Building on the Foundations of ISO 50001 for Greater Energy Efficiency

The new International Standard requires an Energy Management System to be effective.

Around the world, an increasing number of countries are implementing more stringent and more urgent regulations related to energy use and greenhouse gas (GHG) emissions. The European Union’s 20-20-20 Initiative looks to energy efficiency as a key pillar in reducing GHG emissions by 20 percent by 2020 based on 1990 levels. Russia has announced new 2020 energy efficiency objectives based on GDP. Canada, Singapore, India, the US and dozens of other countries have put increasingly aggressive goals in place.

In the corporate world, the trend is equally clear, as more and more companies are taking a proactive approach to energy efficiency, looking at energy management as a way to slash operating costs as well as a means to stay on the right side of escalating current — and future — regulatory actions. Corporate responsibility reporting has become common business practice and is now carried out by 71 percent of the 100 largest companies in 41 countries, according to KPMG’s 2013 “Survey of Corporate Responsibility Reporting,” which also found that 93 percent of the world’s largest 250 companies published a sustainability report in 2012.

The International Organization for Standardization has made a valuable and timely contribution toward increasing the dialog around and advancing energy efficiency efforts in the global manufacturing sector with the publication of ISO Standard 50001 for energy management systems (EnMS), giving organizations a rock solid foundation on which to build their own EnMS. For those organizations that have not yet fully implemented an energy management system but are aware they must, ISO 50001 offers a welcome starting point. It provides tremendous impetus for a process which many have found too difficult to get off the ground, one which can often be mired in the planning and analysis stages for months or even years without gaining significant traction.

A good first step

Based on best-practice management systems, ISO 50001 offers companies a useful framework that consists of four steps: 1) Plan. 2) Do. 3) Check. 4) Act. It is a continuous improvement model that promotes incremental change. However, for companies that want to achieve energy management excellence and go a step beyond the improvements afforded by ISO 50001, it is necessary to put in place a system that delivers measurable results on particular targets. Every industry, every organization will have specific, individual needs that are hard to address with a general international standard. The state of the facilities, company culture, production methods, fuel mix, and manufactured goods vary widely from company to company. That means organizations have to put in place their own goals and metrics in order to produce realistic and meaningful energy efficiency measurements. Implementing the changes needed to achieve this requires a robust energy management system that builds on the ISO 50001 foundations.

Achieving the standard…

ISO 50001 is meant to provide organizations with the framework for adopting an effective energy management system. However, it does not provide the specifics on how to effectively manage energy performance and sustain it over time. ISO 50001 recommends that organizations establish energy objectives and targets in alignment with legal requirements but leaves it up to each organization to determine how aggressive these objectives and targets should be. This does not push organizations to set goals that will challenge them to continuously improve. Obtaining ISO 50001 certification therefore does not guarantee that organizations will achieve expected energy cost savings or a reduction in their energy consumption. Many will still face the challenge of not knowing what to do to improve their energy performance and achieve the desired results.

Having seen first hand in its own operations the billions of dollars that can be reclaimed from effectively managing energy performance, DuPont is certainly among those advocating instituting an energy management system to manage energy costs, reduce GHG emissions and generate desired business results. For DuPont, energy management is strategic. Since 1990, DuPont’s energy management system has saved the company more than $6 billion. In addition, DuPont is able to identify and reclaim at least 3 percent in energy savings every year with efforts that require minimal out-of-pocket investment. The company achieves this by prioritizing the right improvements and then swiftly carrying them out.

The DuPont Nutrition Biosciences site in Grindsted, Denmark, which obtained ISO 50001 certification in January 2013, is an example of an effective management system. With 500 employees, the Grindsted plant is the largest manufacturer of emulsifiers in the world. It runs many different energy intensive production lines on its 80,000 square meter site. The site had begun improving energy efficiency back in 1992. In 2004, it went on to obtain the Danish standard on energy management DS2403 and, in 2011, the European EN 16001 certification. This meant the site already had most of the processes and systems in place to obtain ISO 50001 certification. “We only had to review a few legal requirements and change some instructions on our IT system to be certified to ISO 50001,” the Grindsted site energy coordinator, Martin Østergaard, explains. That makes ISO 50001 certification sound easy, but it is only so if pre-existing energy management systems are in place, and the site is engaged and motivated to continuously improve energy performance.

… and taking it a step further

At Grindsted and elsewhere in the world, DuPont uses its energy management system to reduce its consumption of electricity and fresh water and output of steam and nitrogen.

In fact, Grindsted has achieved a reduction in steam consumption while more than doubling its output. In 1992-93 Grindsted produced 47,559 tons of product compared to 98,913 tons of product in 2014. In the same period, steam consumption dropped from 158,811 tons (a ratio of 3.31 tons of steam per ton of product) to 156,681 tons (a ratio of 1.584 tons steam per ton of product) in 2014. Over the same period, the ratio of electricity consumption to product output has also almost halved, going from 34,992 MWh (a ratio of 0.73 MWh per ton of product) in 1992-93 to 36,769 MWh in 2014 (a ratio of 0.37 MWh per ton of product).

The backbone of these efforts, no matter where they are implemented, is the manner in which DuPont developed the operational component of its own energy management system many years ago. Energy is strategic for DuPont. Cutting energy cost reduces the company’s overall operating cost.All levels of the organization are committed to energy saving goals, from the shop floor right through to senior leadership. The approach includes the implementation of processes for continuous improvement in energy efficiency. That is what makes the company so compatible with ISO 50001 requirements. A positive spin-off is that processes and equipment, which have been modified to be less energy intensive, also end up being more efficient.

But DuPont goes further than its energy management system. It has a far more comprehensive program that starts with multi-disciplinary, cross-functional work teams, including operators, maintenance people, mechanics, core process experts, energy experts, engineers and other on-site stakeholders with intimate knowledge of the equipment, process and functional situation. Using a proven, proprietary system, they meet regularly to analyze current processes and generate and study ideas for improvement, following a painstaking vetting process to identify and prioritize the 20 percent of improvement projects that are going to generally produce 80 percent of the savings; implement them; test them against the prior state; and if proven worthy, roll them out as a new standard. Throughout DuPont, literally hundreds of improvement projects led by teams like these may be under way at any one time. Establishing each of them properly on site is critical to success.

Management commitment is essential

The first specific requirement of ISO 50001, at 4.2.1, is management responsibility. For instance, the standard recommends organizations establish energy policies, assign a representative for managing energy, establish energy teams, and provide resources to establish, implement, maintain and improve the EnMS and the resulting energy performance. In the DuPont experience, the demonstrated commitment of top management to the energy efficiency efforts of the organization is the number one test as to whether the effort will succeed or fail.

While, no leadership will say “I’m not committed to energy efficiency,” the level of commitment and support by senior management to the organization’s energy management system can be gauged by their behavior, including the way they communicate energy performance (objectives, results and initiatives) and how they engage and motivate their employees to look for opportunities to reduce energy waste. Does the CEO sign off on the energy efficiency investments proposed? Does the CEO proudly attend the organization’s energy related events? And, most importantly, can and will the CEO take such tough decisions as pulling resources away from implementing other projects in production or quality to engage them in an energy efficiency project that has high priority and will deliver longer term benefits?

Certainly, a key issue faced when implementing an energy management system in the real world is managing the challenge of conflicting business priorities. While energy strategies indisputably enhance business strategies in the long term, they can and often do hamstring them in the short term. Fortunately, experience and perspective can help meet this challenge.

Achieving energy cost savings and sustaining them is only possible with the help of an effective energy management system. The ISO 50001 standard is a good first step as it provides the framework for the energy management system. Organizations have to take this framework and execute it in a way that delivers expected results, so that they can go beyond having a paper certificate.