Overview of ISO 50001:2011 – Energy Management System (EnMS)

1. Overview of ISO 50001:2011 – Energy Management System (EnMS)

2. The word “energy” incidentally equates with the Greek word for “challenge”. I think there is much to learn in thinking of our federal energy problem in that light. Further, it is important for us to think of energy in terms of a gift of life” Thomas Carr, U.S. Senate Commerce Committee “Of one thing we can be sure: energy will be more challenging and more important in the future. Will you, and your business, be ready?” Peter Schwartz, Chairman, Global Business Network

3. Global Energy Trends Global demand for all energy sources is forecast to grow by 57% over the next 25 years By year 2030, 56% of the world’s energy use will be in Asia Electricity demand will grow by at least 40% by 2032 New power generation equals to nearly 300 (1,000 MW) power plants will be needed to meet electricity demand by 2030. Currently, 50% of electrical generation relies on coal and fossil fuel; while 85% of greenhouse gas emissions result from energy-consuming activities supported by fossil fuels. Source: Power annual deals analysis 2011 by Fast Market Research

4. Why Manage Energy? Unfortunately, capturing energy waste has been hampered by a lack of focus on energy management. Too often energy management is characterized as: Decentralized Poorly-coordinated Focused on paying bills & running the powerhouse Reactive Undervalued Considered capital intensive

5. What Energy Management can do? Organizations that have adopted effective energy management strategies and built successful energy programs have had different results. Consider the following: Ford Motor Company has saved over $75 million through effective energy management. USAA Real Estate has realized a 5% annual energy savings and increased the asset value of a California building by $1.5 million due to energy efficiency upgrades. Eastman Kodak saved more than $8.6 million in operating costs in 2002 from its energy management efforts. Hines estimates the difference in operational costs between its energy efficient buildings and inefficient buildings at more than $13 million. Fairfax County Public Schools estimates an annual energy savings of $4.5 million from energy efficiency improvements.

6. Why Isn’t Industry More Energy Efficient? The business of industry is not energy efficiency Facility engineers typically do not become CEO or CFOs Budgets are separate for equipment purchases and operating costs Budgets are separate for energy and maintenance costs Data on energy use of systems is very limited Lack of experience in assessing performance or evaluating performance improvements Opportunities to become more energy efficient are overlooked Technical ability across many fields may be rare

7. Energy Management – Global Frameworks

8. Typical Steps for Energy Management 1 Metering your energy consumption and collecting the data Finding opportunities to save energy, and estimating how much energy each opportunity could save. 2 3 Taking action to target the opportunities to save energy 4 Tracking progress by analyzing metered data (how well the energy-saving efforts have worked)

9. Energy Star Step 8: Recognize Achievements Step 7: Evaluate Progress Step 6: Implement Action Plan Step 5: Create Action Plan Step 4: Set Goals Step 3: Assess Performance Step 2: Form a Dedicated Team Step 1: Commit to continuous improvement

10. The Energy MAP (Management Action Plan) • Developed by SEAI (Sustainable Energy Authority of Ireland) • Helps in identifying potential areas of maximum wastage of energy therefore minimizing energy usage • Works on 5 pillars of energy management: • Commit • Identify • Plan • Take Action • Review

11. 5 Pillars and 20 steps of Energy MAP PLAN DO CHECK / ACT

12. Energy Efficiency – Focus Areas

13. ISO 50001 Timeline Official Date of Release: June 15, 2011 (First Edition)

14. ISO 50001:2011 Energy Management System (EnMS) is defined as: A set of interrelated or interacting elements to establish an energy policy, energy objectives, processes & procedures to achieve efficient energy management system.. EnMS provides a Framework of Requirements enabling organizations to : Develop a policy for more efficient use of energy Fix targets and objectives to meet the policy Use data to better understand and make decisions concerning energy use and consumptions Measure the results Review the effectiveness of the policy Continually improve energy management

15. What will it do? Assist organization in making better use of their energy resources Facilitates communication for the proper allocation and utilization of energy resources Promote energy management best practices and foster the correct behaviors for energy management Assist organizations in the evaluation and prioritizing the usage of energy-efficient technologies Provide a framework for promoting energy efficiency throughout the supply chain Facilitate energy management improvements for greenhouse gas emission reduction Allow integration with other management systems such as EMS, QMS and OHSMS.

16. Why ISO 50001? Benefits to the organization Broad Applicability Applies to all business sectors Actively manage energy use and costs Develops baseline of energy use Continual Improvement of Energy use versus product output over time Reduced Emissions without a negative impact on operations Leverage existing continual improvable process Potential for Savings to be used for emission credits Continuous cost reductions in energy consumption

17. Cost reductions with EnMS Implementing EnMS

18. ISO 50001 Framework

19. How does it align? EnMS integration with other Management Systems

20. P-D-C-A for ISO 50001

21. What’s in the Standard? • Foreword • Introduction • Scope • Normative references • Terms and Definitions • Energy Management System Requirements • 4.1 General Requirements • 4.2 Management responsibility • 4.2.1 Top Management • 4.2.2 Management representative • 4.3 Energy Policy • 4.4 Energy Planning • 4.4.1 General

22. What’s in the Standard? • 4.4.2 Legal requirements and other requirements • 4.4.3 Energy review • 4.4.4 Energy baseline • 4.4.5 Energy Performance Indicators (EPI) • 4.4.6 Energy objectives, energy targets and energy management action plans • 4.4.7 Energy Planning • 4.5 Implementation and Operation • 4.5.1 General • 4.5.2 Competence, training and awareness • 4.5.3 Communication • 4.5.4 Documentation • 4.5.5 Operational control • 4.5.6 Design • 4.5.7 Procurement of energy services, products, equipment and energy

23. What’s in the Standard? 4.6 Checking 4.6.1 Monitoring, Measurement and Analysis 4.6.2 Evaluation of compliance with legal requirements and other requirements 4.6.3 Internal audit of EnMS 4.6.4 Nonconformities, Correction, Corrective action and preventive action 4.6.5 Control of records 4.7 Management Review 4.7.1 General 4.7.2 Input to Management review 4.7.3 Output to Management review

24. Clause 1 - Scope Energy Management System • Establish • Implement • Maintain • Improve ISO 50001 WHAT HOW RESULT Following a systematic approach in achieving continual improvement in Energy Performance

25. Clause 3 - EnMS Terms and Definitions • Energy • Refers to the various forms of energy, including renewable, which can be purchased, stored, treated, used in equipment or in process, or recovered • the capacity of the system to produce external activity or perform work • Energy Baseline • Quantitative(s) reference providing a basis for comparison of energy performance • Energy Consumption • Quantity of energy applied • Energy Efficiency • Ratio or other quantitative relationship between an output of performance, service, goods or energy, and input of energy • Energy Management Team - Person(s) responsible for effective implementation of the energy management system activities and for delivering energy performance improvements

26. Clause 3 - EnMS Terms and Definitions • Energy Objective - Specified outcome or achievement set to meet the organization’s energy policy related to improved energy performance • Energy Performance - Measurable results related to energy efficiency, energy use and energy consumption • Energy Performance Indicator (EnPI) - Quantitative value or measure of energy performance, as defined by the organization • Energy Services - Activities and their results related to the provision and/or use of Energy Policy - Statement by the organization of its overall intentions and direction of an organization related to its energy performance, as formally expressed by top management • Energy Use - Manner or kind of application of energy (examples: ventilation, lighting, heating, cooling, transportation)

27. 4. ENERGY MANAGEMENT SYSTEM

28. 4.1 GENERAL REQUIREMENTS • The organization shall • Establish, document, implement, and maintain an energy management system (EnMS) in accordance with the requirements of this international standard. • Define and document the scope and boundaries of its EnMS. • Determine and document how it will meet the requirements of this standard in order to achieve continual improvement of its energy performance and of EnMS.

29. 4. ENERGY MANAGEMENT SYSTEM

30. 4.2 MANAGEMENT RESPONSIBILITY- 4.2.1. General 4.2.1 General Top management shall demonstrate its commitment and support to the EnMS and continually improve its effectiveness by: • Establishing, implementing, and maintaining the energy policy. • Appointing a management representative and approving the formation of an energy management team. • Providing the resources needed to establish, implement, maintain and improve the energy management system. • Identifying the scope and boundaries to be addressed by the energy management system. • .

31. 4. 2 MANAGEMENT RESPONSIBILITY – 4.2.1. General 4.2.1 General • Ensuring EnPIs are appropriate to the organization. • Communicating to the organization the importance of energy management; ensuring energy performance objectives and targets are established. • Including energy considerations in long-term planning if applicable. • Ensuring that results are measured and reported. • Conducting management reviews.

32. 4.2 MANAGEMENT RESPONSIBILITY - 4.2.2 Roles, Responsibility and Authority 4.2.2 Roles, Responsibility and Authority Top management shall appoint a management representative with the appropriate skills and competence, who, irrespective of other responsibilities, has the responsibility and authority to: • Ensure the energy management system is established, implemented, maintained, and continually improved in accordance with this International Standard. • Report to top management on the performance of the energy management system. • Report to top management on changes in energy performance. • d) Identify person(s), authorized by an appropriate level of management, to work with him or her in support of energy management activities.

33. 4.2 MANAGEMENT RESPONSIBILITY - 4.2.2 Roles, Responsibility and Authority 4.2.2 Roles, Responsibility and Authority e) Plan and direct energy management activities designed to support the organization’s energy policy. f) Define and communicate responsibilities and authorities in order to facilitate effective energy management. g) Determine criteria and methods needed to ensure that both the operation and control of the energy management system are effective.

34. 4. ENERGY MANAGEMENT SYSTEM

35. 4.3 ENERGY POLICY The energy policy shall state the organization's commitment for achieving energy performance improvement. Top management shall ensure that the energy policy: • Is appropriate to the nature and scale of, and impact on, the organization's energy use. • Includes a commitment to continual improvement in energy performance. • Includes a commitment to ensure the availability of information and of necessary resources to achieve objectives and targets. • Includes a commitment to comply with applicable legal and other requirements to which the organization subscribes which relate to its energy use.

36. 4.3 ENERGY POLICY • Provides the framework for setting and reviewing energy objectives and targets. • Supports the purchase of energy efficient products and services. • Is documented, communicated, and understood within the organizations. • Is regularly reviewed, and updated as necessary.

37. 4. ENERGY MANAGEMENT SYSTEM

38. 4.4 Energy planning – 4.4.1 General 4.4.1 General • The organization shall conduct and document energy planning that includes the following: • legal and other requirements to which the organization subscribes, • energy review, • energy baseline, • energy performance indicators, • objectives, • targets, • action plans. • Energy planning shall lead to activities to improve energy performance.

39. 4.4 Energy planning

40. 4.4 Energy planning – 4.4.2 Legal & Other Requirements 4.4.2 Legal and Other Requirements • The organization shall identify and have access to the applicable legal and other requirements to which the organization subscribes related to its energy uses. • The organization shall determine how these requirements apply to its energy uses • It shall also ensure that these legal and other requirements to which the organization subscribes are taken into account in • establishing, • implementing and • maintaining the energy management system.

41. 4.4 Energy planning – 4.4.3 Energy Review 4.4.3 Energy review • The organization shall develop, record, and maintain an energy review. • The methodology and criteria used to develop the energy review shall be documented. • To develop the energy review, the organization shall: a) Analyze energy use based on measurement and other data • identify current energy sources • evaluate past and present energy use and consumption • estimate future energy use and consumption

42. 4.4 Energy planning – 4.4.3 Energy Review b) Based on energy use analysis, identify the areas of significant energy use and consumption • Identify the facilities, equipment, systems, processes and personnel working for or on behalf of the organization that significantly affects energy use and consumption. • Identify other relevant variables affecting significant energy use and consumption. • Determine the current performance of facilities, equipment, systems, and processes related to. • Identified significant energy uses.

43. 4.4 Energy planning – 4.4.3 Energy Review c) Identify, prioritize, and record opportunities for improving energy performance, including, where applicable • Potential energy sources, use of renewables, or alternative energy sources. • The energy review shall be updated at defined intervals and in response to major changes in facilities. • Equipment, systems, or processes.

44. 4.4 Energy planning – 4.4.4 Energy Baseline 4.4.4 Energy baseline • The energy baseline shall be established using the information in the initial energy review • A data period suitable to the organization’s energy use should be considered. • Changes in energy performance of the organization shall be measured against the energy baseline. • Adjustments to the baseline shall be made when Energy Performance Indicators (EnPIs) no longer reflect organizational energy use; • there have been major changes to the process, operational patterns, or energy systems; or according to a predetermined method • The energy baseline shall be maintained and recorded.

45. Energy Aspect Review

46. 4.4 Energy planning – 4.4.5 Performance Indicators 4.4.5 Energy performance indicators • The organization shall identify EnPIs appropriate for monitoring and measuring energy performance. • The methodology for determining and updating the EnPIs shall be recorded and regularly reviewed. • EnPIs shall be reviewed and compared to the energy baseline on a regular basis.

47. 4.4 Energy planning – 4.4.6 Objectives & Targets 4.4.6 Objectives & targets • The organization shall establish, implement and maintain documented energy objectives and targets at the relevant functions, levels, processes or facilities within the organization. • The energy objectives and targets shall be specific measurable. • Time frames shall be established for achievement of the objectives and targets. • The objectives and targets shall be consistent with the energy policy. • Targets shall be consistent with the objectives.

48. 4.4 Energy planning – 4.4.6 Objectives & Targets • When establishing and reviewing objectives and targets an organization shall take into account • Legal and other requirements, • Significant energy uses, • Opportunities to improve energy performance as identified in the energy • Financial, operational and business conditions, • Technological options, and the views of interested parties.

49. 4.4 Energy planning – 4.4.6 Action Plans • The organization shall establish, implement, and maintain energy management action plans for achieving its objectives and targets. • The energy management action plans shall include: • designation of responsibility; • the means and time frame by which individual targets are to be achieved; • a statement of the method by which an improvement in energy performance shall be verified; • a statement of the method of verifying the results of the action plan. • The energy management action plans shall be documented, and updated at defined intervals.

50. 4. ENERGY MANAGEMENT SYSTEM