Energy Efficiency: Aligning Cost and Sustainability for Success
October 27, 2023 by Accenture
The Metro de Madrid is the 7th longest metro in the world, covering 293km with 300 stations. It uses about 600 GWhs of electricity annually – around 0.25% of Spain’s total electricity consumption. About 5% of this power is used to run the ventilation system, made up of around 1,000 fans. The city had committed to reducing its electricity spend -- but needed to balance energy efficiency with passenger comfort and safety. Accenture worked with the Metro to develop an artificial intelligence ventilation system that optimizes airflow.
The system relies on the physical design of the metro stations, travelers’ frequency, operational restrictions and dynamic inputs of hourly electricity prices and weather. Machine learning modules continually improve the way the system runs, recalibrating every eight hours. This system has reduced the cost of running the ventilation system by 25%, and avoided 1,800 tons of CO2 emissions – the equivalent of keeping 390 cars off of the road each year.
Bolting on vs building in
The Metro de Madrid is a leading example of how to embed energy efficiency. Station operators don’t need to think about how to run the fans more efficiently because the fans do it themselves – the next level up from motion-activated lights or escalators.
Energy efficiency is where cost and sustainability first meet in many industries. Telcos, for example, spend between 20-40% of the cost of running their network on energy – an obvious target for reduction. It’s not just energy-intensive industries that see benefits from greater efficiency. For the average retailer, cutting energy costs by 20% boosts the bottom line as much as increasing sales by 5%. With energy prices about twice as high in Europe than before the pandemic, energy efficiency is a business as well as sustainability imperative.
Yet for many organizations energy efficiency is still a ‘bolt-on’ program – doing an energy survey, upgrading equipment to the most energy-efficient model, and working around the edges to improve processes or incentivize employees to turn off lights.
Recent advances in technologies and better use of data and analytics mean organizations can drive further savings and accelerate their transition to net zero. The difference is digitally enabled operational energy-efficiency – being able to use intelligence to change the way you operate your buildings, manufacturing processes or fleet to save energy and optimize cost. This changes energy efficiency from a program into an embedded capability. The opportunities for efficiency improvements are vast – typically 10-30%, depending on the industry.
Accenture has been using practical measures, from lighting, and cloud migration to HVAC, to automate and optimize systems generating $326M+ in energy cost savings – without even owning any buildings.
What organizations need to do
When starting to embed energy efficiency in an organization, the short-term (6-12 month) focus should be on data and analytics to create a comprehensive view of energy use:
Gather energy-use data across buildings, industrial processes and fleets, and then determine when this view needs to be real time, or near real time
Identify anomalies and interventions and build industrial processes
Identify and act on immediate opportunities such as employee behavior change campaigns to save energy
In the medium-term (1-2 years) businesses need to focus on delivery, tracking continual improvements and embedding energy efficiency decisions into automatic controls and processes. The levers to improve efficiency will depend on the industry, but companies can look across:
Buildings – from office buildings to manufacturing to warehousing, digital solutions can be implemented to reduce energy use. Globally 44% of CEOs say technology will make an impact on sustainability in their industry in the next 5 years
IT Operations – only 7% of companies have fully integrated their sustainability and technology strategies, and yet at the current rate of growth technology could contribute to 15% of global emissions by 2040. Interventions across the technology landscape can decrease the energy demand.
Customers – for certain industries, like banking and utilities, customer energy use far outweighs that in direct operations. A North American utility realized a 5-10% reduction in customer energy spend through a domestic demand response program, with $20m residential electricity savings since 2015.
Employees – changing habits around use of HVAC and lighting alone can save up to 15% of energy use, as it did for a large sports retailer across 180 of their European stores. Tracking how employee behavior improves efficiency gives evidence as well for which activities can then be automated.
Looking to the long-term
Energy efficiency is a short- to medium-term activity. In the long term, businesses need to look beyond continuous improvement in energy efficiency and transform where their energy comes from as part of Total Enterprise Reinvention.
Demand reduction is a significant step in decarbonizing and embedding sustainability into the fabric of corporate culture. It is a stepping stone to a deep understanding of how, where and when companies use energy, which then allows them to change their energy mix to clean energy sources.
Understanding energy demand enables flexibility in energy use, allowing companies to incorporate a high percentage of variable renewables like wind and solar into their mix. The clean, electrified economy will operate differently than today’s, and data-led energy efficiency is fundamental to creating that economy.
By Andy Wales, managing director and global lead for sustainability solutions and assets at Accenture, and Liz Burlon, senior manager for utilities strategy and consulting y at Accenture.