Energy Savings - How Much Could a Company Save?

Published on Sunday, 11 September 2016 00:40:06    Written by Marc
This is a recurring topic. We are often asked approximately how much energy could possibly be saved in various buildings, with the assumption that we could perform all of the energy-saving measures available for the building.

It is an interesting question. First, it helps to establish a goal, a target to reach. It also raises the questions of, "Where do we want to go from here?" and, "How far can we really go?" Finally, it assists in deciding on whether to commit resources and how much. Logically, would it make sense to assign resources if the potential savings is less than the cost of the resources dedicated to finding such savings?

The first thing managers/leaders want to see is a return on investment, including the energy-saving measures and the human hours invested in developing an energy-saving process, finding potential energy-saving measures, and finally, the entire project planning, implementation, and progress tracking.

Asking about the amount of potential energy savings is a fundamental question to get things started; however, to answer that question is more complicated than it seems. The first part of the answer is the universal, "It depends."

In order to answer the question, we need to first analyze what can influence the results.

Let us examine a building. Let us suppose it is a high rise office tower; although, this can apply to virtually any type of building. And now, let us look at what can influence the amount of potential energy savings that is in that building, and we put them in a list here, in no particular order of importance.

1. Size
2. Age
3. Type
4. Condition
5. Location
6. Operation
7. Equipment
8. Maintenance
9. Past projects
10. Occupation

These are the ten most influential elements when determining how much energy savings remain in a building. As we can see, the list of items is fairly long. When we take into consideration the fact that they also relate to each other, we rapidly understand why each building has a unique energy-saving potential, and no two buildings, even buildings which may appear very similar will have different potential for energy savings.

For a building owner or manager, getting a clear answer of how much energy savings is possible might appear frustrating at this point. If the only way possible, to get a valid number, is to go out and conduct (pay for) detailed audits with load calculations for each building, it may feel like a gamble since you do not know in advance the potential energy savings.

So how could a building owner or manager establish any objective in this situation?

There a few possibilities. Most people will start with benchmarking their buildings against other buildings in the same industry. For example, a high rise office tower manager might benchmark his/her building against other high rise office towers of same size and located in the same region. This will give an idea of where his/her building stands compared to others.

But unfortunately, benchmarking rapidly falls short of providing clear answers. Because of the numerous factors that influence the energy saving potential of buildings, simply doing benchmarking will only give a very rough estimate, sometimes even too rough to take any action. Worst, some building managers might look at a benchmarking comparison chart and conclude that their building is better than the industry and therefore does not have much energy saving potential left.

Problem is, there is often a disconnect between which buildings are the most efficient (or look to be on surface) and how much energy-saving potential there is still left in the building. Some buildings might appear to be very efficient, and still have the most potential for savings, while other buildings might appear to be less-than-efficient and have virtually no potential for savings. A key point to remember is that benchmarking is a tool and not something that should be utilized without other measurements.

The good news is that, in reality, you do not need to do load calculations to get a rough estimate of potential savings. What most building managers do us to take their total energy costs and apply a percentage (e.g. 15 percent).

While that number might seem that it came out of nowhere (and it often does), it is a number that most companies achieve with relatively minimum effort. Unless the company’s buildings are brand new, chances are that there is a minimum of 15 percent of untapped potential energy savings. That number helps determine if it is worth to invest human resources to start implementing an energy-saving process and look for potential energy-saving measures.

It is interesting that many companies that start out with this number will find themselves increasing it in a year or two. It is not uncommon for companies to raise the target to 20 or 25 percent and still surpass their target. The more energy-saving measures and projects they do, the more comfortable they get in doing new (different) measures. In addition, the more success they have in the company with their savings, the easier it gets for management to approve funding. Now it is the chicken-and-egg story in full running mode. The more chickens we have, the more eggs they lay, which ends up producing even more chickens.

One of the questions we have not yet addressed, here, is how much human resources are normally needed to find, implement, and then track energy-saving measures. The answer depends on how the company wants to operate. If the company wants to outsource everything to consultants, the internal resources can be minimal.

Depending on the number of business units a company has and their location, it might dedicate one person part-time (one or two days a week) or full-time. If the company wants to do all the work in-house (finding, estimating, and implementing energy-saving measures), then it might need an entire team of full-time employees.

Most companies normally opts for something in the middle. They have some internal resources find energy-saving measures and then outsource the physical implementation work to external contractors. For example, if a project calls for replacing lights, the internal resources would do the energy-saving estimates themselves and then hire contractors to replace the lights. In this case, the company only needs to have a small team (one or two people) in charge of energy. With proper software tools, it is possible for the internal team to find and estimate all energy savings themselves. This also insures that they are in control of the process, not an external consultant or contractor.

In summary, the process could be enumerated in only a few steps.

1. Establish a conservative target. Fifteen percent is normally what companies use to start

2. If 15% of your total energy cost represents an amount sufficient to dedicate some human resources to energy savings, then it is worth it.

At Almiranta we created an online (and free) calculator to help companies get a first estimate of just how much energy they could potentially save. While simple to operate, the tool actually performs a substantial amount of calculations that take into consideration a number of factors, which influence the potential for energy savings. The calculator is available here at:

3. Once the company starts to get more comfortable with doing energy-saving measures, it can increase the target for savings.