consolidated financial management systems provide enterprise-level visibility of subsidiary accounts, so enterprise-scale energy management and emission-accounting software enables organisations to monitor, analyse and reduce energy consumption and emissions across commercial buildings and industrial plants.
GHG accounting packages, from suppliers such as Ecometrica (http://ecometrica.com), seek to establish an emissions-footprint overview of the enterprise, chiefly for reporting purposes in corporate responsibility reports or filings to bodies like the Carbon Disclosure Project (http://bit.ly/Hk0zZ8).
And by providing drill-down on the details, they enable companies to examine the carbon-rich parts of their business and decide how to reduce emissions.
Energy management software aims to make the organisation more energy-efficient by focusing specifically on energy consumption, which doesn't necessarily equate to emissions. The rise of government Feed-in Tariff incentives (http://bit.ly/nfiKqf) and a growing awareness that micro-generation is not just viable but necessary, has made on-site generation (as well as consumption) a prerequisite of any energy-management portfolio.
The business case
The fact that energy management has risen from the responsibility of individual facilities managers to the C-suite is driven largely by economics. Cash is tight, fuel is expensive, and the price of emitting greenhouse gases is only going one way - up - as regulations like the Carbon Reduction Commitment (CRC) Energy Efficiency Scheme (http://bit.ly/reOhoC) impose increasingly heavy levies on energy use.
Furthermore, chief executives who have said grand things about sustainability are under pressure from green lobbyists and the public to fulfil on their promises. And companies are beginning to see sustainability as a competitive tool.
To cut the energy bill, reduce emissions and "be greener", means attending to myriad details in offices, factories, logistics fleets, and so on, which is where emissions accounting and energy management software can help.
"The main drivers for sustainability management software and services depend on who is buying them," says Janet Lin, senior analyst at sustainability research firm Verdantix.
"We see firms motivated by the desire to achieve operational transformation, improve operational efficiency, reduce risk, reduce energy cost, increase brand value, and gain competitive differentiation."
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Essential guide to carbon and energy management
Green IT was all about reducing the carbon footprint of the datacentre, but now companies are using software to help reduce emissions and energy consumption across the whole company
Verdantix identifies cost savings as the number one purchase driver (http://bit.ly/HTDUmT). In its Green Quadrant Energy Management Software report published in December last year, 13 of 15 organisations interviewed indicated that the ability to identify cost savings topped the list of reasons to purchase energy management software.
However, organisations that wish get to grips with the detail of their energy consumption and emissions on an enterprise-wide basis face a diverse range of suppliers. These include: conventional software vendors looking to add new modules to their sprawling enterprise suites; emissions accounting specialists; electrical equipment controls suppliers looking to move upmarket; specialist energy-management software houses looking to scale up; facilities management service providers; and energy and management consultants.
The good news is that, according to Verdantix’ report, the market for energy management has entered a consolidation phase, with IBM, Infor, Schneider Electric and Noesis Energy all having made strategic acquisitions in the sector last year. This should make it easier for corporate buyers to narrow down their choices today.
“The focus is on large-scale energy efficiency savings, enhanced security of supply over the next 10 years and a more accurate data set for energy consumption and greenhouse gas reporting and reductions,” says the report.
Consolidation will run its course and result in three clear leaders dominating a handful of suppliers by 2016, predicts Verdantix.
The top packages will have to provide integration with individual smart meters and equipment and building controls, and take account of on-site energy generation in private smart grids at the detailed end; and integrate with financial reporting and ERP systems at the enterprise level.
At the detailed level the systems will need to be tailored to the building or plant they are measuring and controlling. The software for a paper mill won’t be the same as that for a retail superstore, or will be based on highly customisable modules.
That means buyers will need to have expert knowledge of their premises and plant to ensure the software integrates with equipment and controls and can deliver the energy cost savings promised.
Boosting the bottom line
Meanwhile, companies are using a range of different systems with varying degrees of integration.
The pubic sector has led the way in talking up the issue of sustainability and looking for ways to reduce the carbon footprint of the premises it uses to provide services to citizens.
For example, outsourcing firm Serco Group has chopped 29 per cent of the carbon emissions from the 70 leisure centres it manages on behalf of several local authorities by using Vision Server Energy Management Software from a firm called Legend Club Management Systems, which specialises in the leisure industry. Serco hopes to shave off another five per cent this year.
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“We have achieved annual cost savings well in excess of £1m by monitoring, tracking and benchmarking the way in which our leisure centres function,” says Keith Thomas, managing director of Serco Leisure. “These savings are significant in themselves, but equally it is enabling us to be more environmentally accountable.”
But it’s not just “greener than thou” local authorities that are using energy management in earnest. High-profile companies like Tesco have made bold promises to consumers and shareholders to reduce their environmental overheads too.
For the supermarket, that means tackling a wide range of activities, including stores, refrigeration, distribution, waste, IT, sourcing and compliance. It faced challenges such as collecting data from thousands of buildings and meters, inconsistent data sources and unreliable collection methods.
To overcome these, Tesco uses CA Technologies ecoSoftware (http://bit.ly/Hhhuj2), a centralised system that provides a global carbon database, from which reports can be drawn up to show, for example, electricity, refrigerant, natural gas, business travel and diesel use across all stores.
Data capture is often the downfall of energy management systems in complex environments. Unless the system can capture energy use directly from a meter with, say 30-minute granularity, it often relies on humans to input manual readings. And these humans are often busy production-line or warehouse managers with other duties.
So, Tesco has automated and simplified its previously manual data entry, and data collection is enforced through automated alerts and reminders.
The economic incentive is obvious: the CRC requires the grocer to pay £12 per tCO2e (tonnes of carbon-dioxide equivalent) emitted a year. Verdantix estimated Tesco’s annual carbon footprint at around 4.5 million tCO2e in 2009. Without reduction, that would be a shopping bill approaching £60m.
But an organisation doesn’t have to be the size of Tesco, as green-minded as a local authority, or even under the cosh of swingeing energy-saving regulations to realise a significant benefit from energy management software.
South African motor dealership Combined Motor Holdings (CMH) found it could potentially lop one third off its electricity bill after conducting a pilot using ClearSkys, a web-based application from Australian company Global CarbonSystems, at its three most energy-hungry showrooms (http://bit.ly/qyKOjm).
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Essential guide to carbon and energy management
Green IT was all about reducing the carbon footprint of the datacentre, but now companies are using software to help reduce emissions and energy consumption across the whole company
Currently, the average saving per dealership is £61,200 per annum with power factor correction, behavioural training, automation, occupancy sensors and daylight harvesting installed. In some of the pilot sites, energy consumption has been cut in half.
The results provided a strong business case for adopting energy efficiency investments across all 60 dealer sites.
“We’ve begun a process of measuring electricity consumption at our larger dealerships,” says CMH chief executive, Jebb McIntosh. “We’ve generated reductions through new metering, more efficient lighting, automated timing devices and greater awareness of consumption.
“This year we will extend the energy-monitoring and efficiency programme to all our dealerships. Once we have a baseline established our site directors will be able to report on consumption savings.”
CarbonSystems’ cloud application, Environmental Sustainability Platform (ESP), was adopted by Microsoft in March as its new global standard for managing energy, efficiency and environmental-performance reporting across its 600-plus facilities in 110 countries.
CMH had a strong financial incentive to conduct the pilot. After a series of blackouts six years ago, South Africa’s state-owned power company, Eskom, was handed a mandate from the South African government to double electricity prices over a three-year period in order to finance new power-generating capacity and curb demand.
Britain’s own “energy crunch” was delayed by the onset of the financial crisis in 2007. But it is looming again around 2018, caused by the retirement of ageing nuclear and coal generating plant, the decline of indigenous North Sea oil and gas reserves and governmental dithering over investment in renewable capacity.
The reasons for deploying carbon accounting software often revolve around transparency, corporate responsibility and reputation management.
Green pressure groups frequently leave companies looking flat-footed with independent reports that show products or services are impacting the environment in ways their producers don’t know about – or haven’t owned up to. Thorough emissions reporting takes the sting out of any such shocking revelations.
“People buy our software because they want to know what’s going on, not be told it by a green pressure group,” Ecometrica’s chief executive Richard Tipper told Computing.
The economic reasons for deploying energy management software make this a hard-nosed sector. Return on investment doesn’t hinge on airy intangibles like “productivity”, which is so often the case with other business software. Either it saves cash or it doesn’t.
Given that simplicity, it is surprisingly difficult to extract hard numbers from companies already using some form of energy management systems. There could be at least three reasons for this: one, the systems aren’t yielding the returns hoped for; two, it’s still too difficult to achieve the granularity of reporting to be certain where exactly savings are coming from; or three, the systems are generating more savings than expected and companies don’t want their competitors to find out.
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