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Energy Efficiency In Organizations: How Implementing the ISO 50001: 2018 Standard Can Reduce Energy Bill and Emissions

Energy Efficiency In Organizations: How Implementing the ISO 50001: 2018 Standard Can Reduce Energy Bill and Emissions

  • Vicente Bento • Partner and Operations Manager at InSite Moçambique

At a time when the conflict between Russia and Ukraine has increased energy prices around the world, the reduction of energy consumption in Organizations has become crucial for their sustainability. In this context, throughout this article, I will address the benefits of implementing energy efficiency measures and the use of the ISO 50001:2018 standard as a support tool in promoting efficient and sustainable energy consumption, considering the energy framework worldwide and in Mozambique.

In the latest report of the American Council for an Energy Efficiency Economy (ACEEE), published in April 2022, the energy performance of the 25 largest energy consuming countries, corresponding to 82% of world consumption (South Africa and Egypt being the only countries from the African continent in that list), was compared. Using 36 metrics to evaluate energy efficiency, divided into four categories – buildings, industry, transport, and national effort – the results were surprising… in the negative. Although some of the countries are already making efforts with regard to energy efficiency in buildings or incentives for buying electric cars, the average efficiency of the countries listed was only 48.5%.

According to the World Bank, “Mozambique has undertaken significant efforts in recent years to electrify the country,” with the electrification rate increasing from 5% in 2001 to 29% in 2019. Despite these efforts, the Government’s current challenge is to provide energy to all Mozambicans by 2030, based on the National Energy for All Program, which is aligned with the Government’s Five-Year Program and the United Nations’ Sustainable Development Goals.

Data from the Lusophone Renewable Energy Association (ALER) indicate that Mozambique has a total installed capacity of 2780 MW (2020), and plans to increase this total capacity to 6001 MW by 2030, according to the Electricity Sector Master Plan.

Of the total energy consumed in the country, 79% comes from hydropower, followed by natural gas (16%), heavy fuel oil (4%) and solar with only 1% (2020). However, this scenario will certainly change in the coming years with the prospect that by 2043 renewable energies (mainly solar and wind) will reach 20% of total consumption.

Given the current scenario, in a country where the sector that consumes the most energy is industry, and with prices increasing day by day, it makes sense that companies start thinking about strategies to be more energy efficient. This can be achieved through small changes in energy management in companies, or through technological changes that allow for efficiency gains.

The ISO 50001:2018 standard should be seen as a tool to support the promotion of efficient and sustainable energy use… its implementation should be encouraged and adopted by national companies

However, the implementation of energy efficiency measures will not only bring benefits to the Organization, but also to the Environment. In fact, the introduction of energy saving measures will result in a reduction in consumption and, in turn, a decrease in greenhouse gases that are released into the atmosphere. Thus, these measures will obviously contribute to the minimization of environmental impacts and to the fight against climate change. The ISO 50001 standard was created in 2011 with the aim of establishing specific requirements for the implementation of an Energy Management System (EMS) in Organizations, so that they continuously improve their energy performance. The revision of this standard in 2018 brought it closer to other management systems used, allowing better integration, for example, with the Quality Management System (ISO 9001) or the Environmental Management System (ISO 14001).

During the implementation of the EMS guided by ISO 50001, Organizations go through several steps that will allow them to understand and define measures to mitigate their inefficiencies, towards a constant improvement of their energy performance:

STEP 1 – Analyze the Context of the Organization

As a first step, Organizations must analyze their context (internal and external), mapping all the important points in the context of energy management, which can affect the results of their EMS. From the internal point of view, Organizations must answer several questions, such as: what is the strategic importance of energy to the business? To what extent is top management involved in energy management in the organization? Are employees aware of the need to save energy?

Which stakeholders are most attentive to the organization’s commitment to energy sustainability? In addition to these questions, at this stage it is also important to define the scope of the implementation of the EMS, which can be applicable to the entire organization or only to some production processes or locations. Imagine for example a company with manufacturing plants in several provinces: top management may decide to implement the SGE in all plants at the same time, or to proceed with the implementation gradually, thus phasing in the necessary investment.

STEP 2 – Planning and establishing objectives and goals

After defining the context of the organization and the scope of the EMS implementation, the next step should be to conduct an energy diagnosis. This diagnosis has the objective of knowing the history of energy consumption, identifying the types of energy consumed and how it is distributed among the various production processes. Only based on this survey will it be possible to define the basic lines of an SGE and establish objectives and goals for energy performance in the organization. In summary, this survey should

  • Describe the different types of energy consumed (e.g. electricity, gas, diesel,…);
  • Identify the Significant Energy Uses (USE) and
  • Identify opportunities for improving energy performance.

At this stage it is also important to evaluate the costs and benefits of investments that may be necessary/recommended, such as, for example, the purchase of more energy efficient equipment, the placement of thermal insulation in buildings, among others. However, it is important to remember that many of the measures to be implemented in an Organization involve little significant costs, since, in many cases, these measures should go through the implementation of good energy saving practices, rather than major technological changes.

STEP 3 – Manage energy consumption

After defining the Energy Performance Indicators (EPI), establishing the respective objectives and targets and planning the actions to achieve them, the Organization should gather all the means and resources to manage its consumption. In light of this, it is crucial to establish appropriate operational criteria so that the energy objectives are achieved. For this, it is also important that the professionals responsible for this area have the necessary skills for the operation and maintenance of the equipment and production processes that consume more energy. In addition to the training of employees, it is also important to create a responsible purchasing policy, acquiring, whenever possible, products and equipment with low energy consumption, as well as choosing service providers with the same type of energy policies.

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STEP 4 – Monitoring

The monitoring, measuring and evaluation of energy performance is fundamental to the effectiveness of the EMS. In this phase it is important to understand if the organization is really improving or not. To do this it is necessary to evaluate if the objectives and goals have been achieved and if the operational control measures are being fulfilled. If the goals have been achieved, even more demanding objectives should be set for the future.

STEP 5 – Strive for continuous improvement

An SGE implemented based on the ISO 50001 standard allows Organizations to periodically evaluate their performance and set increasingly ambitious goals, seek new challenges in new areas and integrate their employees in multidisciplinary teams in search of increasingly efficient energy solutions.

Some case studies show a significant reduction in the energy bill of some organizations due to the implementation of the standard in reference and consequent improvement in energy efficiency. This is the case of TATA Global Beverages (India), the second largest tea company in the world, whose ISO 50001 certification resulted in savings of about USD 70,000 in the first year of implementation and about USD 35,000 in the second year (data from BSI Group); and the University of Sheffield (England), which had a savings of about USD 120,000 in its annual energy bill and reduced 11% of its annual carbon emissions.

At a time when the energy challenges on the African continent are great and access to energy in certain regions remains a problem (as is the case in some parts of the country), the energy transition represents a huge opportunity for countries like Mozambique, which has one of the largest reserves of natural gas in the world. However, issues related to the rational and efficient use of energy are, and will continue to be, critical to sustainable development.

In this context, the ISO 50001:2018 standard should be seen as a tool to support the promotion of efficient and sustainable energy use. In this sense, its implementation should be encouraged and proactively adopted by national companies, especially those in the Industry sector, which will also be the ones that will get the highest return on the necessary investment. As we have seen, in addition to lowering the costs of electricity or gas bills, the implementation of an Energy Management System (EMS), based on the ISO 50001:2018 standard, contributes to the fight against climate change.

Thus, this certification will help Organizations both become more energy efficient and demonstrate their commitment to sustainability, which will make them gain greater market recognition from their stakeholders. In short, this should be the way forward.

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