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Business Case For Building Energy Management Software (Report and Online Toolkit)

Date: 04 March 2014

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24 pages, 12 Figures 

EXECUTIVE SUMMARY

During the last five years, new energy management software solutions have launched to help corporates manage their energy consumption, costs and impact on the environment. Until now, dispersed ownership and a lack of urgency has damped down demand for a technology-enabled energy management strategy. But rising energy costs and pressure to disclose sustainability data, combined with advances in controls and software, have increased the number of firms considering investing in energy management. Managers in energy, EH&S, facilities, real estate and sustainability roles need to model future energy and reporting costs, potential savings opportunities, and software investment costs when assessing the business case for building energy management software. Verdantix has developed a business case toolkit to quantify the tangible financial benefits of investing in energy management software. This report explains in more detail the premise behind the toolkit and some of the additional benefits that may arise from investing in energy management software. These include carbon risk management and accounting, CAPEX and OPEX savings, and maintenance and employee utilization.

TABLE OF CONTENTS

WHY INVEST IN BUILDING ENERGY MANAGEMENT SOFTWARE?

Building Energy Management Software Has Three Core Usage Scenarios
Cost Savings Are The Strongest Investment Driver
Indirect Financial Benefits Are ‘Nice To Have’ But Not Yet Fully Appreciated
Lack Of Ownership Of The Energy Problem Stunts Demand

ASSESSING THE FINANCIAL BENEFITS OF BUILDING ENERGY MANAGEMENT SOFTWARE

Modelling The Energy Reduction To Calculate Energy Efficiency Savings
Assessing The Financial Returns From Energy Data Management And Analysis

COMMUNICATING THE FINANCIAL BENEFITS OF BUILDING ENERGY MANAGEMENT SOFTWARE

Investments Generate Positive Returns Across Six Scenarios
Customers Need To Look Beyond Financial Returns

ENERGY MANAGEMENT SOFTWARE WILL BECOME A DAY-TO-DAY OPERATIONAL BUSINESS MANAGEMENT SYSTEM

TABLE OF FIGURES

FIGURE 1. Hypothetical Firm Software Implementation Data
FIGURE 2. BAU Energy Costs Vs. Energy Costs With Software
FIGURE 3. Energy Optimization Savings By Category
FIGURE 4. Reduction In Y-o-Y Savings Due To Software By Category
FIGURE 5. Supply Side Energy Management Savings From Software
FIGURE 6. Total Carbon And Energy Reporting Costs With And Without Software
FIGURE 7. Savings Capturing Data At The Utility Bill Level
FIGURE 8. Savings Capturing Data At The Utility Meter Level
FIGURE 9. Savings Capturing Data At The Sub-Meter Level
Figure 10. Financial Returns From Building Energy Management Software
Figure 11. Payback Period Is Just Over Two Years For Base Case Implementation
Figure 12. An Energy Efficiency Programme That Is Not Actively Managed

ORGANIZATIONS MENTIONED

BuildingIQ, CA Technologies, CDP, Cisco, Dexma Technologies, Dimension Data, Elster EnergyICT, EnerNOC, Global Reporting Initiative, GridPoint, IBM, Johnson Controls, JouleX, Marks & Spencer, Microsoft, Missouri State University, National Renewable Energy Laboratory, Panoramic Power, Resource Data Management, Schneider Electric, Siemens, TEAM, Teradyne Corporation, Unilever, US Department of Energy, US Energy Information Administration, Westcor