Energy Policy and Your Business: Prepare Now for Change
By Jim Poad, Director of Client Solutions, Advantage IQ
National climate and energy policy has been batted around for the last several years. In 2009, Obama introduced a plan to cap carbon emissions and spend $15 billion on R&D in the clean energy space, but it was met with heated resistance.
In early 2010 legislators went back to the drawing board, and created a new draft of an energy bill. Very little has been disclosed about the contents of the bill. However, we do know that it aims for a 17 percent reduction of 2005's levels of climate-altering gases by 2020. Further details of the bill had not been released when this article went to publication.
So why should hoteliers prepare themselves for effects of climate legislation sight unseen? Even without knowing the bills exact stipulations, we can be sure of two things.
Policy change will happen. Whether it's one year from now or 10, the U.S. will implement some sort of energy policy to keep pace with and set standards for global climate policy.
When it changes, energy will cost more. You can't reduce emissions by 17 percent without targeting the country's biggest contributors: the energy industry. And emissions-reducing innovation costs money, whether it's achieved by finding new energy sources or giving the old ones a facelift. Those costs will be passed through to businesses.
It's difficult to predict further effects of the latest iteration of the energy bill, but one thing's for sure. Hoteliers should understand and analyze their energy consumption profile today, and determine what steps they need to take to prepare themselves for the day the bill becomes law.
Take a Reading on Your Hotel Energy Use
Data collection and analysis is the backbone of a business's energy profile. The elements of that profile include monthly electricity and natural gas consumption for one or more years, and the costs associated with those months, for every hotel in your portfolio. All of this information can be found in your utility bills-they're the key to an accurate and comprehensive profile.
You might be surprised how much you can learn about your business and each hotel you manage, when you examine a year's worth of consumption data. What you'll find is your energy benchmark: the starting point from which you'll gauge progress on the path toward greater energy efficiency. Without energy benchmarking, your energy management program might never be as well-designed or efficient as it could be.
Benchmarking gives you new, valuable insights by pinpointing the role energy consumption plays in overall operating costs, identifying the hotels that are the biggest energy consumers when data is normalized for weather and size of the building, and helping you set realistic goals for cutting usage and costs.
Because gathering 12 months worth of utility bills can be extremely time consuming, especially if you haven't kept great records, many businesses will use an energy management firm to take over the process of data collection and analysis. If you have multiple hotels to benchmark, I'd even say it's a must.
Leverage Your Energy Benchmarks
Now you know what energy is costing the business, which hotels are the biggest energy-wasting culprits, and how far you need to go to get your energy profile where you want it to be. So what's next?
These insights will help you make a few decisions, namely, where you'll focus your efforts and how. Start by taking a closer look at the hotels costing you the most on energy and use your benchmark data to prioritize the order in which you'll address the problems.
An energy management professional can help you answer the question: What is driving this comparatively higher consumption?
Lighting, heating, cooling, and hot water are the biggest contributors to energy expenses for hotels. An expert can examine the hotels in question to determine the source of the extra expense and make recommendations.
Can halogen lights be exchanged for more efficient LED technology? Can temperature set points be modified without risking guests' comfort? Would the efficiency gained by installing motion sensors for light and climate control make sense financially? Are low flow shower heads the answer?
On the flip side, the best performing hotels in your portfolio can be used as models. What are the operating procedures there? What energy-efficient technologies have you invested in and what impact have those had on costs?
Educate Staff to Put Benchmarks to Work
Staff must be involved in the energy management program in order for it to be successful. From the executive team to the cleaning crew, everyone needs to be involved in the process and understand its value to the business. As you set goals, assign accountability, and measure progress, employees' understanding of their role in the process will increase the likelihood that you meet your targets.
Why? Because decisions made by building occupants regarding equipment use and operations have a great impact on a facility's performance. More often than not, small changes can have a substantial impact on operating costs and energy consumption.
Measure and Report Emissions
While we don't know if the energy bill of the future will call for carbon caps or a cap-and-trade system, tackling accurate measurements and reporting of your business's carbon emissions today might be smart. Since you've already collected energy consumption data to create benchmarks, and will continue collecting it to measure progress, it's an easy jump to emissions reporting.
Utility invoice data easily converts to emissions output, commonly reported as carbon dioxide equivalents (CO2e). Having a tool to track energy consumption and its associated CO2e will create the foundation for benchmarking the effects of energy conservations measures over time. An energy management professional can provide you with such a tool and help you accomplish the following:
- Track carbon emissions at an enterprise, state, group, or site level
- Allocate carbon emissions to the appropriate sources (Scope 1,2,or3)
- Determine carbon dioxide equivalent (CO²e) emissions based on source, including N2O and CH4 values
- Use site or operational characteristics to measure emission intensities
- Establish a baseline year to measure progress towards goals
- Track carbon offsets to fully understand your net carbon position
Bottom line: climate change legislation is inevitable, and it will impact the way businesses consume energy. When will it happen and what will it look like? We can't be sure. But when the time comes, the more ready you are for higher energy costs or stricter emissions regulations, the better off you'll be in the long run. Evaluate where your business stands today, and you'll be glad you did tomorrow.
Jim Poad, a 30-year energy industry veteran, serves as Director of Client Solutions for expense and energy management firm, Advantage IQ. In this capacity, Mr. Poad is responsible for developing and directing the Company’s energy management programs on behalf of clients. He works with clients to develop and implement a customized strategy to better manage energy usage, reduce overall operational costs, and meet overriding corporate objectives. He has helped clients save millions of dollars through the implementation of supply-side and demand-side initiatives. Mr. Poad can be contacted at 608-755-1650 or firstname.lastname@example.org. Extended Bio...
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