ISO 50001 Energy Management

Continuous Improvement Driving Financial Results

Don Macdonald Director of Sustainability & Energy Services UL DQS, Inc.

UL DQS
2800 Staff / 2300 global Auditors 76 offices in 55 countries Over 20,000 customers, 100 countries

Executives Seek Certainty

Specific operational strategy must be the key part of the Energy Policy and M & V Strategydone properly, will lead to a positive ROI on the overall Benchmarking, Certification or Non-Certification process

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Source: McKinsey

Executives Seek Certainty

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Source: McKinsey

Executives Seek Certainty

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Source: McKinsey

Benchmark your EnMS Maturity

Who are the Decision Makers

Organizational Barriers to Energy Management

Energy not valued as an organizational currency Continuous monitoring, metrics and performance measurement absent Economic performance, financial and qualitative benefits (ROI) absent First costs more important than recurring costs Disconnect between capital and operating budgets Technical training lacking Sustainability culture immature Deep Process quality management systems not embedded Stakeholders focus on production and not efficient use of energy or resources Functional silos vs. cultural silos IT data, monitoring and systems

Energy is the Strategic GHG & Climate Driver

Uncertainty in carbon markets, environmental regulations, concerned investors, climate change policy pose risks that cannot be managed using existing norms and procedures

Harnessing the Power of Process

Business processes for competitive advantage: Six Sigma Lean Manufacturing Continuous Improvement
40% 35% 30% 25% 20% 15% 10% 5% 0% Energy Management Standard Continuous Improvement ISO 9001 or 140001 Six Sigma Lean

ISO 9001 ISO 14001 Plan-do-check-act

Formal energy management standards (ANSI, BSI):

JCI, 2011 10

Comprehensive Energy Management- RARE

JCI Study - 83 Organizations surveyed
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Training for employees: 76%

Formal review of energy policy: 47% Incentives for energy efficiency success: 45% Effective & empowered energy team: 41% Enterprise level energy data: 29% Corporate reduction goal: 28% Energy action plan for organization: 28% Formal energy policy: 27% C-level responsibility: 27% Adopted energy standard: 27%

Number of Organizations

30 25 20 15 10 5 0 0-2 3-4 5-6 Energy Management Score 7-8

Result: Mixed Practices

9-10

JCI 2011
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Energy Investments & Operations

Impact is multi-dimensional, each organization unique. Facility, engineering project specification and procurement staff critical links Foundational tools (metrics, baseline and verification) are critical.

Source: UNIDO 2010

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Quality Systems & Shareholder Value Linkage

Drive Return on Investment (ROI) across manufacturing & operating silos:
Process level execution critical to performance Continuously managed energy processes: Reduce exposure to energy costs (Internal hedging and volatility management) Reduce carbon related emissions without negative effect on operations Continual improvement of energy intensity Value both avoidance & savings for internal and external metrics (e.g. emissions, utility credits, reduced labor intensity, CAPEX, etc.)

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Energy Benchmarking
ISO 50001 provides a proven model that helps organizations

systematically plan, benchmark and manage energy use.

ISO/PC 242 Chair, E. Pinero.

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Market Adoption Indicators

ISO 9001 ROI benchmarks 9-13% MNCs mandated or implied Tier 1 & 2 adoption Competitive advantage & supply chain drivers added further incentives Operational benefits realized but marginally documented No real performance metrics ISO 14001 ROI Benchmarks 7-12% Similar drivers as ISO 9001, plus Environmental responsibility Evolving into CSR & CSV No real performance metrics ISO 50001 Published ROI Data Suggests 6.5-17% range expected within 1-2 yrs Performance metrics (self-defined) incorporated Web-based & continuous performance tools Measured benchmarking Compatible with ISO 9001, 14001, & SEP

Quality Mgmt
Environ Mgmt

Information Security

Energy Mgmt
Risk Mgmt

Procurement

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U.S. Pilot Facilities Adopting ISO 50001 & SEP

Commercial buildings piloting Superior Energy Performance: Cleveland Clinic US GSA Grubb & Ellis Company Marriott International, Inc. MIT Campuss Target Corporation Wal-mart Stores, Inc. 3M Alcoa Allsteel Amcor PET Bentley Prince Street Bridgestone Tire Cook Composites Didion Milling, Inc Dow Chemical Eaton General Dynamics Free scale Semi Haynes International Holcim JR Simplot Lockheed Martin Cooper Tire Kenworth Trucks Neenah Foundry Company

Nissan Owens Corning Nissan Schneider Electric Spirax Sarco Traco Volvo World Kitchen

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June2011

SEP & ISO 50001 Energy Management

Benefits of an effectively implemented EnMS can include:

Reduced operational and overhead costs increased profitability

Reduced air emissions, such as GHG Increased efficiency of energy sources Increased assurance of legal, internal compliance Variables affecting energy use and consumption are identified
ISO 50001 is a foundational tool that any organization can use to manage energy. Components in place: Baseline Policy Plan Team/Leader

Superior Energy Performance

Facility-level conformance to ISO 50001 with validated energy performance improvement

ISO 50001

ISO 50001

DOE, 2011

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ISO 50001 Key Elements

Energy policy Cross-divisional management team Energy review Baseline (s) Energy performance indicators (EnPIs) Energy objectives and targets Action plans Operating controls and procedures Measurement and verification Reporting of progress

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Step 1 Commitment Step 2 - Data Step One:

Secure Commitment from Top Management
Set Energy Policy Define Scope and Boundaries

Step Two:
Collect, Track, and Analyze Energy Data
Current and past energy use, consumption Estimate future energy use, consumption

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Step 3 Energy Use Step Three:

Identify Key Energy Uses Facilities Systems Equipment Processes Personnel Relevant Variables
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Step 4 - Baseline

Step Four:
Establish a Baseline
Reference point for energy performance Outlines current energy performance Predicts future energy performance Provides benchmarking method

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Step 5 - Opportunities Step 6 - Prioritize Step Five:

Identify Energy-Saving Opportunities
New Sources Renewable Sources Alternative Sources

Step Six:
Prioritize Opportunities
Return on Investment Ease of Implementation

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Implementation and Operation

Competency, Training and Awareness Communication Documentation, Control of Documents

Operational Control Design Procurement

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Checking and Management Review

Monitoring, Measurement and Analysis Evaluation of Compliance Internal Audit Non-Conformance, Correction, Corrective and Preventive Action Control of Records Management Review
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EnMS and Other Standards

ISO 9001:2008 Design Procurement ISO 14001:2004 Legal, Other requirements Significant Energy Use Objectives, Targets, Action Plans Evaluation of Compliance
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Capital asset planning Production Process Planning Carbon & GHG Waste reduction Supply chain marketability New product/service opportunities Employee engagement Retail: market differentiation

Recent Case Studies & Results

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Example Results AU Optronics, Taiwan

LCD TVs Taiwan, Province of China ISO 50001 implementation achieved 10 % energy conservation at the plant this year, save an estimated 55 million kWh of electricity and reduce carbon emissions by 35,000 tons. The company now plans to adopt an ISO 50001based energy management system at all its manufacturing plants.
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Example Results Dahanu Power Station, India

The plant conducted a series of targeted investments since March 2010 which, aided by the organizations new ISO 50001-based energy management system, are expected to yield annual savings of about INR 96.4 million ($1.9M USD) from raised energy efficiency and management.

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Example Results Schneider Electric US

ISO 50001 & SEP Program demonstrate exceptional savings at its flagship manufacturing plant in USA. Example: $27,000 USD savings annually from VSD installation, lighting, heat recovery. Plus a new 1MW solar field and additional savings from other projects yet to be announced estimated greater than 10%. Payback range avg. 18 months. 90% of worldwide facilities are ISO 140001 certified.
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Example Results Cook Composites & Polymers, US CCPs Houston plant attained SEP Gold Certified Partner status and achieved a 14.9% improvement in energy efficiency over a two-year period. The energy efficiency measures taken by CCP resulted in 31,700 million British thermal units of energy saved and allowed the company to capture $250,000 in cost savings per year.
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UL DQS Inc. ISO 50001 Tools

UL DQS offers: Practitioners Guide & Self Assessment Tool

Practitioners Guide

Scorecard Tool
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Energy.Interest@us.dqs-ul.com 800.285.4476 x3328 www.ul-dqsusa.com