EDF Reports On Energy Management Trends

The report explores how leadership in energy management has changed over time to deliver increased business value. Energy efficiency is just the beginning.

The time is now: businesses must incorporate energy management into their core strategy to remain competitive. This is a conclusion from the Environmental Defense Fund (EDF) Climate Corps, via its latest report: “Scaling Success: Recent Trends in Organizational Energy Management.” The report is an exploration of how leadership in energy management has changed over time to deliver increased business value.

Since the summer of 2008, EDF Climate Corps, an innovative graduate fellowship, has embedded over 700 fellows inside leading organizations with a simple goal in mind: advance energy projects through a set of actionable recommendations.

EDF has been carefully tracking each project opportunity, and over the years has built the largest known database of more than 3,200 on-site energy management projects. The data, drawn from EDF Climate Corps’ work with more than 350 companies, non-profits, and government agencies across the U.S. and China, reveals the emergence of some clear trends and changes, according to the organization’s new report.

1. Energy efficiency is just the beginning: Organizations are increasingly engaging in high-level and strategic energy management activities, including: clean energy projects, data analysis, and financial evaluation and planning.

energy management
Figure 1

In the old days it might have been okay to only work on simple, single site energy efficiency equipment upgrades and basic retrofits, but this is no longer the case. Now, alongside ongoing energy efficiency efforts, many organizations are doing much broader work, including high-level strategic analysis with a heavy reliance on big data and increasing integration of clean energy technologies. Figure 1, seen here, is a visualization of how energy project types have evolved.

2. Turning one win into many: Organizations are scaling up the size and scope of their energy projects.

In the past, efficiency projects proposed by EDF Climate Corps fellows mainly focused on a single site. Now, organizations are asking fellows to design investment opportunities for multiple sites or multiple buildings at a time. Clearly, the success of pilots/single site activities has set the stage for larger, multi-site projects.

3. Front-loaded costs… but greater ROI: Energy project investment opportunities offer increasingly significant financial returns, but may require larger upfront investments.

The days of the low-cost, no-cost energy efficiency improvement may be over. Many projects call for organizations to make substantial upfront capital investments, but these projects deliver more value. While the average initial investment has grown by nearly a factor of four since 2008, the average net present value has also grown — nearly three-fold since 2008.

energy management
Figure 2
energy management
Figure 3

4. More environmental bang for the buck:
The scale of potential environmental benefits has increased even faster than the financial opportunities.

While acknowledging the key challenges and barriers organizations face, this report also offers a look at what’s next and provides clear, actionable recommendations for organizations. As technologies have improved and companies have become more strategic about how they chose and implement energy projects, their investments are providing better environmental returns. Between 2008 and 2015, the average GHG reductions of evaluated projects grew more than five-fold, outpacing the increases in average NPV, initial investment and annual savings.

To download the report, “Scaling Success: Recent Trends in Organizational Energy Management,” visit this page on the EDF website.