Procurement can lead on energy efficiency, as long as it takes a whole-life view, argues city infrastructure director Tony Gale
That all nations need to make a joint stand on global warming and energy security is much discussed.
Governments have placed a spotlight on the issue by introducing EU legislation setting the 20-20-20 targets for carbon reduction and energy efficiency. These are: a reduction in EU greenhouse gas emissions of at least 20 per cent below 1990 levels; 20 per cent of EU energy consumption to come from renewable resources; and a 20 per cent reduction in primary energy use compared with projected levels.
Challenged by the state of the world economy, both the public and private sectors are facing punitive measures, such as financial penalties and carbon taxes, if they fail to meet these commitments by 2020.
For many senior executives, it’s clear that introducing whole-life cost evaluations and future-proofing is a priority. However, an element of navel-gazing exists. Who is really responsible for delivering the systems and solutions? Is it the designer, contractor, facilities manager, or, dare I say it, procurement department?
In truth, whether it’s a new build or retro-fit development, many a well-designed, well-negotiated carbon and energy-saving project has come a cropper once it reaches the procurement department.
Why? Sadly, the pressure to get more for less puts undue emphasis on the metrics of capital expenditure rather than whole-life or operational cost. So it is a natural instinct to break solutions into constituent parts then push for the lowest price for each.
Of course, it’s tempting to stick with the principles of the traditional buying agreements that have served us for decades and are designed to squeeze suppliers down to the very last penny. Inevitably this causes them to resort to low-cost alternatives – such as selecting a £1 halogen lamp rather than a £200 LED equivalent. This may seem a great deal from a buyer’s perspective, but is surely a false economy. The halogen lamp will last six months, the LED 10 years or more, and replacing the halogen lamp costs £50 or more in maintenance costs every time, while the LED saves £0.66 in every £1 spent on lighting energy.
1. Energy price and consumption should be collaborative targets. Energy costs will only increase, so while they need to be reduced, usage should also be driven down.
2. Facility and production improvements should include procurement from the beginning, since not understanding the value chain drives a disconnect.
3. Challenge the energy users to install measurement equipment and have plans for remedial action.
4. Discover where the main challenges of energy consumption, carbon emissions and water usage are, and engage the relevant departments to find ways to save money.
5. Change your mindset of capital expenditure versus operational savings.
6. Look to future-proof software upgrades to improve energy performance on a well-designed application. This is more cost-effective than intrusive refurbishments at a later date.
☛ Tony Gale is director of city infrastructure at GE