DTEM: Building the business case

Looking to invest in Digital Technologies for Energy Management? This section describes the benefits to consider when building your business case.

 

Sections in this online guide:

  1. Why use Digital Technologies for Energy Management (DTEM)?
  2. DTEM: Components of an energy strategy
  3. DTEM: Building the business case
  4. DTEM: Selecting the right system
  5. DTEM: Select and evaluate suppliers
  6. DTEM: User guide

3. DTEM: Building the business case

Identify the need

The decision to invest in DTEM should ideally be taken as part of a wider energy management strategy. Installing DTEM alone will not save energy: the key to the successful implementation of DTEM is for the energy management/strategy team to have a clear vision of what they need the DTEM to achieve i.e.

  • Is it to perform a purely metering function to verify bills?
  • Is the goal to monitor energy use and subsequently help target opportunities for improvement?
  • Or, is it to provide more accurate process control? 

The required system functionality needs to be clearly understood, sufficiently resourced and optimally utilised as part of the wider energy management systems if the long-term value is to be realised.

Making a business case

For a business case to be robust there are seven key factors that need to be assessed:

  1. What are decision makers looking for?
  2. Who makes the decisions?
  3. Establish influence and reputation
  4. Building the case
  5. Draft the proposal
  6. Presenting the proposal
  7. Maintain momentum

What are decision makers looking for?

 

Your proposition will have the best chance of acceptance if it offers the decision makers something they want, and is presented in a way they can understand.

Who makes the decisions?

Different decisions may be made at different levels, and it is not always just senior managers who need to be convinced. Who is it you are trying or need to convince? What’s their motivation? Consider how best to present the information to them.

Establish influence and reputation

Life will be a lot easier if you can develop and maintain a reputation for sound ideas, and engage the help of someone who moves in the circles you are trying to influence. A sponsor can help you understand the decision maker’s perspectives, be an ambassador during project development, and act as an advocate in the presentation.

Building the case

It is essential to prepare thoroughly by collecting the most reliable data and evidence you can obtain, and subjecting your proposition to rigorous evaluation.

Your business case must identify and discuss all the possible downside risks, in order to show your directors that they have been considered and are containable or controllable.

Draft the proposal

Your written proposal needs to make it easy for people to see at a glance what you want from them and why; but it will also need to give sufficient detail to satisfy the needs of the diligent critics among them.

Presenting the proposal

However well-written your proposal, its chances could be diminished if you do not present it in a convincing way. First, before you even get to the presentation, prepare thoroughly: know the salient facts about the project and be prepared to defend it in depth. Try to anticipate questions (perhaps with help from your senior management sponsor). Find out how long you have been allocated. Rehearse, not necessarily word for word, but at least the key ‘waymarks’.

Maintain momentum

Implementing the proposed project and monitoring its success are as much part of the process as getting approval in the first place.

Building a successful business case will entail highlighting benefits over and above a purely monetary saving.

Benefits of DTEM

Here we look at some of the obvious and not so obvious benefits of deploying DTEM that should be considered when developing a business case for DTEM. Some of these benefits can be quantified and some are more intangible.

It is difficult to provide “rule of thumb” savings as every installation is so different, but suppliers should be able to make an estimate for the potential savings of different types of solution for your premises.

Invoice verification 
Has there been incorrect billing you can demonstrate? What has been the scale of the problem in the past? What costs were/are incurred to rectify? E.g. Staff time, etc. Quantifying the costs will help with building the business case for DTEM provision.

Reporting 
DTEM can provide valuable information for business reporting, e.g. energy and carbon reporting. The output from the associated DTEM software will help, and even automate, this deliverable.

KPI development 
DTEM can help demonstrate/quantify business performance against sector specific key performance indicators. E.g. kWh/m2 floor area, or kWh/kg of product.

It is always useful to benchmark against what competitors or the wider sector are achieving in terms of efficiency to demonstrate/identify the savings potential.

Staff awareness training 
The provision of building/process specific energy data lends credibility to training goals and provides direct feedback on training impact.

Corporate social responsibility (CSR) reporting 
Demonstrating achievement of CSR goals will require robust verification. SCADA systems can provide the granularity of data to help quantify your stated goals, e.g. energy consumption, water use or carbon reduction. CSR reporting is increasingly important to both business customers and consumers.

Product carbon footprinting 
Sub-metering as part of wider aM&T/SCADA systems will provide greater granularity of (product specific) data leading to a more accurate footprint.

Staff training/ process optimisation 
Sub-metering similar process lines as part of a wider aM&T/SCADA system will allow the comparison of output for a given energy consumption, e.g. kWh used/units produced and/or per shift. Significant disparity in energy consumption between process lines/shifts should be investigated and understood as the findings will help establish best practice guidance on the operation of the process or a training requirement for particular shifts. This approach can often identify poorly performing equipment or processes, yielding savings.

Preventative and planned maintenance 
Sub-metering similar process lines as part of wider aM&T/SCADA system will allow typical process consumptions to be tracked and established over time. A relative increase in consumption profiles would indicate faulting or poorly maintained equipment. Such information can be used to help inform/optimise maintenance schedules.

Achievement of performance standards 
ISO50001, ISO14001, Carbon Trust Standard or carbon footprint limited assurances such as ISO14604 Part 1 & 2 – Organisational and project footprinting all require data which can be more easily collected, collated and reported using DTEM systems.

Project identification, justification and verification 
An aM&T/SCADA system will provide profiled data of sufficient granularity to help identify areas of waste, estimate product savings and verify project costs and economics. Such verifiable savings provide the confidence to reinvest in efficiency improvement projects into the future.

Building controls upgrade 
Typical timeclock and temperature controls lack the control sophistication required by multi occupancy, multi functioning buildings. This often results in poor control with out of hours heating/cooling, etc.

A building management system will automate this control according to stipulated occupation and temperature requirements so reducing consumption.

Better system optimisation 
A Building Energy Management System (BEMS) can provide boiler optimised start, meaning it learns the optimum time to turn boilers off and on to meet the required temperature settings within a specified occupancy time. The system will automatically adjust according to changes in external temperature relative to internal temperature so holding the heating off if not required.

Similarly, SCADA controls will help optimise process efficiency by providing the necessary feedback and automated adjustment to ensure that the required operating parameters are maintained.

Improved employee productivity 
Studies have shown a direct correlation between high CO2 levels and ‘sick building syndrome’ due to inadequate number of air changes. A building management system can adjust airflow to maintain specified CO2 levels leading to a more productive workforce while avoiding over ventilation if not required.

Go to section 4: Selecting the right system