A new joint study from the International Energy Agency (IEA) and the Institute for Industrial Productivity (IPP) offers a step-by-step guide to implementing energy management programmes for industry

Opportunities to improve energy efficiency in industry are still under-exploited, even though the sector accounts for roughly one-third of global energy demand. Improving energy efficiency in industrial companies provides a range of benefits for the companies themselves as well as for the economy as a whole.

These include improved energy security, reduced greenhouse gas emissions, a greater ability on the part of industry to cope with climate change and also improved productivity.

But companies often need help in pursuing efficiency as a strategic investment, even when it is a path to greater profitability. Government-led energy management programmes offer companies means of reducing energy consumption improving productivity and competitiveness.

A new report jointly developed by the IEA and the IIP, “Energy Management Programmes for Industry”, uses lessons learned from various programmes around the world to present a ten-step implementation guide for policy makers. This Pathway report, supported by the EBRD’s Shareholder Special Fund, is based on a review of such existing programmes, as well as consultations with experts and practitioners.

The report offers diverse approaches to fit the different frameworks and objectives of individual countries and industrial sectors. In-depth case studies show the importance of stakeholder consultation, pilot projects and evaluation and the role that stakeholders such as the EBRD can play in stimulating the uptake of energy management systems in industry.

One case study focuses on the experience of the EBRD. Together with the United Nations Industrial Development Organization (UNIDO) with funding from the Global Environment Facility (GEF), the Bank launched a market transformation project in Russia. The project aims to improve industrial energy efficiency by building the capacity of the government to develop effective industrial energy efficiency policies and by enhancing the capacity of industry to engage in energy management and identify energy efficiency projects.

Ultimately, the project aims to develop effective business models for energy efficiency finance. .This case shows the benefits of integrated approaches that link technical assistance, capacity building and access to financing.

Energy management involves the systematic tracking, analysis and planning of energy use. For more than two decades, energy management programmes have encouraged industry to improve efficiency. Some programmes are compulsory while others are voluntary, but they all feature procedures and practices to encourage better energy use in industry.

“IEA analysis shows that, globally, industry could by 2030 cut energy use by the equivalent of the current annual electricity consumption of the United States and China combined,” said Bo Diczfalusy, Director of Sustainable Energy Policy and Technology at the IEA. “Much of this potential can be captured through energy management. However, this requires the development of effective policies. This report provides actionable guidance for how this can be done.”

Energy management programmes are not quick fixes. They work best when carefully planned and as part of a broader government agreement on energy efficiency. They need buy-in and so should be developed in a transparent manner and in close consultation with industry. Assistance, tools, training and many other resources are critical to success, as are initial incentives.

“Energy management programmes are an effective approach to promote energy efficiency in all types of enterprises from energy intensive industry to small and medium sized enterprises” said Terry McCallion, Director of the EBRD’s Energy Efficiency and Climate Change team. “Experience shows that systematic energy management is one of the most effective approaches to improve energy efficiency in industries since it equips companies with practices and procedures to continuously make improvements and capture new opportunities”.

"When energy management systems are embedded within wider energy efficiency agreements, they often enable greater energy savings than what companies would be able to achieve with the agreements on their own," said Dr. Jigar V. Shah, Executive Director of the Institute for Industrial Productivity. "Proper adoption of energy management systems, underpinned by incentives and support systems, greatly facilitates the continuous identification and realisation of energy saving opportunities."

Energy efficiency projects are also a key element within the EBRD’s overall Sustainable Energy Initiative (SEI), which aims to reduce energy waste, but also increase energy security and a diversification of the sources of energy. Under the SEI, which was launched in 2006, the EBRD has already invested over € 9 billion in over 482 energy efficiency projects across its region of operation.

This publication aims to equip decision-makers with essential information needed to reshape energy use in industry in a more sustainable manner. It provides guidance for governments how to plan, implement, monitor and evaluate energy management programmes for industry. This includes the identification of issues that need to be considered during each phase and the provision of a clear step-by-step process.

This IEA publication on “Energy Management Programmes for Industry” is the fourth in the “Policy Pathways” series on how countries can achieve the IEA’s 25 Energy Efficiency Policy Recommendations. This latest report breaks down its 10 steps into 24 actions that keep policy makers on target as they move from planning to implementation, then monitoring and finally an overall evaluation. It distils the lessons learned by pioneers, helping policy makers benefit from other governments’ successes in using energy management programmes to counteract barriers to energy efficiency improvement and promote the transition towards more sustainable energy use in industry.