what are the steps to adopt energy management systems?

What are the steps to adopt Energy Management Systems?

Energy Management Systems – ISO 50001

Energy Efficiency in Emerging Economies (E4) Training Week

International Energy Agency (IEA)

8-12 June 2015, Paris

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Content

1. Why Energy Management Systems (EnMS)?

2. Globally recognized voluntary standard

3. Supportive policy mechanisms for implementation:

• target-setting agreements (incl. reporting requirements)

• tax policies

• training and technical assistance

• recognition programs

• capacity-building for EnMS implementation

• conformity assessment professionals

4. Voluntary or mandatory?

5. Lessons from UNIDO Programme

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Barriers to implement EE in industry

• Policies? There are no mandatory rules or regulations to adopt EE or reduce GHG emissions

• Market conditions? The prices of fuels and electricity are low; no CO2 market; or no market recognition

• Lack of information? Enterprises do not recognize the need where and how the spend energy

• Technical? Enterprise are unable to monitor their energy use or/to modify their processes

INSERT THE TITLE OF YOUR PRESENTATION HERE

1. Why Energy Management Systems (EnMS)?

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Quiz 1 – About Energy Management Systems

Question 1 Why should enterprises adopt EnMS ?

a) To improve their energy efficiency

b) To reduce costs

c) To increase productivity

d) Systematically manage their energy use

Question 2 What should be improved by adopting an EnMS ?

a) Fuel usage

b) Electricity usage

c) Energy performance

d) Energy intensity

Question 3 The ISO 50001 is a?

a) Structured approach to the management of energy use

b) Voluntary global management system standard

c) Guide to improve energy performance

d) Technical regulation

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b) To reduce costs




a) Fuel usage



d) Energy intensity



b) Guide to improve energy performance

c) Voluntary global management system standard


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BENEFITS of Energy Efficiency

Organization’s financial savings

Increasing of reliability of operations

Positive effect on productivity and competitiveness

Attractive financial and economic returns

Reducing the exposure to rising energy prices

Increasing of security of supply

Reducing the impact on the environment

Why it is not happening?

then

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BARRIERS to Energy Efficiency

Management focus on production, not on EE

Lack of information and understanding of financial and qualitative benefits

Lack of adequate technical skills for identifying, developing and implementing EE measures and projects

Poor monitoring systems and data

First costs more important than recurring costs disconnection between capital and operating budgets

When EE knowledge exists it very often resides with individuals rather than with the company/ organization sustainability risk

Financing

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EnMS Goals

“It is all about Improving Energy Performance!”

ISO 50001 DEFINITION

3.12

energy performance

measurable results related to energy efficiency (3.8), energy use (3.18) and energy consumption (3.7)

Source: ISO 50001: 2011

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Ad-hoc Energy Management Approach EnMS Goals

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EnMS Goals Senior management

commit to EnMS

0 3 Years

Investment

-20%

-25%

-15%

-10%

-5%

0

+5%

Costs Initial savings

sustained

Housekeeping first – then investment

EE becomes

company culture

Systematic Approach

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What EnMS can achieve

70

75

80

85

90

95

100

105

2003 2004 2005 2006 2007 2008

Energy Use (2003 Base Year)

2-3% saving per year 5% saving per year

EnMS Certification

Source: Liam McLaughlin, UNIDO Expert

Investment restrictions

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Management focus

Systematic activity

Actively managing energy use and costs, reducing exposure to rising energy costs

Obligation to train and raise awareness

Obligation to provide resources

Document savings for internal and external use (e.g. emission credits, legal reporting requirements)

Reduce GHG emissions without negative effect on operations

Continuity through changes of personnel

Energy and Cost Savings

Environmental Benefits

Continual Improvement

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• Most industrial enterprises that have implemented EnMS achieved average annual energy intensity reductions of 2-3% against 1% reduction of business as usual (IRL, NET, DEN, SWE, USA)

• For companies new to energy management, savings during the first 2 years are 10-20%

• UNIDO experience: Average organization-wide energy savings in first 1-2 years range from 5% to 15%, with little or no capital investments


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2. A globally recognized voluntary standard

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EnMS Standards and ISO 50001 – Why? Policy best practice to effectively promote and implement

sustainable EE in industry

Demonstrated market-driven tools to disseminate BAT and BAP and support their implementation

Increased focus on demand for standards & regulations as tools in the fight against Climate Change (services, trade, negotiations, etc.)

Underpinning and catalyzing development or strengthening of policy and regulatory frameworks (i.e. ISO 14001 experience)

Boosting of IEE market transformation and acceleration of the adoption of EE technologies and services

Harmonization across countries

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EnMS Standards and ISO 50001 – Background

National EnMS standards (as of 2009) – Denmark, Sweden, Ireland, USA, South Korea, Thailand, South Africa, China

• National EnMS specifications or laws (as of 2009) – Australia, Canada, Germany, The Netherlands, United Kingdom, Japan

• Regional EnMS standards – EN 16001 – European Energy Management Standard – 1 July 2009

• International EnMS standards – International Standard ISO 50001 – Energy Management Systems –

Requirements with guidance for use – 15 June 2011

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EnMS Standards and ISO 50001 – Background

• March 2007 - UNIDO Meeting on EnMS in Industry Recommendation to ISO Secretariat to consider developing an International EnMS Standard

• ISO 50001 developed by ISO Project Committee 242 – Energy Management, established in Feb 2008

– Membership as of March 2014

• 49 countries full members

• 12 countries as observers

• 11 organizations-in-liaison, incl. UNIDO

• ISO 50001 developed in less than 3 years (record time!)

• ISO TC 242 – Energy Management

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Definitions

Energy Management System (EnMS) Systematic and structured approach to the

management of energy use

Energy Management System Standard Standardised approach to implementing an EnMS

An organization may decide to base its EnMS on a standard e.g. ISO 50001:2011 (This is best practice)

Certification of EnMS An organization may decide to have its EnMS

certified to a standard (to demonstrate its best practice to customers, clients and suppliers OR fulfil a legal or other requirement) Source: UNIDO EnMS Programme

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Quality Infrastructure 1.01

Source: UNIDO EnMS Programme

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conformity assessment embraces the activities which determine whether standards, regulations,

specifications or other requirements are met

Source: Reinhard Peglau - Federal Environment Agency Germany - May 2014

ISO 50001 Global Certifications as of May 2014

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7,345

Source: Reinhard Peglau - Federal Environment Agency Germany - May 2014 7,344

Regional distribution of ISO 50001 Certifications as of May 2014

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0%

8%

0%

3%

39%

47%

1% 1% 0% 1% 0% Africa

Asia

Central America

Eastern Europe

European Union

Germany

Middle East

North America

Oceania

South America

ISO 50001 – from pilot to wide dissemination

ISO 50001 will succeed in delivering the expected impact and benefits to organizations and countries only if it is implemented properly and widely, if :

• Technically sound and effective implementation of EnMS/ISO 50001 depends on the availability of qualified experts/ professionals to assist organizations and enterprises

• Key success indicators will be: the ability to demonstrate to organizations and to the market the

tangible benefits of implementing EnMS/ISO50001

the level of policy support granted and/or regulation attached to the implementation EnMS/ISO50001

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b) To reduce costs




a) Fuel usage



d) Energy intensity



b) Voluntary global management system standard

c) Guide to improve energy performance


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3. Supportive policy mechanisms for implementation

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Quiz 2 – Policies

Question 3 The best way to ensure that enterprises have adopted ENMS is…

a) Certification of ISO 50001 by accredited Certification Bodies

b) Robust adoption of ISO 50001

c) Third party verification of improved E performance

d) Ad-hoc management system

Question 4 Certification of ISO 50001 is to

a) Assess conformity against all of the requisites of the standard

b)Providing a certificate against a management system implementation

c) Get international recognition on management practices

d)Verification process for achieving energy savings

Question 5 An EnMS support policy is successful if

a) determine tangible benefits ($, KWh)

b) Achieves outputs set in its M&E framework

c) Has wide sectorial adoption

d) Industries adopt MRV at the facility level

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Target-setting A. Mandatory:

Where adoption is made mandatory within the goal of achieving a certain energy intensity target

B. Voluntary or negotiated agreements: used by governments as a mechanism for promoting IEE

Challenges Sectorial targets are divided across facilities Need for robust mechanisms for target setting, MRV, Government enforcement and control agencies have capacities Need for institutional capacities from industries (associations,

chambers, federations) to negotiate and operate

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Tax policies and incentives • Exemptions to enterprise taxes:

On fuel or electricity use

On carbon taxes

Rebates on VAT of efficient industrial equipment or monitoring systems for environmental and/or energy control

Reduced income tax

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Challenges Can be perceived as a subsidy Enterprises ability to use the instruments

Training and technical assistance

• Government led or government funded programs to strengthen technical skills in the industrial sector

• Subsidizing technical consultants who may assist the implementation of EnMS

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Challenges Encouraging industry to participate Can be perceived as a subsidy Enterprises ability to use the instruments Availability of qualified staff Creation of qualification mechanisms for technical experts

Enterprise Recognition Programs

• Market based policy >> to achieve recognition there has to be a tangible benefit obtained by the recognized enterprises

• Third party verification >> to provide industrial facilities and companies with a transparent system for verifying improvements in energy performance and management practices, which may involve or not ISO certification

• Can be supported by cost-shared training and technical assistance for facilities seeking

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Challenges Enterprises ability to use the instruments Market value

Capacity-building for EnMS implementation

• There is a need to have responsible agencies and competent staff across all aspects of an EnMS promotion policy, whether there is mandatory enforcement or control or just promotion of EnMS

• Need for inter-institutional coordination

• How to equip government agencies with mandatory roles?

• How to strengthen agencies with support roles?

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Challenges Need for dedicated teams or agencies? Enterprises ability to use the instruments

Capacity-Building for conformity assessment professionals

• If enterprises will certify the ISO 50001 standard, then the Quality Infrastructure needs to strengthened, particularly the ability of Certification Bodies to assess conformity, starting by Auditors

• There are three main features of certification bodies that are addressed relative to conformity assessment, competency, consistency, and impartiality

• Need for an internationally recognized

accreditation process at country level

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Challenges Ensuring that energy performance improvements are achieved

Quiz 2 – Policies

Question 3 The best way to ensure that enterprises have adopted ENMS is…

a) Certification of ISO 50001 by accredited Certification Bodies

b) Robust adoption of ISO 50001

c) Third party verification of improved E performance

d) Ad-hoc management system

Question 4 Certification of ISO 50001 is to

a) Assess conformity against all of the requisites of the standard

b) Providing a certificate against a management system implementation

c) Get international recognition on management practices

d) Verification process for achieving energy savings

Question 5 An EnMS support policy is successful if

a) determine tangible benefits ($, KWh)

b) Achieves outputs set in its M&E framework

c) Has wide sectorial adoption

d) Industries adopt MRV at the facility level

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4. Voluntary or mandatory?

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The importance of a Programmatic Context

Before ISO 50001, in countries with national EnMS standards:

– EnMS standards were typically voluntary

– Part of larger programs targeted primarily to large industrial plants and energy consumers

– Technical assistance was available (training & expert services)

– Offer financial incentives for compliance, usually as part of a target-setting agreement

– Case studies used to publicize benefits

– Public recognition was provided for outstanding performers

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The importance of a Programmatic Context

Denmark Vol Yes Yes Yes Yes Yes Yes Yes Lim 60%

Ireland Vol Yes Yes No Yes Yes Yes Yes Yes 25%

Sweden Vol Yes Yes Yes Yes Yes No Yes No 50%

United States Vol No Yes No Yes No Yes No Yes <5%

Japan ^ Man No Yes Yes Yes No Yes Yes Yes 90%

Source: Adapted from A. McKane for UNIDO

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The importance of a Programmatic Context After the release of ISO 50001:

– Clear increase of EnMS policies, programs and best-practices, either consolidated or introduced voluntary approach still predominant

But

– There is wide variability of context between OECD and different developing regions/economic groups

– Past and existing EnMS (and standards) policy and program best-practices were/are in countries with mature industrial EE policy frameworks and implementation

– In most, if not all, best-practice cases, industry associations and/or regional/local institutions have played an important role

– Non-OECD countries face significant challenges in terms of knowledge gaps, lack of understanding, governance, human & financial constraints resources for effectively promote and support EnMS and ISO 50001

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Monitoring and Evaluation

• Challenge with all policies adopted is to determine how they contribute towards meeting national targets >> how to monitor and evaluate the policies that are adopted

• When planning an EE policy package, whether it has quantitative targets or not, proper planning and budgeting for monitoring mechanisms

• Establish baseline conditions and a methodology to evaluate the impact of the adopted policy or programs

• If targets are quantitative, how to reconcile enterprise level MRV with sectorial targets 41


5. Lessons from UNIDO Program

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Quiz 3 – Stakeholders

Question 7 Who are the key stakeholders to consider when analyzing the EnMS adoption?

a) Regulator

b) Certification bodies

c) Technical experts

d) Industries

Question 8 Which is the key govt. challenge to adopt mandatory targets?

a) Establishing metrics

b) Drafting regulations

c) Controlling and enforcing industries

d) Collecting and analysis data

Question 9 What does it mean to be a certified energy manager?

a) Having completed an EnMS course

b) Completing an accredited certification process

c) Having a lot of EnMS experience

d) Graduating as an energy engineer

Question 10 What is the purpose of monitoring, reporting and verification of energy use?

a) Assessing sectorial energy consumption (govt.)

b) Complying with regulation (enterprise)

c) “Check” step in the Deming's cycle

d) Controlling energy performance

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10 key ideas – Quiz Answers

Stakeholder capacities

7) Who are the stakeholders? >> engagement of different government bodies

and enterprises is key to promote action

8) What are the existing capacities of different stakeholders? >> barriers analysis show that for enterprises technical barriers are key

9) Personnel certification >> the notion of trust for competent workforces

10) MRV at the enterprise level and ME of the policy program >> being able to track performance is necessary for adoption and validate budget spent to achieve energy savings

UNIDO Program on Energy Efficiency

Planned activities

Operational

South Africa Moldova Russia Turkey Ecuador Malaysia Thailand Viet Nam India

Philippines Egypt Indonesia Iran Ukraine Colombia Macedonia Myanmar

Operational in 17 countries

Planned activities in 10 countries

Other donors Swiss State Secretariat for Economic Affairs

UK Department for International Development

Government of South Africa

Government of Italy

As of June 2015

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2008

2012 2014

Decision-makers reached

Enterprises trained on EnMS

Consultants trained on EnMS

Enterprises with EnMS

250 +

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200 +

600 +

390 +

1500 +

2,600 +

190 +

Operational in 12 countries (as of June 2014)

UNIDO Program on Energy Management System

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ISO 50001 EnMS – UNIDO Experience WHAT HAS WORKED?

1. Securing and focusing on initial national champions

2. Building the enough national consultants EnMS expertise and skills to ensure successful implementation (long-term coaching and support)

3. Being prescriptive and providing good guidance – but also be flexible and adaptive

4. Providing substantial EnMS expert support to companies – to keep on track and monitoring change and progress

5. Advocating with top management the need for staff training and competency development

6. Rewarding change of practices and performances

7. Identifying the right drivers or catalyst for change

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ISO 50001 EnMS – UNIDO Experience

LESSON LEARNT

1. Top management engagement is necessary for EnMS & EE implementation … but it is not always sufficient (personal and social norms can interfere)

2. Cultural context is an important factor in transferring knowledge and embracing change

3. Cultural context can vary substantially from country to country lessons learned in a country may not apply or become misleading in others

4. Need to minimize enterprises’ uncertainty about proposed new scenario

5. Communication and partnership/relationship management are critical

6. ISO 50001/EnMS means CHANGE and it is not about technology and engineering, but mainly about people, processes and practices ... for many that Change is going to be bigger and more difficult!

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EnMS/ISO 50001 - Looking ahead

Understanding What is energy

performance? What does it take to

implement EnMS?

Conformity Assessment Competent Auditors Credible Certification

and Accreditation Bodies

Policies Nationally appropriate Work with industry

EnMS Global Dissemination

Release of

ISO 50001

The CHALLENGES

Achieving impact and market credibility Policy and Conformity assessment frameworks for EnMS/ISO50001

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EnMS/ISO 50001 - Looking ahead

New ISO 50001 related standards

ISO 50002 – Energy audits – Released in July 2014

ISO 50003 – EnMS – Requirements for bodies providing audit and certification of energy management systems – Released in Sep 2014

ISO 50004 – EnMS – Guidance for the implementation, maintenance and improvement of an EnMS – FDIS

ISO 50006 – Measuring Energy Performance using Energy Baselines and Energy Performance Indicators — General Principles & Guidance – FDIS

ISO 50015 – Measurement and Verification of Organizational Energy Performance – General Principles and Guidelines – CD3

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Conclusions

Policy

Conformity Assessment

ISO 50001 EnMS

1. The availability of competent professionals to guide and assist organizations in implementation

2. Credible demonstration to organizations and the market of the tangible benefits of EnMS/ISO50001

3. The level of policy support granted and/or regulation attached to the implementation EnMS/ISO50001

Achieving impact and market credibility Policy and Conformity assessment frameworks for EnMS/ISO50001

ISO 50001’s success in delivering expected benefits and impact to organizations and countries will depend on:

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Quiz 3 – Stakeholders

Question 7 Who are the key stakeholders to consider when analyzing the EnMS adoption?

a) Regulator

b) Certification bodies

c) Technical experts

d) Industries

Question 8 Which is the key govt. challenge to adopt mandatory targets?

a) Establishing metrics

b) Drafting regulations

c) Controlling and enforcing industries

d) Collecting and analysis data

Question 9 What does it mean to be a certified energy manager?

a) Having completed an EnMS course

b) Completing an accredited certification process

c) Having a lot of EnMS experience

d) Graduating as an energy engineer

Question 10 What is the purpose of monitoring, reporting and verification of energy use?

a) Assessing sectorial energy consumption (govt.)

b) Complying with regulation (enterprise)

c) “Check” step in the Deming's cycle

d) Controlling energy performance

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6. Designing a EnMS support Policy Programme

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Part II

Breakout groups

Each group will prepare a plan for their EnMS Scheme for Country A and Country B

Guiding questions:

• How can policy instruments support the introduction of EnMS?

• Who are the necessary stakeholders that have to support the scheme?

• What are the minimum institutional requirements and capacities needed to ensure that EnMS are an effective tool for industry?

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10 key ideas – Quiz Answers Why EnMS?

1) Reasons to adopt EnMS >> systematic improvement of energy performance

2) What is improved? Choosing the right metrics >> energy performance rather than EE or energy intensity

3) Barriers to adopt EnMS >> unique in each case, but technical are normally the most challenging

Support policies?

4) Voluntary adoption>> robust adoption rather than certification in earlier stages and lower cost for SMEs

5) Support schemes with third party verification, such as enterprise recognition programs have shown positive results, reducing costs for SMEs

6) Monitoring and evaluation of policies >> to show how measures meet the intangible benefits, but also translate into reduced KWh, t CO2 or USD

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10 key ideas – Quiz Answers

Elements to adopt EnMS

7) Who are the stakeholders? >> engagement of different government bodies and enterprises is key to promote action

8) What are the existing capacities of different stakeholders? >> barriers analysis show that for enterprises technical barriers are key

9) Personnel certification >> the notion of trust for competent workforces

10) MRV at the enterprise level and ME of the policy program >> being able to track performance is necessary for adoption and validate budget spent to achieve energy savings

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Perceived barriers – industry responses

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Thank you for your attention!

Bettina Schreck Industrial Energy Efficiency Unit UNIDO Vienna International Centre P.O. Box 300 A-1400 Vienna, Austria Tel: 0043 1 26026 3032 E-mail: [email protected]

For more information:

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what are the steps to adopt energy management systems?

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