South Africa's energy challenges have ensured that efficient energy use is a priority for most organisations. But how do companies respond to an issue that has a multitude of facets, many of which are in conflict? The answer may lie in effective facilities management.
The effects of global warming are already visible in South Africa, with three of our nine provinces experiencing severe drought. If that’s not enough incentive to use energy more effectively, the true cost of improper usage sheds light on the issue: energy costs typically account for as much as 30-50% of operating costs for commercial and industrial buildings. Moreover, cutting energy costs by 20% has the same impact on the bottom line as a 5% increase in sales. As Lisa Shaw of Cushman Wakefield Excellerate points out, “Failure to manage energy costs may have a serious impact on the profitability of the business.”
The problem, she adds, is that the complex nature of commercial property spaces, not to mention their size, the ever changing environment and tenant movement, makes energy management a complicated task, as these inevitably impact on energy usage profiles and demand requirements. Seasonal weather changes, technology, and the dynamics of the business and its surrounding community – as well as social and political trends – can also have an impact on energy requirements.
“Against this backdrop, organisations need to be able to identify, anticipate and respond to daily changes, while managing and controlling energy usage and costs,” Shaw points out. This highlights the need for involvement at the highest organisational levels: “Energy management must be a key consideration in strategic and operational planning at senior levels,” she insists.
The problem, however, is that many organisations follow a siloed approach across line functions, so that the company’s facilities management and sustainability teams remain unaware of the undertakings of various teams. This has an unavoidable impact on energy costs, with a knock-on effect on cross-functional planning and budgeting. At the same time, if maintenance planning and capex projects are not shared with the sustainability plans of the sustainability team, the two silos may inadvertently work against each other.
Shaw gives the following example: “Imagine that the sustainability team has set an objective of reducing energy usage by 10% over the next two years, based on a plan of business as usual. However, the business has developed an IT strategy, which requires the IT team to build a new data centre.
“This hypothetical situation emphasises the need for energy management to be integrated into core facilities management functions, as well as overall business planning at a strategic and operational level,” she reiterates, noting that this is the rationale behind Excellerate Facilities Management’s recently launched project to integrate energy management into standard operating practice. The project has also seen the incorporation of ISO and SANS standards to ensure better energy reporting and management.
The benefits of an integrated approach are clear: without it, even the most costly building management system is hampered in its ability to deliver, while the multiple meters and measuring devices often employed by companies continue to focus on a single load, creating a limited perspective. Furthermore, operating costs are driven up by poorly coordinated capex and opex maintenance projects, along with energy costs. This affects profitability, while increasing wastage.
Of course, there are small steps that organisations can – and should – take on a daily basis to limit energy usage, from installing sensors to clearly labelling lights to limit wastage. Added to this, the range of sophisticated tools aimed at enhancing energy efficiency is growing at a rapid pace: “We are seeing a holistic approach, which incorporates water and waste, and a move to a circular economy, where the outputs or waste product from one cycle are used as inputs for the next,” Shaw informs.
“Too often, the perception is that energy efficiency requires major capital replacement programmes, which are extremely costly. While this may be true for older buildings, significant energy cost savings can frequently be unlocked through very simple, low-cost interventions which hinge on nothing more than good housekeeping – strengthening our argument for integrating facilities management and energy management functions,” Shaw concludes.