Energy Consumption Trending: The Low-Cost Way to Keep Costs Down

By Jerry Schmits Director, KLH Energy Solutions | September 07, 2014

I recently returned from visiting with a colleague responsible for managing energy use and facility operations in thousands of locations throughout the United States for the "ABC Company". During conversation, he mentioned that he had been successful implementing a new schedule for the proactive replacement of aged HVAC equipment throughout his portfolio of stores. Gone were the days of reactively responding to store and regional managers anxious to know when they'd have the air condition restored. And while the practice of operating a "run-to-fail" strategy likely helped defer capital expenditures in the short-term, it put a heavy burden on the O&M budget, ultimately affecting individual store profitability.

There were two primary drivers behind this paradigm shift in the company's facility management culture: 1) mass failure of split-system HVAC units throughout the south region in 2013 (due to extreme summer temperatures), and 2) the availability of energy –consumption trend data. By managing utility cost and consumption data, this national retailer was able to identify the point of diminishing returns based upon the age of HVAC equipment and the increase in energy use. Incorporating a decision-making process founded in energy consumption trends led to a company-wide transformation in the attitude towards scheduled equipment replacement. And the results were good-fewer emergency replacements, lower annual energy cost and consumption, and a maintenance / service expense line-item that came in under budget. And for this company-once the energy database had been established, the trending of energy consumption proved to be a low-cost way to identify problems before they became headaches.

Compiling Energy Data

Employing an energy-management mind set begins with establishing a foundation for actionable information. In its most fundamental form, energy and utility invoices provide a high-level source of information. What makes it actionable is the understanding of how energy is used throughout your building's mechanical and electrical systems. Through energy modeling, the equipment that serves these systems is evaluated for its energy-consuming properties. A simple audit will reveal the size and type of equipment, yielding information on both the amount of energy consumed and the time of day in which the consumption occurs. When these input variables are incorporated into an energy model, the building's energy consumption profile comes into focus. Knowing what percentage of overall energy consumption is associated with such consumers as HVAC, lighting, plug load and others, is key to turning "data" into actionable information.

Imagine having the ability to manage energy use by region or district, individual store or even down to the specific piece of equipment. This level of understanding is made possible by a few simple disciplines: collecting utility data and knowing how it's used throughout your building or facility portfolio. By managing to that level of detail, my colleague was able to identify the point in time (within the life-cycle of his split-system units) when energy consumption would begin to increase. He began by charting the energy use index (kBtu/sf) of his stores. A simple query of locations, by HVAC equipment type, revealed many outliers-those facilities using significantly more energy than peer facilities of the same prototype, size and climatic/geographic location. From that sub-set of data points, he was able to extrapolate that those "outliers" had one thing in common: they were operating HVAC equipment that was substantially beyond its useful life.

The final component to this evaluation came when he ran the same query using the most recent two year period. What he found was staggering: of those facilities represented as "outliers", nearly 70% experienced HVAC equipment failure, requiring system replacement. Using historical purchasing information, it was determined that the cost of emergency equipment replacement was between 30-40% higher than the cost of equipment installed during planned, new construction. This information provided a stark insight, illustrating the cost-premium associated with operating a "run-to-fail" strategy-and it presented the silver-bullet needed to create the argument for change. In the following weeks, a proposal was presented to executive management seeking authorization to secure funding for a scheduled replacement of aging equipment…but approval never came and the proposal was shelved.

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