Leadership in Energy Management: ISO 50001 and Superior Energy Performance

The International Standards Organization (ISO) 50001 Energy Management Standard has the potential to influence up to 60 percent of global energy use.  Slated for a mid-2011 release, ISO 50001 offers a standardized framework by which a diversity of facilities – industrial, commercial and institutional – can establish validated policies and procedures to manage energy use.  

Compliance with the ISO 50001 Standard is also the core element of Superior Energy Performance (SEP), an industry-led certification program that is accredited by the American National Standards Institute (ANSI).  The SEP program will enable industrial and commercial facilities to achieve continual improvement toward energy efficiency, as will Global Superior Energy Performance (GSEP), the international counterpart of SEP. Currently in a demonstration phase in a few U.S. regions, SEP provides a transparent, uniform system for verifying energy performance improvements and management practices. It is expected to launch nationwide in October 2011.

Alliance’s Efficient Enterprises Series Features SEP

On Dec. 8, the Alliance hosted Superior Energy Performance: Leadership in Energy Management, its ninth Capitol Hill briefing as part of the Efficient Enterprises series.  The event gathered industrial stakeholders who have been intimately involved in the development of the ISO 50001 Standard and SEP, as well as industry representatives who have piloted SEP in their own plants.   

Panelists discussed the development and deployment schedules of the ISO 50001 Standard, its market value, and the results of the first SEP pilot projects in Texas.

More Than 50 Countries Involved in Developing ISO 50001

Bill Meffert, senior research engineer with the Enterprise Innovation Institute at Georgia Institute of Technology offered a detailed overview of the ISO 50001 Standard and insights into the ISO development process.  

Fifty-four countries – 12 with observer status – are actively participating in the ISO Technical Committee 242 (TC 242), which is responsible for developing the recently approved Draft ISO 50001 Standard.   Pending final draft status, the ISO 50001 Standard will be subject to a majority vote by the full ISO membership before it is officially released as ISO 50001.

Market Value of ISO 50001

Ken Hamilton, director of Critical Facilities Services at Hewlett Packard (HP), discussed the market value of ISO 50001.  Ken stated that for large multinationals such as HP, which is present in 150 countries worldwide, large-scale energy initiatives need to be applicable across international borders. He also asserted that a robust global standard will help validate energy management practices among leading manufacturers. According to Hamilton, such a global standard would provide the basis for recognition of energy efficiency improvements, which can be communicated internally and to vendors, customers, shareholders and the public.

Hamilton went on to say that ISO 50001 provides the necessary flexibility for manufacturers to integrate energy management into existing key performance indicators, which can vary greatly by company and subsector.  This approach will enable manufacturers to implement ISO 50001 without disrupting or reestablishing preexisting performance metrics.

Effective energy management addresses the human elements of energy efficiency: process control, system optimization and equipment maintenance.  These elements are often overlooked in favor of capital equipment purchases, Hamilton added.

Dow: Enhancing Operations with Energy Management

The development of both ISO 50001 and SEP benefited from strong industry leadership.  Fred Fendt, an Energy Efficiency and Conservation team leader, spoke on behalf of Dow Chemical Company on the extent to which energy management enhances their operations.

“Dow chemical is among the world’s most energy-intensive companies,” stated Fendt, “so managing energy has a direct impact on our bottom line.”

Since 1990 Dow has reduced its own energy intensity by more than 38 percent, representing an estimated $9 billion in energy cost savings.  Fendt explained that effective energy efficiency strategies need to touch four primary components of energy use: procurement, conversion, distribution and consumption.  Fendt lauded ISO 50001 as a comprehensive framework that is flexible, while maintaining the rigor necessary to ensure verified energy efficiency gains on a continuous basis.

SEP Pilot Project

Deborah Magoon, director of Integrated Management Systems for Cook Composites and Polymers (CCP) rounded out the panel by discussing CCP’s experience in implementing the SEP pilot project in its Houston, Texas facility.  Magoon, a former plant manager with more than 20 years of hands-on experience, testified to the effectiveness of the energy management approach employed by SEP, reporting that CCP reduced energy consumption during the pilot by 15 percent without any capital investment.   By engaging all levels of CCP staff to optimize process energy use and equipment operation, CCP unlocked efficiencies in its manufacturing process that would have otherwise gone unnoticed.

“Our executive management has really embraced the value of energy management,” said Magoon. “Despite facing reductions in sales over 2008 and 2009, CCP has remained in the black, largely due to significant cost cutting in energy expenditures made possible by our energy efficiency efforts.”

On Dec. 9, at the World Energy Engineering Congress, Magoon and CCP were recognized among three Texas plants as the first U.S. facilities to be certified under the Superior Energy Performance program. 

The panel presentations were followed by a robust Q&A session. 

Below are select questions and answers that offered key insights on ISO 50001 and SEP deployment:

Q: What policies should be enacted to enable SEP and ISO 50001 adoption?

A: Meffert: Policymakers need to ensure that participants in programs like SEP and adopters of the ISO 50001 are recognized for these efforts and that they are supported by a third party to administer the program. Government agencies can also adopt ISO 50001 and SEP. Policymakers also need to reduce or eliminate the counter points [policies] between energy efficiency policy and environmental or health or safety policies.

Q: What are the main barriers to SEP uptake (e.g., cost)?

A: Meffert: The availability of people to serve as certified practitioners and the ability of people in the plants to dedicate time toward compliance and performance improvements will need attention.

Q: Could you speak to adoption among Small and Medium Enterprises (SMEs)? Is the ISO 50001 Standard adaptable for SMEs?

A: Meffert: ISO 50001 is complex yet flexible enough to drive the right behaviors using varying metrics but also stringent enough to ensure uniformity. The complexity pays off, thanks to the intensive work behind the detailed baseline computations, the data is verifiable. While the implementation takes time and travel, the direct costs are nil.

Magoon: CCP reaped 100 percent returns on the implementation of ISO 50001 and ANSI/MSE 2000:2008. There is a human resources issue – not enough expertise on staff; need to find and train more skilled people. Sometimes behavioral changes and corporate cultures are overlooked; they are always evolving and do contribute to the effectiveness of energy management programs.

Q: Thoughts on the universal acceptance of ISO 50001? Will it be universally welcomed?

A: Fendt: Not necessarily; ISO 50001 will really only gain traction among those who see energy management as important and whose incremental energy costs are large enough to gain notice.  Those for whom energy costs are more peripheral are not likely to implement the standard.

Throughout 2011 the Alliance will continue to host Capitol Hill briefings focused on U.S. industrial energy efficiency as part of our Efficient Enterprises series.  These programs will include subject-matter experts from industry, academia and government to share various viewpoints on featured topics.  Each event will be scheduled and announced individually.  Efficient Enterprises briefings are free and open to the public.  For additional information, contact Paul Bostrom (pbostrom@ase.org).