Assessing Costs, Benefits of the Superior Energy Performance Program

by | May 15, 2014

An alternative view

A recent Energy Manager Today (EMT) article entitled ISO 50001, SEP Certification Costs $319,000 per Facility on Average summarizes only the costs portion of an original research paper, “Assessing the Costs and Benefits of the Superior Energy Performance Program” by Berkeley, Energetics and DOE. Because of this, the EMT article risks being a “turn off” for people considering the SEP/ISO 50001 approach. For this reason, I would like to give another summary of the research.

This excellent piece of original research very systematically works out the real costs and benefits of adopting the SEP/ISO 50001 way of working. This kind of real-world benchmarking is very difficult and is only possible through the very careful “before and after” measurements and surveys done by the research team.

The Berkeley, Energetics and DOE research work has been carried out in a very rigorous way. It is fair and balanced in the way that it adds up the real costs, including the cost of the staff already employed at the facilities. The research team should be congratulated on this landmark work.

The EMT article focuses on the downside, the costs and effort invested, with no reference to the benefits. By referring to the original research paper, one could also truthfully have used the following titles:

“An average SEP facility will save almost $2 million over the next 10 years”

“An average SEP facility will save almost $200,000/year with a once-off investment of only $100,000 in external costs”

However, a more balanced title is:

“An average SEP facility will save almost $200,000/year with a 1.7 year payback on investment”

When a facility manager realizes that 67% of that cost is the time of people that are already employed at the facility, the ISO 50001/SEP proposition becomes very compelling. What the top-down ISO 50001/SEP approach achieves is the deployment of these staff members in the way that is most cost-effective in driving down energy costs.

Furthermore, it has been clearly stated that these figures have been generated in the pilot program for SEP. Implementation costs will be less in future:

  • as noted in the research paper, the facilities agree that the implementation cost will reduce by 20 or 30% when they repeat the process for their other sites;
  • software and other IT-based support will further reduce implementation costs as the ISO 50001/SEP approach becomes more mainstream

In closing, it should be noted that all the existing facilities were already well engaged in energy management. Their average quarterly energy cost savings jumped from 3.4% to 11.3% when they moved from their previous way of working to the ISO 50001/SEP approach. This shows how the best can continue to get better!

Paul F. Monaghan, Ph.D., is CEO of Enerit. Paul is a 30-year veteran of energy management throughout North America and Western Europe. As Enerit CEO, he is responsible for setting the strategic direction of Enerit energy software products. Enerit is a global leader in delivery of innovative systematic energy management system (EnMS) software to support Energy Star, ISO 50001, SEP and all EnMS based on the ISO 50001 approach. Enerit EnMS software is complementary to and integrates with monitoring and energy reporting software. Enerit software includes dynamic Sankey diagrams to make it easier to get started with a systematic EnMS approach.

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