Plans and operations regarding energy production and energy consumption units, as well as energy distribution and storage are included in “Energy Management”. The main objectives of Energy Management to SMEs are climate protection by optimizing and reducing the consumption of energy, cost savings and resource conservation, without limiting the access to the needed energy for the user. It is connected closely to environmental management, production management, logistics and other established business functions.
The economic dimension is included by the following VDI-Guideline 4602 definition: “Energy management is the proactive, organized and systematic coordination of procurement, conversion, distribution and use of energy to meet the requirements, taking into account environmental and economic objectives”. It is a systematic endeavour to optimize energy efficiency for specific political, economic, and environmental objectives through Engineering and Management techniques.
3.1.Energy Management Process
Energy management is the process of tracking and optimizing energy consumption from all business processes (incl. related devices, equipment to conserve usage in the premises where a company/ organization operates).
There are certain steps that a company shall follow to manage its energy consumption and use:
- Collecting and analysing continuous data related to energy consumption.
- Identify optimizations in equipment schedules, set points and flow rates to improve energy efficiency.
- Calculate return on investment. Units of energy saved can be metered and calculated just like units of energy delivered.
- Implement executive Energy optimization solutions.
- Repeat step two to continue optimizing energy efficiency.
3.2. SMEs Statistics on Energy Management
EU SMEs, due to low financial and operational capacity, have less technical human and financial resources. As a result, they have a lot of barriers in their effort to improve their energy efficiency, such as lack of awareness, low capital, difficulty to access financing, doubts around actual saving potential and the lack of technical human resources. There are national schemes trying to provide SMEs with technical resources (e.g., methodologies, best practices, technologies inventories and subsidies). Some of them require mandatory actions (energy analysis) to obtain such subsidies.
Improved energy efficiency is a major measure in climate change mitigation, as well as a crucial component for individual companies, to maintain and improve competitiveness. Energy Services are an often-stated promising means to deliver high improvement impact on energy efficiency. Energy services has mostly been targeted towards the building sector where often measures are similar across many buildings in a building stock, minimizing transaction costs in the procurement phase of an energy service contract. Less attention has been paid towards energy services in the industrial sector and even more so, for industrial SMEs.
On their own, SMEs don’t consume huge amounts of energy. But, taking under consideration that they represent about 99% of the business worldwide, their collective energy demand is a different story. The IEA (International Energy Agency) estimates indicate that around 13% of total global energy demand (that’s 74 exajoules for those keeping track) is consumed by SMEs. About 30% of SME energy demand could be eliminated by cost-effective energy efficiency measures, such as energy management software – that would save more energy than Japan and Korea consume in a year. Energy efficiency can also help the SMEs themselves. Cutting costs and allowing resources to be invested in more productive and profitable activities and make the company more competitive, innovative, and resilient. According to the IEA, “energy efficiency can deliver a wide range of other growth benefits […] for example by improving productivity and product quality. Energy efficiency in SMEs can also contribute to […] reducing reliance on energy imports and the need for investments in additional generation capacity, and lowering environmental impacts, such as GHG emissions and local air pollution.”. So, it’s clear that there are thousands of industrial processes, millions of SMEs and countless ways in which energy efficiency projects can be designed and implemented.
The European Commission’s Winter Package and the 2018 review of the EU energy efficiency directive have increased the target energy efficiency improvement to at least 32.5% by 2030. As such, energy audits targeting SMEs could unlock incredible energy savings potential in Europe. Yet, if SMEs implemented energy efficiency measures to their full potential, they could shave more than 20% off their energy bills. And that is something SMEs in Europe and beyond simply can’t afford NOT to do, especially after the economic crisis that seems to follow the after-pandemic era.