unlocking - supply professional › wp-content › uploads › 2016 › ...over two hours,...

UNLOCKING ENERGY’S VALUEGetting the most from an energy program

Powered by

PBB02_roundtable.indd 1 15-04-15 10:26 AM

Welcoming message

The Bottom Line on Conservation

In many respects, Ontario’s businesses have led the way in creating a culture of conservation in the province. Companies, both large and small and across all sectors, are investing in energy saving and seeing the results in their bottom line. In 2014 alone, business conservation efforts through the IESO’s

saveONenergy programs resulted in almost 600 GWh of energy savings.

The business case for conservation is pretty clear — it cuts costs. But conservation also delivers broader benefits for all Ontarians — reducing the need to build new infrastructure and lowering the wholesale price of electricity. We are helping to make our province more competitive for business while also contrib-uting to a cleaner environment.

That’s why the province has moved to a new framework that puts conservation first before all other supply options. This opens up myriad opportunities for businesses that are able to shift or reduce their demand for electricity. Through the IESO’s saveONenergy programs, there are numerous opportunities for businesses to reduce their overhead costs through retrofits, energy audits, lighting and equipment upgrades and participating in demand response.

This success, however, is only possible by business, industry, associations and public agencies working together to use their collective strengths to increase our conservation and business competitiveness.

We need this collaboration to continue. Over the past four years, we have seen businesses step up their conservation efforts – not only to capture cost savings but also capture the strategic value that conservation can offer their organizations.

Now we need to push further. The province has set new conservation targets — ones that are more ambitious than in previous years. Our research shows that there remain more than enough opportunities for us to work with businesses to achieve these results. We need to develop more comprehensive solutions — including embedding sound energy management practices within the very core of business decisions.

This publication aims to further this conversation. There are many dedicated individuals with great ideas about how to enhance our province’s conservation capability — you will learn their stories here.

To find out what conservation can do for your business, visit saveonenergy.ca/getstarted.

Terry YoungVice-President, Conservation and Corporate Relations

Independent Electricity System Operator

PBB02_roundtable.indd 2 15-04-13 4:15 PM

Powered by IESO / PurchasingB2B Thought Leadership Report / April 2015 / 3

Shedding Light On Energy Efficiency There’s more to long-term strategy than meets the eyeBy Jacob Stoller

The procurement of products and services con-nected with energy conservation is a complex and often baffling subject. For starters, the

field is highly technical, replete with buzzwords, new technologies, and a plethora of regulations and certi-fication criteria. Fluctuation of energy costs and changing government policies have made forecasting tricky at best. Finally, the soft benefits of sustainabil-ity, such as improved brand image, are difficult to as-sess and quantify.

This complexity can often leave decision makers with a list of unanswered questions. Should we retro-fit our lighting, HVAC and other equipment? Should we invest in solar collectors? What kind of expertise should we hire? Which numbers really matter? And finally, where do we start?

To get a better understanding of these questions PurchasingB2B and the Ontario Independent Elec-tricity System Operator (IESO), assembled a round-table on March 5 on the subject “Unlocking the Value of Energy Efficiency”. At the table were seven ener-gy conservation “heavy hitters” who advise utili-ties, municipalities, and businesses on their long-term planning. Their knowledge spans diverse areas such as engineering, energy partnerships, regula-tions, and the subtleties of creating a conservation-minded organization.

The seven panel members were: Mike Lithgow, P.Eng., manager, corporate energy services at the Regional Municipality of York; Tom Wynn, business development manager at GreenSaver, which advises utilities on conservation and demand management (CDM) strategies; David Piotto, P. Eng., technical sales representative, industrial air division at Atlas Copco; Brian Smith, chief conservation officer at Horizon Utilities; Alex Bogun, P. Eng., energy manag-er, Region of Peel; Bala Gnanam, director of sustainability and building tech-nologies, BOMA Toronto, a non-profit organization supporting best practices in commercial real estate; and Janis Hodgson, C.E.T., acting energy services supervisor, Hydro One, Brampton, energy services department

Over two hours, PurchasingB2B editor Michael Power peppered the ex-perts with questions about technology, incentive programs, management is-sues, and what all this means for procurement. In this special report, we’ve

Energy Efficiency

Energy Insights

IESO recently commisioned a survey on energy efficiency across multiple market sectors. The survey explores whether companies have done an energy efficiency audit and their efforts to increase energy efficiency. Among other findings, the survey found that:

the number of respondents that reported their company having conducted an energy audit in the past five years.38%

4 / April 2015 / PurchasingB2B Thought Leadership Report / Powered by IESO

“Energy efficiency is not just scientific facts but it’s also an idea. Making it into something that is emotionally resonant with people is the real key to adoption.” —Tom Wynn

condensed the proceedings into seven key guidelines that you can take back to your of-fice and use immediately.

Start with the low hang-ing fruit.When it comes to setting out in a new direction, nothing gets executive buy-in like a few quick wins. In energy conservation, there are plen-ty of opportunities to take a

visible step forward and deliver a convincing short-term financial return.

Janis Hodgson: If a business is just starting out [with conservation], they should go after the low-hanging fruit—the lowest cost, lowest investment items that have a bigger payback. And the place we always sug-gest for any business to start looking at is their me-tered data, whether that’s daily or hourly, and deter-mining their base load—the minimum requirements for running their facility.

Brian Smith: I think it’s typical of most of our cus-tomers to look at lighting as the entry point. And that really introduces an opportunity to go out and meet with the customer and do a facility walk-through to start identifying more opportunities.

David Piotto: I know in a compressor system alone, they can typically save 30–50 percent. And com-pressed air systems in manufacturing facilities are typically up to 30 percent of their total energy con-sumption. So those opportunities are huge.

Use incentive programs to get things rolling….Governments across Ontario and Canada have a num-ber of programs to encourage companies to replace their lighting, retrofit their equipment, and improve the energy efficiency of their buildings. There are also programs that support wind power and other forms of renewable energy generation by guarantee-ing a price for energy that is fed back into the grid. Our panellists referred to the programs that are available in Ontario. However, many similar pro-grams exist across the country.

David Piotto: I think the biggest [incentive program] in Ontario is the IESO saveONenergy Program. They have retrofits and planned upgrades to all their dif-ferent uses.

Tom Wynn: [Projects that take advantage of incen-tives] will comprise the lion’s share of conservation. I think about 60 to 70 percent, at least in terms of the new framework, will continue to be through the pro-

Powerful Help: Incentives to flip the switch on energy efficiency projects

There are several reasons to focus on upgrading systems for energy

efficiency, from reduced operating costs, increased sales, improved em-

ployee comfort and productivity, to name but a few. Luckily, myriad in-

centives, rebates, and resources exist to ensure businesses can take

advantage of these opportunities while improving competitiveness.

In Ontario, funding is available through the saveONenergy program for:

Energy Audits and Engineering Studies

These processes are often the first steps for a business to improve en-

ergy efficiency. They’re used to identify opportunities for improvements

and provide business cases in several areas, including to: find energy

savings by project; identify non-energy improvements by project includ-

ing productivity, safety, yield, sales and others; identify the capital cost

of projects; and summarize the ROI for projects and prioritize them

based on capital cost, lifecycle cost savings and non-energy financial

benefits. The SaveONenergy program covers up to 50 percent of energy

audits. Once opportunities are identified, more detailed engineering

studies can define requirements and provide accuracy on potential sav-

ings and costs. For engineering studies, 100 percent is covered.

Retrofit Funding

SaveONenergy provides funding once a business is ready to upgrade to

high efficiency systems for lighting; HVAC systems; pumps; motors; fans

and other equipment. Companies can get up to 50 percent.

Funding for Energy Managers

Energy manager resources may be available free through the Roving

Energy Manager Program from local utilities. Incentives for to 80 per

cent of the salary for a full-time energy manager may also be available.

Energy Management Training

Rebates are available for up to half the cost of hiring an certified energy

manager, commissioning agent, and measurement/verification training.

Find out more at saveONenergy.ca/business or get your local electric

utility to contact you at saveONenergy.ca/get-started.



“People only want to look at something with a one- or two-year payback, which limits it to lighting. But they don’t look at the entire lifecycle costs of their energy use.” —Brian Smith

“Conservation is becoming more important. But I think it’s a philosophy that we have to instill in the people. They have to push this philosophy and continuous improvement.” —David Piotto

vincial-wide programs. But there’s also going to be a huge opportunity for innovation funding as well.

Alex Bogun: Sometimes [the program] actually decides, am I going for that project? 50 percent will be funded by the IESO, otherwise I would not implement it—simple as that. It’s the same with the lighting. And I’m sure you know that there is a lighting for small business program and, yes, they will help you and fund your retrofit to LED lighting, which otherwise probably won’t happen.

Mike Lithgow: The Feed-In Tariff program with the Province guarantees a fixed rate for any electricity that you may generate from a renewable source for 20 years. And the level of the rate is designed to provide a certain return on investment. This started out quite high, but as equipment and contract costs have been going down over the last few years, we’re now looking at a 10-year payback for solar electric panels in some cases. For renewable energy, this is unprecedented.

…but quickly broaden the scope to develop a long-term plan.Once the “no-brainer” projects have been completed and the results are on the board, the going gets tougher. Gains require more work and expense, and the wins won’t come as quickly. This is where the policy makers have to bear down.

Brian Smith: Quite often people only want to look at something with a one- or two-year payback, which limits it to lighting. But they don’t look at the entire lifecycle costs of their energy use over a longer period of time. And they don’t often factor in the increase in energy costs. So once we gain their trust by identify-ing the quick hits, we introduce them to other solu-tions and cost options, whether it be equipment re-placement or changes they can do operationally.

Bala Gnanam: What we ad-vocate to our members in the sector in general is, take more of a holistic and sys-tematic approach for energy efficiency. The knee-jerk re-action is to go after lighting, but those low-hanging fruits tend to grow back if you don’t have a proper continuous im-provement strategy in place.

Gather your facts…Energy conservation is a fact-based undertaking, and gathering the right in-formation requires technical expertise. A number of organizations provide basic energy audits and the more advanced re-commissioning exercises.

Bala Gnanam: If you want to have a plan, start with a proper audit. That sets out what needs to be done beyond the low hanging fruit, and it also points out ways to combine projects so your total payback will be quicker. An audit to me is kind of going through the building to see what needs to be done. A re-commissioning exercise is a little bit broader, and usually related to the HVAC system and the envelope side. It involves a little bit more investment but you also capture a significant savings. So it’s includ-ing an enhanced energy audit and then re-commissioning as part of the to-do list.

Mike Lithgow: I’d say lifecycle costing is key. It’s looking at the life cycle of your equipment, your process, your facility, and even if everything is work-ing fine, look at it again. There’s new technology, there’s new techniques. Ap-ply that sort of time value of money and to minimize that over time because money—that’s what pays the bills. And once you’ve got that then the other fantastic stuff will come, especially the environmental and the sustainability aspects.

Brian Smith: It can be quite simply being at a facility at night and seeing their shutdown procedures. Do they have documented shutdown proce-dures? And if they do, are they following them? And for interval metered cus-tomers, or customers that you have access to their data, you may not even have to be there at night. You just have to look at their low profile to see what’s on it during those off operating hours.


6 / April 2015 / PurchasingB2B Thought Leadership Report / Powered by IESO

“I’m sure you know that there is a lighting for small business program and, yes, they will help you and fund your retrofit to LED lighting.” —Alex Bogun

“The place we always suggest any business to start looking at is their metered data, whether daily or hourly, and determining their base load.” —Janice Hodgson

…but read between the lines.Energy conservation in a business is a multi-faceted af-fair that requires constant learning. There’s a tendency to over-simplify, and not see the forest for the trees.

Tom Wynn: To us on the front lines talking to people who have no concept of what a kilo-watt hour is, energy efficiency

is not just scientific facts but it’s also an idea. Making it into something that is emotionally resonant with peo-ple is the real key to adoption as something that every-one strives for. In my experience, sustainability—the idea of being green because it feels good—is really an adjunct to what should be a best practice to run your business. And that is the main selling point. Sustain-ability is a concept that you sell on top of the economic argument, which should be there and is increasingly easy to make with the passing of every year.

Bala Gnanam: In the context of buildings, we see ener-gy efficiency as an intersection of three main areas. You have your highly efficient technologies. Then you have people, and that includes both informed occupants and well-trained operators. Then the third part would be best management practices. So the whole emphasis be-comes how do you run buildings on a day-to-day basis in terms of technology, people, and best practices?

Alex Bogun: I would add the environment to those three aspects. It’s not just to save money or energy itself. It is a lot about the environment and the green-house gas emissions.

Tom Wynn: Once you begin to go through the pro-cess of looking at your scheduling and then looking at your building operations, it’s common for existing building operators of that facility to perceive that as a

threat. Because in the mind-set of a building operator who’s been operating build-ing for 10 or 15 years, they might actually have a disin-centive to push this process forward because if it turns out that the building is being managed inefficiently, it weighs very negatively upon their job performance. So maybe finding a way to even incentivize building owners for reaching their conserva-tion targets internally is a way to get them on board.

In what areas of your operations do you track energy consumption?Lighting

Vehicles/fleetsMachinery-high load motors/equipment

CompressorsWater/wastewater

Chillers/air conditioningVentilation/fans

Machinery-low load motors/equipmentIT/serversPlug loads

Grinding/blastingMineral processing

No areasOther

49%32%

30%27%

26%24%

21%21%

21%

12%7%

9%

5%2%

Do you have an energy manager on staff at your company?

NoNo but planning to hire oneDon’t Know/NAYes

78%

55%

8%13%

1%

Support from the topthe number of respondents to ieso’s energy efficiency survey who agree that senior leadership is doing all it can to enable energy efficiency



“ If you want to have a plan, start with a proper audit. That sets out what needs to be done beyond the low hanging fruit, and it also points out ways to combine projects.” —Bala Gnanam

Invest in your people. Building a sustainable organi-zation requires more than com-pliance—there has to be a level of vigilance that involves each and every employee. This takes time, and a significant invest-ment in people. Yet, that culture change unlocks one of the most powerful benefits around sus-tainability: the improvements in engagement and productivi-ty that come with creating a community around common purpose.

Bala Gnanam: If you look at the incentive programs, they’re very equipment replacement-centric. But how much money is available for market transformation and employee engagement? Very little, comparative-ly. So people say, “Normally I would turn things off, but now I don’t care because I’ve got LED lighting, and I’m green.” And then gradually, all the money you’ve invested in your greening the building degrades over time. So, what we say is “yes, get the green building—put in all the energy efficiency features using the in-centive program. But invest in people and training so that you continue to drive savings.”

Brian Smith: I guess you could say that all our cus-tomers should strive to be LEED standard or ISO 50001 compliant. But if you looked at it from just the people perspective, to be energy efficient you really have to be open enough and, I guess, aggressive enough to go after things that are achievable in the way of efficiency and solutions, but modest enough to be open to continuous improvement, to be open to new technologies, new solutions, and also be open enough to learn from others.

Prepare for a project with no termination date.Mike Lithgow: This is a continuous process. There’s always new opportunity, due to new people and new technology. Business pro-cesses can always be tweaked to work better, more efficiently. And our en-ergy rates are increasing. So, whereas something wasn’t economic a couple of years ago, it is now. An example that keeps coming up is lighting. Over my 25 years in the industry, there’s been opportunity for many rounds of retrofits and each one is economic and each one is better than the last one. And most recently, the

LED lighting, that’s sort of reducing energy used by 75 percent from where we were just two years ago. And opportunity like that will keep coming up.

David Piotto: I think conservation is becoming increasingly more impor-tant. But I think it’s a philosophy that we have to instil in the people. They have to push this philosophy and push this continuous improvement too, with conservation towards everything they do in terms of their process or where their energy usage is. I think it’s going to take quite a bit of time, but I think there’s a lot of untapped potential that we still have to target.

Tom Wynn: You have to keep going because it’s incremental. Too many orga-nizations commit to a big program that looks fantastic, but then nothing gets done beyond that point, and then it just goes away. Behaviour change is dogged persistence. It’s little by little. Companies haven’t found a way to in-corporate the administrative costs of doing this. So, as soon as companies start to understand the sustained operational costs of implementing behav-iour change, that’s when you’re going to start to see people getting more in-volved because there will be the push behind it.

ConclusionNobody at the table said the process would be easy. Technology and stan-dards are evolving, prices are fluctuating, and the soft aspects of conserva-tion are becoming more ingrained in people’s thinking. With no permanent answers to even the most basic questions, the sustainability journey will be characterized by constant learning.

Sustainability is a contact sport that cannot be played from behind a com-puter screen. To be part of the process, procurement will have to partner with all the players—engineering, facilities, HR, and marketing—who are stakeholders in the organizations conservation journey. And if you’ve ar-

rived late at the party, don’t worry—this one will be going on for a long time. B2B

“Lifecycle costing is key. It’s looking at the lifecycle of your equipment, your process, your facility—and even if everything is working fine, look at it again.” —Michael Lithgow


When he reduced costs by 13% with a new RTU, he wasn’t just saving money. He was setting a precedent.Once your clients start seeing the benefits of

our incentives for upgrading to high efficiency

RTUs, they will want to look into making other

parts of their building like ventilation, chiller and

building automation systems more efficient too.

When they do, they’ll be joining thousands of

organizations across Ontario who are already

enjoying the savings that our programs deliver.

Take a look at their stories and our incentives at saveonenergy.ca/business

Subject to additional terms and conditions found at saveonenergy.ca. Subject to change without notice.OMOfficial Mark of the Independent Electricity System Operator.


unlocking - supply professional › wp-content › uploads › 2016 › ...over two hours,...

Documents