For many energy managers, especially those just starting out, planning and implementing energy efficiency projects can feel like being lost in a never-ending maze. In a tiger-infested jungle. During a lightning storm. Okay, maybe not quite so dramatic – but you get the picture.
The lengthy, complex and high-risk nature of energy efficiency projects is what compelled Texas-based energy manager Jeff Julia to help his fellow energy managers out: he decided to write a book about it. And not just your typical dry, boring energy management textbook, either. This award-winning work of fiction explores 6 situations in which any energy manager is bound to find themselves at some point in their career – and how to overcome them like an Alpha Energy Manager.
In this exclusive interview with DEXMA, hear from Jeff on what makes a winning energy efficiency project, which technologies fit where (including, yes, blockchain for energy), and how to minimise the biggest risk factors.
Jeff, thanks for taking the time to answer our questions today!
DEXMA: You have been working as an energy advisor for several years now. How has energy management technology evolved since you first started out?
JJ: When I first started out, technology was leveraged very selectively – it was expensive and difficult to use. The only technologies being widely utilised were building automation softwares and variable frequency drives on fan and pump motors. The benefits were ease-of-operation and energy savings.
As software as a service (SaaS) companies have grown in popularity and technology has penetrated every energy consuming system, now every building and piece of equipment can be “smart” and the data easily accessed.
Technology has become more and more user-friendly. There are a lot of options now and it’s easier to take full advantage of the features without going over budget or spending hours learning how to use it.
DEXMA: What is the most common pain point you hear from your clients? Which energy challenge do they struggle with most?
JJ: The most common pain point is what is the best plan to execute on a limited budget with a variety of operational challenges and so many options in the marketplace.
Our clients don’t have the time, resources or budget to figure it out themselves and risk whether results will materialise or not. They work with us because we have a plan that delivers results, eliminates their risks and enables them to have experts on their team without being on their payroll.
The energy challenge they struggle with most is how to ensure energy savings will materialise if they make an investment. Doing expensive measurement & verification studies after the project is complete is reactionary – too little, too late. My award-winning book (link) discusses the proactive approach which all happens before an agreement is signed.
DEXMA: Thinking about your fellow energy providers out there – what do you feel is the most common reason to lose a project? Is it always about a lack of budget?
JJ: Most projects are actually lost due to lack of value for the price and providers failing to protect their customers.
Each of the 6 components I introduce in the book are critically important. When one is left out or the customer does some research and finds information that wasn’t mentioned, not only does that kill trust – it kills the whole project.
DEXMA: There are so many buzzwords out there in the energy world right now – which ones can we chalk up to hype, and which are actually worth paying attention to?
JJ: Blockchain, virtual audits and artificial intelligence for energy are trends that are definitely worth watching. I’m excited about technology enabling the “brain” of buildings to become virtual, real-time, highly informative ecosystems instead of offline out-of-date information scattered amongst various stakeholders.
DEXMA: Let’s talk about multi-site projects with many buildings to keep track of. What is your main challenge in detecting energy savings?
JJ: Collecting all the information you need to get started. For us energy managers, it’s not only collecting that data, but ensuring data quality – that all the variables for each site are accurate and the client knows their options, so they achieve the results they pay for by implementing energy efficiency projects.
This includes tax incentives available, energy and O&M savings achievability, the various utility rates and rebate programs and the local providers in the market.
DEXMA: Industry research experts are talking about the 5 “D’s” impacting the energy and utilities sector – which one do you feel is most important and why?
JJ: Digitalisation – this is the first domino if you will.
By digitising (which technology is making easier and easier), the other 4 “D’s” fall into place quite easily.
DEXMA: Your work deals with risk assessment for energy efficiency projects. Give us an idea of the biggest risk factors your clients typically face, and how to avoid them?
When I wrote the book, I made it a point to have the main character experience them all, and handle them appropriately. There are 6 components to every project and there is an effective process to evaluate each one. You can’t afford to overlook one or take a short-cut on another because you can’t rewind time when a deadline is missed, undo a project or un-pay a provider. Relying on the information used to make the last purchasing decision is outdated the second the purchase is made. So, without familiarity, there’s inherently a lot of risk.
For specific energy efficiency projects, three of the biggest risk factors are:
- Equipment commissioning – to avoid it, get functional performance tests completed with a staff member present. Also, get the results documented and signed off.
- Staff training & stakeholder engagement – Avoid misunderstandings by developing and implementing a communication plan before the project is underway. Ensure the project costs includes staff training (protip: get this in writing!) and make sure the training is signed by both the trainer and trainees.
- Accuracy & achievability of energy and O&M savings – Due diligence here needs to happen pre-purchase: do your research and make sure you know the energy savings methodology used, the data points and assumptions. Cross-check any O&M savings with actual invoices or incurred expenses over the past year and verify whether they are included in the financial benefits analysis. Typically, providers include a clause in their contracts that states savings are estimates, and they are not liable for underperforming results. That’s a lot of risk to take on but there are always several ways to reduce that risk.
DEXMA: Any final words of advice for energy SaaS (software-as-a-service) skeptics?
JJ: Yes! If you find your smartphone helpful, you might want to reconsider energy SaaS – you could be selling yourself short. Take advantage of the free trials and demos available. Explore the areas you are having the biggest challenges. Expand your mind to the possibility that maybe, there is a solution out there. And maybe that solution is cheaper and easier to implement than you might think.
Wise words Jeff, thank you for sharing your experience and insights with us today!
Readers of this blog know that it isn’t always easy to choose the best solution for their energy efficiency projects.
Check out our guide that we specially designed to walk you through the decision making process:
Jeff Julia is the founder of Energy Project Advisors. He is also the author of the book Navigating the Maze of Energy Efficiency Projects. He can be reached at firstname.lastname@example.org.