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Understand Shared Energy Savings

May 8, 2017
Attempts to implement a shared approach provide some important insights

How often have you been approached by a vendor offering to analyze your energy usage and fund projects with shared energy savings? Do you believe what it is offering? How do you know? Who gets to check the data?

Jake ran a tight ship with his energy usage. Years of experience taught him that energy conservation and energy projects ran in cycles. These cycles also taught him to beware of vendors offering a free energy survey and funding for part of the savings project.


Jake had learned that watching the energy dial meant more than just putting in projects — it meant day-in, day-out monitoring and checking data. Projects began with an intense discovery phase where everyone responded to a need to conserve. This could take up to a year to find energy losses, implement the savings project and monitor to make sure goals were met. The second and the third year were for claiming the savings while continuing to monitor. By then, enthusiasm would wane and people went on to other projects and other work. In the fourth year, energy savings started to slip and by the fifth or sixth year, that area was ready for another energy survey. One of Jake’s colleagues stated often that “had we saved all the energy we have claimed over the years we would be a net exporter of energy.”

Jake had seen areas that had been neglected yield 10–15% savings just by monitoring and providing proper operation. He also observed game-changing discoveries and design-error corrections make major shifts in energy usage.

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So, it wasn’t a surprise when his boss called him in to his office one day. “Jake, the new plant manager has a brother-in-law who also is in the energy business. He would like for us to host him for an energy survey, just to get another set of eyes on our operation.”

Jake’s first reaction was annoyance but he put that aside. “What is the catch?”

His boss replied, “He gets a cut of whatever energy savings he can find!”

“Who decides what we save?” asked Jake.

“Don’t know, I was hoping you could work that out, Jake.”

Jake did work it out with a detailed plan that considered what had been done before and what their plant was willing to share as far as process information. They agreed on shared savings for new ideas and how the data would be collected and saved before any decision was made and any work started. As it turned out, Jake could use the help, and the savings identified by the outside firm were legitimate and achieved.

Later in Jake’s career, his company decided to sell energy services to other firms, and asked Jake to assist with the venture. He approached it with a lot of excitement. After being on the receiving end, he thought he could bring a good perspective to the company’s offering.

Jake’s company approached another large corporation and offered its services in modeling distillation columns for energy savings and tighter control. The corporation provided details of its operation and asked for a model. Because this was the first engagement, Jake’s company developed the model, although a sale wasn’t yet in the bag. His firm then asked for a sample of data to test the model and prepare a savings proposal. The data supplied seemed at first to show some potential, but it soon became obvious that the compilation of data included both high reflux ratios and low energy consumption intermixed. When asked about the data, the client seemed not to understand. Jake’s company chalked it up to learning the business and moved on to another client.

So some key takeaways from all of this:

If you are the buyer, know your own process. Sometimes the main benefit you get is to identify things you haven’t yet considered. Sometimes resources are tight and another set of eyes may help. Recognize that a 10–15% savings may be achievable with a little effort on your part without outside assistance. Know your limitations as far as sharing data. Are they confidential? Who is the guardian of the data? How are disputes over accuracy and results settled?

If you’re the provider, learn your customer’s process or system. Make sure you’re providing what they need. Cross check the accuracy of the data and how they are collected. Communicate often as that is the only way to avoid misunderstandings. Ask questions.

Earl M. Clark, PE, – Engineering Manager, Global Energy Services. Clark retired from DuPont after a career of 39 years and 11 months and joined Hudson’s Global Energy Systems Group as Engineering Manager. During his over 43 years in the industry, he has worked in nearly all aspects of the energy field; building, operating and troubleshooting energy facilities for DuPont. He began his energy career with Duke Power and Clemson University during the energy crisis in the 1970s.

Active in both, the American Society of Mechanical Engineers and the American Society of Heating, Ventilating, Refrigerating, and Air-Conditioning Engineers (ASHRAE), Clark was chairman of ASHRAE's task group on Halocarbon Emissions and served on the committee that created ASHRAE SPG3 - Guideline for Reducing Halocarbon Emissions. He has written numerous papers on CFC alternatives and retrofitting CFC chillers. He was awarded a U.S. patent on a method for reducing emissions from refrigeration equipment. He has served as technical resource for several others.

You can email him at [email protected]

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