Experts Agree Energy Efficiency Pays for Businesses
ENTERPRISES gain many benefits from energy efficiency measures making any investment well and truly worth it industry experts said at a conference at the University of Michigan, U.S.
Experts highlighted that a better understanding of how to quantify savings needs to be addressed, as this is delaying energy efficiency investments. Seth Roberts, director of energy and climate change policy for Dow Chemical Company explained:
"Efficiency pays, but you need to be able to define it in economic terms and say that I've got a great project that has a net value of $25 million and it's only going to require a certain investment of "x.' So we start activating the financial mechanisms in the company, whether we have an investment fund or not."
The conference, primarily focusing on clean energy but with sessions on energy efficiency, was hosted by several groups focused on sustainability including the U.S. Department of Energy's Office of Energy Efficiency and Renewable Energy, the Michigan Economic Development Corporation, the Michigan Memorial Phoenix Institute and UM's School of Natural Resources and the Environment and the Erb Institute.
Kenneth Ostrowski, director of McKinsey and Company said corporate stakeholders need to realise that any energy waste needs to be addressed, "The performance system has yet to figure out how to translate the technical expertise into financial terms, and what it actually means in terms of an execution plan, to give people confidence that what's being invested will be tracked and monitored."
He added that companies underestimate the size and potential for energy saving within their operations.
"I have not yet found a situation where we saw an industrial company, committed to looking at a large-scale improvement program, come up empty," Ostrowski observed. "We hear example after example of companies that identify five, 10, 15 percent reductions in their energy [costs] when they put a concerted approach to it."
Roberts agreed with other experts at the conference that the U.S. lags behind much of the world: "I think we still lack a comprehensive national energy policy. I just spent five years in Europe, and there is definitely a difference in their efficiency mindset."
Ostrowski commented: "We've been referred to as the Saudi Arabia of energy efficiency. Lower cost energy is an inducement to not be as wise in conserving it, which probably has much to do with our supersizing technology, our homes are getting larger, our vehicles are larger and we have larger TVs. Everything we do is done on a large scale, and that in itself can add to being counterproductive."
Picture of Michigan University by Bernt Rostad
Monday 25th April 2011