Improving Productivity through Energy Management

For every $1 of energy cost saved, a typical US business would have to make $10 worth of extra sales to make the same additional profit.

Energy costs will continue to rise. (Of course they will fluctuate over time but the overall trend is upwards.) This means that energy is likely to become an increasing burden and an increasing proportion of total costs. If energy costs are not important to you now … just wait!

All energy usage involves waste. We all know about hot pipes producing warm spaces but waste occurs throughout all energy systems. The best systems use measures to minimise this waste but it occurs nevertheless. This waste reduces your business profits. All businesses should be striving to ensure that the percentage of energy that is wasted is as small as it can practicably be.

Energy usage, as we know, also contributes to CO2 emissions. The regulatory regime relating to carbon emissions will get tougher …. So, as part of your energy management activity, it makes sense to address your ‘carbon footprint’ … though the main reason is to save money and increase profit!

So, how do we set about establishing an energy management strategy … that works!


The first stage is to commit! All approaches to business improvement suggest that commitment from top management is crucial … because it is. Managers have to commit if they expect otherwise to commit. So …

· establish a policy which you mean – and share that policy widely

· make a senior manager the ‘energy champion’

· add energy management to the agenda for key meetings.


The sayings “You get what you measure” and “What gets measured, gets done” reflect a universal truth. If staff know their results in certain directions are measured and noted, they are much more likely to strive to move those measures in the right direction. So, find out what measures you currently have (and are not using) and then work out what measures you need to:

· Understand where your significant energy costs are incurred

· Identify unexpected or exceptional usage

· Benchmark usage and costs against previous years

· Compare usage and costs across different sites, plants or offices

When you decide what measures you need, construct a plan to make them available and to make sure they are presented regularly and in easily-accessible and understandable form.

Shop around

Energy costs do vary from different suppliers and with different tariffs from the same supplier. Find out if you can buy and/or use fuel at times which make it cheaper. Similarly, work out if your pattern of business creates peak energy demands which affect what you pay.

Consider alternative forms of energy

Is it technically and financially feasible to use fuels or energy sources that can reduce your liability to pay the Climate Change Levy. These would include renewable energy sources and, where sufficient heat demand exists, Combined Heat and Power systems.

Walk the Talk

Make senior – and middle – managers take a regular ‘energy walk’ around the parts of the business for which they are responsible … to see what happens ‘on the ground’ (as distinct from on the plan) and identify energy management issues or opportunities. Do this at different times of the day and week so that you see things which happen occasionally.


Combine all the above (having taken external advice and help if appropriate) into an energy management strategy and action plan with clear targets and with clear processes for execution, monitoring and review … especially checking your (lower) energy costs!


Productivity is my 'bag' ... it is what I know about. I am President of the World Confederation of Productivity Science - and Director of the National Productivity Centre in the UK - go to this site for some good free resources and some (paid for but low price) e-learning on productivity. I also edit the International Journal of Productivity & Performance Management. My views on productivity and on learning (which I think are related) are su...

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