Energy efficiency is often deemed as a resource leading to large depletion of carbon emissions and displacing electricity from more energy-intensive supply-side resources. However, energy efficiency benefits are not where they could be, given the availability of current technology. According to International Energy Agency (IEA) the best available solutions and technologies were not yet implemented, which costed billions.
A clear example of this gap in the energy efficiency area exists within small to medium sized enterprises (SMEs). SMEs are a great economic driver and according to the International Finance Corporation, 90% of global enterprises are SMEs which account for 50% of employment worldwide.
What are Small and Medium Enterprises (SMEs)?
SME is a non-subsidiary, independent company that employs less than a certain number of workers. This number can vary depending on the country: in the US, the upper limit is 500 while in the EU the limit is 250. SMEs can be broken down into micro, small and medium-sized enterprises.
Small and medium enterprises play a major role in the economy of any nation. They are considered as the engines of economic growth. They are often the main pillars of an economy. Their contribution to the nation’s gross domestic product (GDP) and amount of employment it generates are significant.
SMEs represent a large but often overlooked part of the energy consumption landscape. They also drive innovation by carrying out more than 20% of research & development activities, patent applications and new product output globally.
On their own, SMEs don’t consume huge amounts of energy. But collectively, their energy demand is a different story. About 30% of SME energy demand could be eliminated by cost-effective energy efficiency measures, such as energy management software. Energy efficiency can really help SMEs in big ways, too: not only by cutting costs to free up resources to invest in more productive activities, but it can also help them become more resilient, competitive and innovative.
Energy Efficiency Challenges for Small and Medium Enterprises
Despite the above, energy efficiency solutions have typically addressed either residential energy clients (through dedicated energy monitoring solutions) or large buildings (with complex Building Energy Management Systems – BEMS). Neither of these solutions is specific enough to the needs of SMEs. SMEs may require more complex solutions than those provided to the residential sector but they may not necessarily possess the financial capabilities to invest and to maintain complex BEM Systems suited only for large buildings.
One contributing factor to these dismal statistics is that SMEs are often overlooked by Energy Service Companies (ESCOs) who tend to chase big projects in bigger buildings in the biggest markets. This leads to a huge energy services gap for SMEs, because the largest buildings in the largest markets have typically already committed significant resources to energy efficiency.
As this market segment remains largely unexplored, there are great opportunities for providers like Energy Service Companies (ESCOs) or Energy Utilities to tap into the energy efficiency potential targeted towards the SME market. SMEs are more likely to embrace energy efficiency as they have more opportunities to do so and also economic motivation as the level of expected savings can be much higher than residential households. However, although these SMEs represent a large proportion of energy consumers, they have been a neglected middle for too long in what regards energy efficiency solutions. Finding a new way to approach this segment represents a big opportunity to create synergies between SMEs, utility companies, and ESCOs while fostering more efficient energy consumption.
Variety of possible solutions to choose from
There are a broad range of measures that have been existing for years. Energy efficiency optimization opportunities are multiplied with the latest technologies in the field of smart electrical panels, the Internet of Things, data-driven cloud applications with analytics and alert systems, light control, room control, HVAC, optimizing power availability, reliability and quality right from the source, smart meters and monitoring, energy management applications, equipment to optimize voltage power, renewable energy (integration) possibilities, more efficient types of lighting such as LED lights, solar shading control, roof and window materials, new building management applications and an increasing offering of equipment, both for energy efficiency and for various business and building purposes.
Steps to Manage Energy in Small and Medium Enterprises
To manage energy in small and medium enterprises at its best, we have to follow a few steps:
- Understand the Energy Usage
The first thing to focus on while on the way to save energy is to actually understand how much energy the business is using. If the most energy consumed area in the business has been noted, then it becomes a much easier task to focus on the ways of saving and managing the energy consumption.
- Get the Staff Engaged
Another important thing to take care of while running towards energy management in any business is to look at the fact that it takes teamwork to reach a goal. So, it is crucial to let the staff know that it is important to improve energy efficiency of the business and encourage them to look around at their day-to-day work and find areas to make some energy savings.
It is also equally important to communicate that the measures which are been taken are also focused on the environmental benefits of the energy savings.
- Identify the Areas and Manage Them
Once the staff is engaged, it is the time to identify energy savings and then come up with an energy management plan. It is quite important to identify the top energy loads at the business and make a plan to manage the energy efficiency in those areas.
- Implement Value-added Services Focused on Energy Efficiency
SMEs has to manage costs more efficiently by using value added services like tailored advice about the adequate energy efficient products, services and best practices for their specific business, notifications on higher-than-expected bills or enhanced self-service channels with business specific tools.
Benefits for SMEs of the monitoring of electricity consumption
When a SME faces the need to monitor electricity consumption a preliminary energy audit or inspection is performed, which results in measures, part of which is the establishment of an energy monitoring system in the enterprise. The purpose of such system is to carry out ongoing control and monitoring and the collection of up-to-date data on electricity consumption (and not only, the consumption of other resources can be monitored) to ensure the production process. The data serve for decision-making and taking measures to achieve optimal energy consumption in the operation of individual facilities. Based on the collected data, the company will be able to make inquiries about the consumed electricity, as well as to perform analyzes and make decisions leading to a reduction of energy consumption. The energy monitoring system can monitor metering points (electricity meters, water meters, etc.) in general for the enterprise, as well as for different production facilities on the territory of the enterprise. In this way, the system provides information on the current energy consumption – total for the enterprise and distribution by individual facilities or productions. The collected data are also used to assess the quality of electricity, to create a consumption profile of individual consumers, as well as their operating time.
The benefits for SMEs of the monitoring of electricity are:
- Improving the energy balance;
- Identification of the main energy consumers and improvement of their service and operation;
- Increasing efficiency and optimized energy costs – competitive advantages;
- Increasing the commitment of employees for more efficient use of energy;
- Strengthening corporate social responsibility and commitment to reducing the energy footprint of the activity;
- Limiting the consumption of energy resources and thus increasing the environmental friendliness of the production process;
- Prerequisite for introduction and certification of an energy management system. Compliance with the requirements of the international standard ISO 50001 for introduction and implementation of a unified policy in the field of energy consumption and energy use. Standard ISO 50001 sets out the specific requirements applicable to the use and consumption of energy, including the measurement, documentation and reporting, planning and purchase of equipment, provision of the necessary human resources and other factors that affect energy consumption.
ADD Bulgaria has developed a solution for monitoring and measurement of energy consumption and other devices and installations, that helps SMEs optimize their processes and costs. You can have a look at this article for more information. Or if you want to consult with us about a project, you can contact us – free of charge without any obligations.
Good practice in energy efficiency
Energy management for SMEs
Energy Efficiency in Small and Medium Sized Enterprises