Energy management boom faces regulation

This autumn the International Electrotechnology Commission debated new standards for energy efficiency, in the wake of other groups pursuing similar objectives within the International Standards Organization (ISO) and CEN/CENELEC, the EU’s European Committees for Standardisation and Electrotechnical Standardisation.

Multiple efforts

The CEN, under the aegis of the EU, completed a public consultation on its draft standard prEN 16001, “Energy Management Systems – Requirements with guidance for use” in July this year. prEN 16001 will, likely next year, extend the scope of the ISO 9001 and ISO 14001 environmental standards into energy management, while in circular fashion, the ISO is planning to do likewise with a new ISO 50001 standard by 2011.

The EU’s prEN 16001 is intended to help organisations of all types and sizes to establish the systems and processes required to improve energy efficiency, and to be used independently of or integrated with other management systems.

With these efforts from different quarters adding to national standards in some countries, there may soon be more alternative energy management standards than companies might wish for, but the potential of each to be used in conjunction with or in place of others will at least help multinationals operating both within and beyond the EU.

What standards aim to achieve

The proposed prEN 16001 establishes no absolute requirements for energy performance beyond the commitments in the energy policy of the organisation and its obligation to comply with relevant legislation, so companies will be able to conform to its requirements regardless of their levels of energy performance.

As with many other standards, it’s more about processes and incremental improvements than absolute measures; CEN expects adoption of prEN 16001 to help companies to set up continuous improvement processes for efficient energy use.

The standard lays down requirements for continual improvement in the form of more efficient and sustainable use of energy, irrespective of specific types of energy. It will encourage organisations to implement an energy monitoring plan as well as energy use analysis.

Alongside prEN 16001, a draft EU standard for energy efficiency services will be published in March 2009 for public comment. It will outline standards for calculating energy consumption, on energy audit methodologies, and on energy certificates, which the EU hopes may in future be tradable.

The EU standards bodies’ work on energy management is predicated by an EU Energy Efficiency and Energy Services Directive, launched in 2008, which concentrates on end-use efficiency. Article 4 of this directive imposes an energy end-use savings target of 1% per year for nine years, from 2008 to 2017, with 9% to be met by the ninth year. Associated with this target is an EU Action Plan for Energy Efficiency which concentrates on primary energy supply: the EU has estimated that at least 20% of the energy used in Europe is wasted through inefficiencies, at an estimated cost of over €100bn a year, based on an oil price of US$48 per barrel.

Certifying third-party expertise

Two of the jargon words corporate staff new to energy standards may need to learn are ‘ESCO’ (Energy Management Company) , and ‘EES’ (Energy Efficient Services) – the suppliers who will be touting for efficient energy supply contracts and associated services.

The EU Energy Efficiency and Energy Services Directive mandates the removal of legal barriers to public subsidies of energy efficiency schemes, encourages third-party financing of energy-saving investments, and encourages performance contracting, whereby power suppliers can be rewarded for selling energy efficiency services.

The UK has seen ESCOs grow their share of energy supply faster than in other EU markets, and whereas in many EU member states ESCOs are most often publicly-owned entities (involved, for example, in developing combined heat & power (CHP) facilities), the UK’s first ESCO was a privately-operated oil company subsidiary formed back in 1984. The UK’s Centre for Economic & Environmental Development estimates that the market for UK energy management services is likely to nearly double to £4.27bn by 2010, from £2.65bn in 2005.

From standards to legal requirements

Kris Szajdzicki, founder & chairman of Northern Design Electronics, told ClimateChangeCorp.com, “The publication of prEN 16001, scheduled for next year, will have a significant impact on management systems throughout Europe – as will the new ISO 50001 (scheduled to arrive in 2011) on the rest of the world. There are also other standards in the pipeline on White Certificates (which will certify that a certain reduction of energy consumption has been achieved), on carbon calculations, audits, etc; all of these will have an impact on corporate Britain – even more so when the government decides to implement some of the recommendations into law.”

2020 vision

In the July 2008 edition of The McKinsey Quarterly, the consultancy’s global energy and materials practice set out its estimate that US$170 billion a year invested in energy efficiency from now until 2020 could halve forecast growth in global energy demand – which the International Energy Agency recently estimated at 50% between 2005 and 2030. That effort could also deliver up to half of the CO₂ emissions abatement needed to cap atmospheric greenhouse gases at 450ppm, according to McKinsey.

For most corporate energy customers, improving the efficiency of lighting, cooling, heating, and of manufacturing machinery and transport should clearly produce a worthwhile return in an energy market which is likely to be at best unpredictable over the coming decades. And common standards to enable companies to trust third-party ESCOs and agencies to achieve scale in outsourced expertise and joint investments will bring the fruits of energy efficiency investment all the closer.