Energy Productivity isn't Energy Efficiency

Greetings! This topic has come up a few times in the recent weeks with customers and partners. So I thought I'd have a crack at explaining the difference. It's kind of a glass half full versus half empty, the glass is the same, but the perspective is entirely different. Clarity on this will not only save you money but enable you to make a bunch more.

Is Energy Productivity (EP) synonymous with Energy Efficiency (EE)?

Contrary to common belief, the answer is a firm NO. Convincing industrials and manufacturers that transitioning from EE to EP represents more than just a semantic shift, it's a fundamentally different a mindset. If you want to save money, run an energy efficiency program. If you want to make more, run an energy productivity program. Energy efficiency focuses on minimising energy consumption. Energy productivity optimises productivity, using energy as the lens.

Here is a quick graphic to highlight the difference.

EP embodies the total value extracted from utilising a unit of energy. This comprehensive approach addresses the holistic value proposition for users and the broader economy by optimising energy application, going beyond mere efficiency improvements in machinery and equipment. EE, while significant, is just one facet of the broader concept of EP.

Consumers aren't in the market for 'energy efficiency' per se; they seek what they value. Therefore, crafting energy programs that resonate with consumers necessitates a deep understanding of the total value that energy application can deliver. This doesn't mean directly marketing 'energy productivity' to consumers; rather, it entails employing an EP methodology to articulate the holistic value proposition through an energy-centric lens.

The value derived from an energy solution varies across sectors. Calculating EP in such cases involves assigning a monetary value to each benefit and dividing it by the energy consumed – an approach markedly different from traditional energy efficiency calculations.

In the manufacturing sector, key value factors might include enhancing competitiveness, reducing energy expenses, minimising maintenance costs, boosting reliability, maximising throughput, and justifying investments in more productive capital. Actually plotting energy usage against production numbers (a Performance Characteristic Line (PCL)) graphically highlights how productive your energy is. A great deal of insights can be gained from this graphic, such as the cost of energy when production is stopped and being able to forecast energy consumption at scale.

EP, as advocated by the International Energy Agency (IEA), encapsulates the total value generated by energy utilisation, recognising not just energy efficiency gains but also other tangible benefits. With this approach, we don't relegate additional savings to mere 'co-benefits' or 'non-energy benefits'; instead, we acknowledge them as integral parts of the value proposition.

Furthermore, EP serves as an integrative concept, advocating for the harmonisation of energy end-use policy with broader industry, urban, and manufacturing policies and planning. However, challenges arise when energy or environmental agencies implement EP programs in isolation from sector-specific implementation agencies.

An EP approach, aligned with the principles outlined by the IEA, underscores the importance of a supply chain focus – from production to distribution and consumption. By identifying optimisation opportunities across the supply chain and concentrating efforts where the greatest benefits lie, we can unlock significant value.

In conclusion, embracing the principles of EP, as championed by the International Energy Agency (IEA), represents a paradigm shift offering substantial benefits for energy users and practitioners alike. It's imperative for energy consumers, manufacturing and industrial professionals to comprehend EP fully and adopt a 'benefits' language that resonates with users, addressing their specific priorities and values. This shift can catalyse a renaissance in energy management, unlocking vast commercial and environmental benefits through the optimal utilisation of energy resources.

If you like to learn more about Energy Productivity, or our Lean Energy And Productivity (LEAP) Program drop us a note or 'Like' this article.

Regards

Brad Parsons is the CEO and Founder of Rely Ability.