ENERGY MANAGEMENT MODEL DESIGN:
Closing the gap between practical needs and theoretical knowledge
Master thesis, MSc Double Degree Operations Management
University of Groningen, Faculty of Economics and Business Newcastle University, Newcastle University Business School
Date 12-12-2016 Word count: 14571
Tara Meijer
Image on cover page is energy management model designed by Tara Meijer as a result of research performed in this thesis
First Supervisor / University Groningen: Dr. J. (Jasper) Veldman Co-assessor / University Newcastle: Prof. C. (Chris) Hicks
Organization: Wavin Group
Department: Supply Chain & Operational Excellence
TABLES
Table 1: Matrix of barriers for project management from literature classified according to Weber (1997)
Table 2: Necessary elements from theory
Table 3: Factory characteristics and questionnaire respondents Table 4: Companies selected for multiple case analysis
Table 5: Information on interviews, interviewees and code names companies Table 6: Coding tree for interviews
Table 7: Criteria assessment of EE project of best-practice companies Table 8: Barriers and possible solutions identified from interviews Table 9: Necessary elements from practice
Table 10: Combined necessary elements from theory and practice
FIGURES
Figure 1: Portfolio Selection Process (Archer & Ghasemzadeh, 1999) Figure 2: Research design (own creation)
Figure 3: Current top management/factory portfolio process (own creation) Figure 4: Stakeholder problems (own creation)
ACKNOWLEDGEMENTS
This report is the result of my final Master Thesis as fulfilment of the requirements for the dual degree of Master of Science in Technology and Operations Management (University of Groningen) and Operation and Supply Chain Management (Newcastle University Business School). This thesis was performed at Wavin global in Zwolle, the Netherlands. The writing of a Master’s Thesis is an individual challenge. However, the support of several people require some special thanking for their contribution and input in my research and the process.
First of all, I would like to thank my thesis supervisors. They provided me with valuable feedback and insightful suggestions that contributed to my final result. Secondly, I want to thank all the companies involved in this research for allowing me to research their companies or supporting me in the validation of my findings. Thirdly, I want to thank all Wavin employees from the different Wavin factories for their contribution and time to answer my many (and often long) questions. Moreover, I want to thank the employees at Wavin Head office in Zwolle who had to deal with my questions on a daily basis and were always prepared to provide me with needed information. A special thanks goes out to my two office colleagues who had to endure their thesis period all over again and were great mental support.
Last, but definitely not least, I want to give a big thanks to my company supervisor Bauke Vollebregt. During our almost weekly meetings he continuously challenged me with critical remarks and interesting ideas. Via his continuous drive for improvement, his knowledge on sustainability and his extensive business knowledge he contributed greatly in the deliverance of this thesis.
ABSTRACT
ABREVIATIONS
BC Business Case
CO2 Carbon-dioxide
CSR Corporate Social Responsibility
EE Energy Efficiency
EM Energy Management
EMS Energy Measurement System
EnMS Energy Management System
IS Information System
KPI Key Performance Indicators
kWh Kilo Watt hour
LED Light Emitting Diode
NM Not mentioned
PDCA Plan-Do-Check-Act
PM Portfolio Management
PS Portfolio Selection
CONTENT
TABLES ... 3 FIGURES ... 3 ACKNOWLEDGEMENTS ... 4 ABSTRACT ... 5 ABREVIATIONS ... 6 CONTENT ... 7 1 INTRODUCTION ... 9 2 THEORETICAL BACKGROUND ... 12 2.1 Literature review ... 122.1.1 Initial literature review ... 12
2.1.2 Extended literature review ... 13
2.2 Necessary elements from theory ... 15
2.2.1 Policy ... 15
2.2.2 Management ... 15
2.2.3 Technologies ... 16
2.2.4 Portfolio creation ... 17
2.2.5 Barrier reduction ... 18
2.2.6 Summary necessary elements ... 18
2.3 Literature gap ... 19
3 METHODOLOGY ... 20
3.1 Research question(s) ... 20
3.2 Research Design ... 21
3.3 Diagnosis (Chapter 4): Problem investigation ... 21
3.3.1 Design problem of Wavin ... 22
3.3.2 Possible solutions best-practice companies ... 23
3.4 Design (Chapter 5): Solution creation ... 27
3.5 Validation (Chapter 6): Model validation ... 27
4 DIAGNOSIS ... 29
4.1 Case company analysis ... 29
4.1.1 Stakeholder identification ... 29
4.1.2 Problems ... 30
4.1.3 Desires ... 32
4.2 Multiple Case analysis ... 32
4.2.3 Technology ... 35
4.2.4 Portfolio creation ... 37
4.2.5 Barrier reduction ... 39
4.2.6 Other ... 40
4.3 Necessary elements from practice ... 42
5 DESIGN ... 44
5.1 Assessment available solutions in theory and practice ... 44
5.2 Necessary elements ... 45
5.3 Design of the model ... 46
5.4 EM model ... 48 5.4.1 Conditions ... 48 5.4.2 Process ... 49 6 VALIDATION ... 55 6.1 External validity ... 55 6.2 Internal validation ... 56 6.3 Practical relevance ... 56 7 DISCUSSION ... 58 7.1 Novelty ... 58 7.2 Generality ... 59 7.3 Significance ... 60
7.4 Limitations and future research ... 60
8 CONCLUSION ... 62
REFERENCES ... 63
APPENDICES A – F ... 70
Appendix A: Barrier classification ... 71
Appendix B: Questionnaires for Wavin factories ... 73
Appendix C: Interview guide ... 76
Appendix D: Company and interviewee names [CONFIDENTIAL] ... 79
Appendix E: Barrier identification interviews ... 80
1
INTRODUCTION
Improving energy efficiency (EE) in industries has become crucial due to rising energy prices (Greene, 2011), environmental law restrictions (Greene, 2011), new supply and demand policies (Aflaki, Kleindorfer, & Miera Polvorinos, 2013) and challenges of environmental pollution and resource depletion (Lieder & Rashid, 2016). This caused industrial companies to acknowledge the effectiveness of energy management (EM) towards increased EE (Schulze, Nehler, Ottosson, & Thollander, 2016; Bunse, Vodicka, Schönsleben, Ernst, & Brülhart, 2011). The objective of EE is to use less energy to produce the same amount of useful output, or use the same energy to produce more useful output (Patterson, 1996). EM can be defined as ‘a combination of EE activities, techniques and management of related processes which result in lower energy costs and CO2 emissions’ (Ates & Durakbasa, 2012, p. 81). The implementation
of EM in a company is done via the implementation of an energy management system (EnMS). A system is defined as ‘a group of interacting, interrelated, or interdependent elements forming a complex whole’ (AHD, 2009).
Problems within energy management
As will become clear later, despite the existence of different EM models in literature (Aflaki, Kleindorfer, & Miera Polvorinos, 2013; Schulze, Nehler, Ottosson, & Thollander, 2016; ISO, 2011), case companies show that these models fail to cover the breadth of real world EM practices defined in the theoretical background (Abdelaziz, Saidur, & Mekhilef, 2011). In summary, there is a gap between theory and the real-world implementation of EnMS.
Theoretical context
applicability of existing models into practice were identified. These were: lack of empirical validation, specification of steps, criteria assessment of EE projects, information validity and the lacking success to bring EM to a strategic level of decision-making (Aflaki, Kleindorfer, & Miera Polvorinos, 2013; Schulze, Nehler, Ottosson, & Thollander, 2016; Archer & Ghasemzadeh, 1999; ISO, 2011). These theoretical shortcomings are the initial focus in the explanation of the identified gap.
Industrial context
The companies used in this research operate in the manufacturing industry. They create different products, serve different markets and have different energy requirements. This research is driven by a case company called Wavin. Wavin1 operates in the European
manufacturing industry involving plastic pipes and water drainage systems. Wavin is part of Mexichem, a world leader in the plastic piping systems and the chemical and petrochemical industries in Latin America. Wavin (2014) employs about 5179 people, has 31 factories in 24 different European countries and a yearly revenue of 1.2 billion. They produce 158.480 tons CO2, use 1,420,359 Gigajoule energy, 464,000 m³ water, 1062 tons of waste to landfill and
37,876 tons of recycled material. Since 2012, Wavin is actively engaged in EE, via the implementation of EE projects, but has not been able to adopt a management system. To identify what an effective EnMS entails, seven best-practice companies were selected and their management systems for EE were investigated.
Theoretical and practical contribution
Research design
The design science research was conducted based on a three-stage approach to the regulative cycle of Wieringa (2009) involving diagnosis, design and validation. The research question of this research was:
‘What energy management model can improve a company’s energy efficiency, taking the gap between theory and practice into account?’
2
THEORETICAL BACKGROUND
This chapter reviews existing academic literature on EnMSs. Based on an exploration of literature a list of necessary elements for an EM model was created. A model2 can be defined
as ‘a schematic description or representation of something, especially a system or phenomenon, that accounts for its properties and is used to study its characteristics’ (AHD, 2009). The chapter ends with identified gaps from literature.
2.1 Literature review
2.1.1 Initial literature review
A literature research was conducted via an electronic database research using EBSCO. An initial research was conducted on scholarly journals in the Operations Management and Energy and Environmental Economics field labelled as top or very good journals by the University of Groningen.
Findings showed that research on EE is often focuses on descriptive research with examples of energy price effects on efficiency (Parker & Liddle, 2016; Steinbuks & Neuhoff, 2014; Lund, 2007), assessment of different consumer demands caused by efficiency awareness (Kammerer, 2009; Soytas & Sari, 2007) and identification of determinants for efficiency performance in companies (Mulder, 2015; Bostian, Färe, Grosskopf, & Lundgren , 2016; Lundgren, Marklund, & Zhang, 2016; Boyd & Curtis, 2014). Furthermore, an EE paradox of the lacking implementation of feasible EE projects was researched (Kounetas & Tsekouras, 2008). Findings identified many sources for this paradox and identified the importance of policy influences on EE (Kounetas & Tsekouras, 2008).
Jia, Zhang, Arinez, & Xiao, 2016; Mukherjee, 2010; Fernandez, Li, & Sun, 2013). One management model on EE has been identified from Ngai, et al. (2013). However, this model was used to identify the maturity of an implemented EnMS specifically designed for the ISO50.001 standard (Ngai, Chau, Poon, & To, 2013). To conclude, none of the reviewed articles were dedicated to the creation of an effective management system for the design and implementation of EM.
2.1.2 Extended literature review
The lack of EM models identified in the top journal literature review led to a broader investigation of literature. Following research in different academic journals, consultation from a Scholar and the case company supervisor three models were identified:
1. Selection of a Portfolio of EE projects (Aflaki, Kleindorfer, & Miera Polvorinos, 2013) 2. Integrative EM framework (Schulze, Nehler, Ottosson, & Thollander, 2016)
3. ISO50.001:2011 process model based on PDCA-cycle (ISO, 2011). Model 1: Selection of a Portfolio of EE projects
The article of Aflaki, et al. (2013) describes a model for the identification and implementation of EE projects in industrial facilities (Aflaki, Kleindorfer, & Miera Polvorinos, 2013). This article opts for an integrated framework for the management of EE (Aflaki, Kleindorfer, & Miera Polvorinos, 2013). According to Aflaki, et al. (2013) necessary elements of an EnMS include:
1. EE portfolio selection framework;
2. Assessment criteria of EE projects focused on: a. Financial returns;
b. Green concern: the alignment of the EE projects to the company’s brand image and strategy;
c. Complexity: the function of the firm’s capabilities and the project’s organizational complexity measured by the need to involve external parties in the development, execution or operation of a project (Aflaki, Kleindorfer, & Miera Polvorinos, 2013; Williams, 1999; Pich & Loch, 2002).
A shortcoming in the article of Aflaki, et al. (2013) is its focus on an integrated framework for the management of EE focused solely on EE projects regarding other important EM practices. Model 2: ISO50.001 process model based on PDCA-cycle
The ISO50.001 EM quality system standard was developed by the International Organization for Standardization. This model applies the cycle of Plan-Do-Check-Act (PDCA) to design an EnMS (ISO, 2011). The ISO50.001 model is used as a standard to manage activities related to energy and has been implemented in several companies worldwide.
According to the ISO50.001 standard necessary elements of an EnMS include:
- Plan: develop a strategy involving baseline metrics, objectives, targets, Key Performance Indicators (KPI), and an action plan to establish an energy policy;
- Do: implement energy actions;
- Check: monitor and measure processes against predefined KPI and targets; - Act: actions for continuous improvement identified via management reviews.
A shortcoming in the ISO 50.001 standard is that the Plan-Do-Check-Act cycle makes intuitive sense, but can be perceived as too broad making it difficult for organisations to implement it effectively. Moreover, this model does not present a guide on the portfolio creation process. Model 3: Integrative EM framework
The model from Schulze, et al. (2016) provides different steps and conditions for an integrative EnMS. A conceptual framework was created based on an extensive literature research of different study methodologies, geographic locations and company size (Schulze, Nehler, Ottosson, & Thollander, 2016).
According to Schulze, et al. (2016), necessary elements of an EnMS include: 1. Three phases of:
c. Controlling: actions of data collection and monitoring, performance evaluation and management, benchmarking and internal reporting.
2. Reduction of barrier through creation of EM culture via active communication, top management (TM) involvement, reward and compensation and education and training; 3. Continuous improvement inserted via feedback loops, routinizing of the process and a
focus on KPI (Schulze, Nehler, Ottosson, & Thollander, 2016).
Identified shortcomings include a lack of empirical validation and, similar to the ISO50.001 standard, does not provide a description of the portfolio creation process.
2.2 Necessary elements from theory
From the literature review necessary elements for a theoretical EnMS were identified. These necessary elements are explained and defined below.
2.2.1 Policy
An EE policy defines how a company systematically addresses issues of energy development, including production, distribution and consumption (Abdelaziz, Saidur, & Mekhilef, 2011). A strategy should contain specific EE goals, objectives and targets that the company identifies for a given period of time (Aflaki, Kleindorfer, & Miera Polvorinos, 2013). Often a long-term strategic plan, covering a period of 5-10 years, for increased EE and reduced greenhouse gasses is drafted (Abdelaziz, Saidur, & Mekhilef, 2011). Targets are defined as ‘detailed and quantifiable requirements for improving the energy or GHG performance of (parts of) the company … arise from the company’s overall energy or GHG objectives’ (Rietbergen, van Rheede, & Blok, 2015, p. 550). These targets should also include according KPIs (Schulze, Nehler, Ottosson, & Thollander, 2016; ISO, 2011).
2.2.2 Management
• Energy audits
Energy audits are assessments of energy flows for energy conservation to reduce the amount of energy input into the system without negatively affecting the output (Abdelaziz, Saidur, & Mekhilef, 2011, p. 155). It helps organizations to analyse the current energy situation and discover areas where energy usage can be improved. Audits can be performed externally or internally. External audits are executed by independent outside assessors, but are costly and lack the operational benefits derived from internal audits (Darnall, Seol, & Sarkis, 2009). Internal audits use existing resources and are conducted by an employee or team of employees that are qualified to perform such audits (Darnall, Seol, & Sarkis, 2009).
• EE courses and training programs
EE courses and training programs involve actions from management to increase awareness of EE within the organization (Abdelaziz, Saidur, & Mekhilef, 2011). • Good housekeeping
Good housekeeping focuses on elimination of unfavourable conditions in the workplace to improve the EE (Abdelaziz, Saidur, & Mekhilef, 2011). Some of these basic elements of good housekeeping to reduce energy usage are: well-distributed artificial light, energy efficient lighting (e.g. LED), waste removal, clean factory floors and regular maintenance (Dufort & Infante-rivard, 1999; Abdelaziz, Saidur, & Mekhilef, 2011; Bunse, Vodicka, Schönsleben, Ernst, & Brülhart, 2011).
2.2.3 Technologies
Energy savings by technologies involves implementation of technological improvements. Examples as identified by Bunse, et al. (2011) include:
• More EE technologies/machines; • Energy recovery in the same process;
• Further use of waste energy in different processes;
• Increase in energy conversion efficiency and optimization of production processes.
tools (Gasparatos & Scolobig, 2012). However, Aflaki, et al. (2013) opted for EE project assessment not merely on financial gains, but also on green concern and complexity.
2.2.4 Portfolio creation
Another important EnMS practice researched in literature involves EE project selection and management referred to as portfolio creation (Aflaki, Kleindorfer, & Miera Polvorinos, 2013; Archer & Ghasemzadeh, 1999; Cooper, Edgett, & Kleinschmidt, 1999). A portfolio involves the management of a group of projects (Archer & Ghasemzadeh, 1999). This management is a significant part of EM and entails choices about strategy, resource allocation, project selection and balance of the right number of projects, also referred to as portfolio management (PM) (Cooper, Edgett, & Kleinschmidt, 1999). Deciding which projects will be taken into this portfolio involves portfolio selection (PS). PS is defined as ‘the periodic activity involved in selecting a portfolio, from available proposals and projects currently underway that meet the organization’s stated objectives in a desirable manner without exceeding available resources or violating other constraints’ (Archer & Ghasemzadeh, 1999, p. 208).
To create a portfolio, the model from Archer and Ghasemzadeh (1999) can be used. This is an often used model for PS and can be found in figure 1. The main process steps are grey. Although this model is not specifically designed for EE projects, it is often used and captures the most important aspects required for PS. Moreover, Archer and Ghasemzadeh (1999) stressed the importance of implementing a decision support system acting as a ‘database’, including portfolio database management, model management and user interface with a need for continuous interaction between system and decision makers.
2.2.5 Barrier reduction
The last important aspect in EM identified from literature is the reduction of uncertainty via the reduction of barriers (Kounetas & Tsekouras, 2008). A barrier can be defined as ‘a postulated mechanism that inhibits investment in technologies that are both energy efficient and (apparently) economically efficient’ (Sorrell, et al., 2000, p. 11). According to Weber (1997) the following barriers can occur: institutional barriers, market barriers, organizational barriers and behavioural barriers (Weber, 1997). A literature review of articles on barriers for project management (not merely focused on EE) presents an overview of barriers categorized according to Weber’s categorization presented in Appendix A. The heterogeneity of companies makes barriers company specific. With expert elicitation, a matrix of barriers for EM was made and can be found in table 1 below.
Table 1: Matrix of barriers for project management from literature classified according to Weber (1997) Institutional barriers
• Governmental regulations and policies • Electricity prices (kWh)
• Fuel prices (oil and gas)
Market barriers
• Access to investment budget • Access to capital • Principal-agent problem • Hidden costs • Technological complexity Organizational barriers • Hierarchy in organization • Responsibilities • Culture • Lack of time • Lack of money
• Lack of knowledge and skills
• Lack of useful and validated information • Other priorities than EE
Behavioural barriers
• Bounded rationality • Credibility and trust • Inertia
2.2.6 Summary necessary elements
Table 2: Necessary elements from theory Policy Strategy with:
• Objectives • Goals
• Targets with according KPI Management Actions of:
• Energy audits (internal/external)
• EE courses and training programs for education of employees
• Good housekeeping for elimination of unfavourable working conditions Technologies • EE assessment criteria of financial methods, green concern and complexity Portfolio creation • Portfolio selection of EE projects
• Portfolio management of EE projects
Barrier reduction • Reduction of Institutional, market, organizational and behavioural barriers Models • Focus on continuous improvement
2.3 Literature gap
From the literature review on EE and EM it became clear that a conceptualization and coherent model for an integrated EnMS is lacking (Aflaki, Kleindorfer, & Miera Polvorinos, 2013; Schulze, Nehler, Ottosson, & Thollander, 2016; ISO, 2011). The literature review showed a lacking capturing of real-world implementation practices resulting in a gap between theory and practice. Shortcomings that can be derived from the reviewed models include:
• Lacking specification of model steps: EM models are general in nature and lack an immediate usefulness to identify, select and manage EE projects;
• Lacking assessment criteria of EE projects: Literature shows a need to identify projects on more than financial returns;
• Lack of availability and validated information: Information is in models perceived as very important, however they do not describe what information is needed or how it can be stored and retrieved;
• Lack of empirical validation of models: Most models are tested on a single case, neglecting benchmarking or lacking overall empirical testing;
3
METHODOLOGY
A design science research strategy was chosen based on its aim of using knowledge in an instrumental way to design and implement actions, processes or systems to achieve desired outcomes in practice (van Aken, Chandrasekaran, & Halman, 2016, p. 1). This methodology section explains the research approach that was adopted.
3.1 Research question(s)
Based on the theoretical background and identified gap in literature the research question of this research is:
What energy management model can improve the energy efficiency of a company, taking the gap between theory and practice into account?
The regulative cycle of Wieringa (2009) was identified applicable to structure the design science research. Based on this cycle the following research steps with according sub questions are formulated:
- Diagnosis: Problem investigation
1. What are the current problems regarding EM?
2. Based on these problems, what are necessary elements for EM? - Design: Solution creation
3. Which solution(s) is (are) needed? - Validation: Model validation
4. Would this design, implemented in slightly different contexts, also satisfy the criteria (Wieringa, 2009)?
5. Would this design, implemented in this problem context, satisfy the criteria identified in the problem investigation (Wieringa, 2009)?
3.2 Research Design
A detailed figure of the steps used according to the cycle of Wieringa (2009) can be seen in figure 2. This process involves an iterative process, in which steps are not necessarily sequential and forwarding steps can lead to an adjustment on previous steps taken. The different research design steps are explained in more detail below.
3.3 Diagnosis (Chapter 4): Problem investigation
The initial step in the research, following the theoretical analysis of literature, was the exploration of practice. Several companies were used to identify the problems with EM and identify possible solutions of necessary elements from practice. The diagnosis is complete when sub questions 1 and 2 are answered.
3.3.1 Design problem of Wavin
Via a case company analysis, the current problems of EM were identified and analysed. This involves the identification of stakeholders and their problems and desires. Firstly, the stakeholders that are affected by the design solution were identified. Some problems and desires were already known, however a more in-depth analysis of the stakeholder problems and desires was necessary to get a better understanding of practical needs for EM. Stakeholders were identified based on EE involvement and willingness to participate in the research together with the help of the Sustainability manager from the case company.
Secondly, the identified stakeholders were used to assess the problems and desires for EM within the case company. Both quantitative and qualitative data was used in this identification. Quantitative data was available in the form of financial business cases (BC) and performance, as well as quarterly energy consumption data on factory level. Furthermore, an internal energy audit document reviewing the effectiveness of past EE investments at Wavin factories was used. Qualitative data was gathered via:
• Several meetings and conversations with identified stakeholders from TM level of the head office in Zwolle;
Table 3: Wavin factory characteristics and questionnaire respondents Factory location Factory size* # of EE
projects** Participant questionnaires
1 Baltics Vilnius Small 1 Quality, Environment, Health and Safety Manager, Quality & Environment department
2 Czech Republic Horni Pocernice
(Kostelec) Small 1 Quality & Development Manager 3 Denmark Hammel Big 9 Regional QA/E Manager
4 Finland Joutsa Small 1 Production Coordinator, Production 5 France Novotech
(Serrieres)
Big 7 Responsible Engineer Sorgues
Varennes
6 Germany Westeregeln Big 9 Site Manager, Technical department and engineering
Twist
7 Hungary Zsambek Medium 1 Production & Logistics manager, Supply Chain
8 Italy Santa Maria Maddalena
Small 3 Production Engineer 9 Netherlands Hardenberg Big 8 (H)SE Manager
10 Poland Buk (Arot) Big 6 Quality assurance manager Sochaczew
11 Sweden Eskilstuna Medium 1 Coordinator Quality/TPM Safety/Environment 12 Turkey Adana Big 9 Maintenance Supervisor 13 UK (including
Ireland) Chippenham Doncaster Big 10 Engineering Manager Balbriggan
Note. Participant questionnaire is characterized by position due to anonymity desire; IM = Injection Moulding; EX =
Extrusion.
* Factory size = based on tonnes of production: < 10.000 = small, > 10.000, < 30.000 = medium, > 30.000 = big ** Number of EE projects from 2011
3.3.2 Possible solutions best-practice companies
To identify possible solutions and identify necessary elements from practice a multiple case analysis of best-practice companies was performed. These companies were analysed via in-depth interviews. Seven best-practice companies in different industries and with different energy needs were identified. Companies were selected based on their accessibility of contact persons and the following selection criteria:
• No competitor of case company: due to possible conflicting interests, such as gaining competitor information;
• Green concern: company should have green and good image; this is measured based on the sustainability focus within company via external reporting;
• Active EM engagement: company is actively working on their EM via implementation of EE projects and energy reduction targets.
Selection of the companies on the predetermined criteria can be found in table 4 below.
Table 4: Companies selected for multiple case analysis Companies
Criteria
Construction Paper Food Packaging Chemical I Chemical II Chemical III No competitor • • • • • • • ISO 50.001 • • • • • • Green concern • • • • • • • Active energy management • • • • • • •
The selected companies were contacted for semi-structured interviews. All interviewees were send an interview guide before the interview consisting of an introduction about the researcher, the study goal, a consent form and example questions. The interviews questions were created based on the necessary elements identified from theory (see table 2) resulting in the topics:
• Policy: questions on strategy and development of EnMS;
• Management: questions on energy measurement, employee education and housekeeping;
• Technology: questions on EE projects and the used assessment criteria; • Portfolio creation: questions on PS and management process of EE projects;
• Continuous improvement: questions on applied EM model and focus on continuous improvement in system.
Table 5: Information on interviews, interviewees and code names companies Company Company size Location
interview Function interviewee Contacted via Interviewed on Time interview Construction MNC Baarn Project
Manager CSR
Telephone 07-10-2016 1 hour Paper N Maastricht Manager S&E Telephone 04-10-2016 1 hour Food N Enschede Engineering
Manager
Telephone 17-10-2016 1 hour Packaging N Gemert Production
Manager
Linked-in 04-10-2016 1 hour Chemical I MNC Ijmuiden Program
Manager energy efficiency
Telephone 12-10-2016 1 hour
Chemical II MNC Arnhem Program manager energy efficiency
Email 03-10-2016 1 hour
Chemical II MNC Amsterdam Director
Energy Email 10-10-2016 1 hour Chemical III MNC Heerlen Corporate
Lead Environment
Telephone 06-10-2016 1 hour
Note. MNC = Multinational, N = National
Table 6: Coding Treefor interviews
Topic Sub-theme Description Code Example statement/comment Policy Strategy All statements or
comments that are concerned with the strategy that is executed
SP_STRATEGY ‘Looking at our energy strategy for our team and our organization it involves: cost efficiency because costs matter, reliability because in a chemical company reliability and safety have a high priority, sustainability and ready for the future because the energy market is highly volatile’ (Chemical II)
Management Energy Audits All statements or comments that are concerned with energy audits
SM_AUDIT ‘..visits that we undertake, in the scans that we continuously perform from TM we continuously ask what more can we improve?’ (Chemical I) EE Courses and
Training Programs
All statements or comments that are concerned with education
SM_EDUCATION ‘With trainings we see that operators set machines to 100% capacity, even if required capacity is only 70%. Machines can match that demand and that is something you effectuate with training and capability building’ (Chemical II)
Good
Housekeeping All statements or comments that are concerned with housekeeping
SM_HOUSEKEEPING ‘At home you also don’t leave your window open with the heating on. With that in mind we try to make people aware of energy waste’ (Paper) Technology EE projects All statements or
comments that are concerned with assessment criteria of EE projects
ST_ASSESSMENT ‘..in many cases money has priority over sustainability. So in practice we often choose the cheaper option, taking the TCO into account’ (Construction) Portfolio creation Portfolio selection and management All statements or comments that are concerned with portfolio selection and/or
management
ST_PC ‘Projects must deliver 1,5% reduction together … projects that are not selected are saved and implemented if the selection criteria, i.e. too little manpower, doesn’t suffice and implementation is not possible (at that moment)’ (Food) Barrier
reduction
Barrier identification
All statements or comments that are concerned with barriers
EM_BARRIERS ‘Much knowledge is available internally. At TM level we have a few real technology experts, also at utilities and energy, who are constantly working on projects where they are asked as consultants’ (Chemical III)
Other Other All statements or comments that are concerned with EM other than the topics and sub-themes above
3.4 Design (Chapter 5): Solution creation
Based on the regulative cycle of Wieringa (2009) the next section involves the solution creation. The design is complete when sub question 3 is answered.
Design process
The solution creation steps are displayed in figure 2. Firstly, the already available solutions in theory and practice are analysed. Secondly, the necessary elements from theory and practice were assessed based on the solutions found in theory and practice. After this investigation a new solution is proposed. In this research a model was designed from scratch, however parts from existing models were implemented into the new design. The design of the model was done with a design program called Sketch and the help of an expert (product development designer). This external design expert was used to improve the user friendliness of the model, while no aesthetic characteristics were identified. The design of the model involved much interpretation from the researcher on the gained knowledge from the previous research steps.
3.5 Validation (Chapter 6): Model validation
In the last phase of the regulative cycle of Wieringa (2009), the proposed model was validated. The preferred validation method is via thorough implementation into practice (van Aken, Chandrasekaran, & Halman, 2016). However, due to the limited time of this research implementation into practice is not possible. Therefore, validation is attained via several methods as shown in figure 2.
1. External validity
2. Internal validity
Three stakeholders from TM were used to validate the model. There insights were discussed during three separate meetings. Internal validity was assessed based on the satisfaction of the company desires (found at 4.1.3 Desires) and the overall assessment of practical applicability of the model to the case company.
3. Practical relevance
Practical relevance of the model was determined by applying the model to historical cases within the case company. The Wavin situation of the years 2012-2015 is applied to the different steps in the model. Data is obtained from all previous mentioned data sources in the methodology gathering data at, or about Wavin. If the model is fit for practice, this exercise should yield the following output:
1) Systematic design of EM;
4
DIAGNOSIS
In this chapter a problem analysis of Wavin and a multiple company analysis are performed as explained in the methodology. Findings from both are presented in this chapter.
4.1 Case company analysis
A case company analysis was performed to identify the problems of EM perceived in practice. This section begins with the stakeholder identification resulting in two stakeholder groups of TM and factories. Hereafter, the problems and desires derived from the questionnaires, meetings and conversations were analysed to gain knowledge on the EM struggles of Wavin.
4.1.1 Stakeholder identification
4.1.2 Problems Current EM at Wavin
The business problem as identified by TM is the desire to improve their EE management. The main goal of TM is to reach sustainability targets. The main goal of factories is to meet production demand in the most cost-efficient way (high production efficiency). Current EM involves EE improvement via the implementation of EE projects. This process is displayed in figure 3 below.
Figure 3: Current top management/factory project selection process (own creation)
Identified problems by stakeholders
Based on the conversations and meetings with the TM stakeholders and the questionnaires send to factories many different problems were identified shown in figure 4 below. The problems identified by TM can be categorized as content problems. TM would like to manage and implement a system to structure EE actions. However, they don’t have the time or knowledge on-hand to create and implement this EnMS.
The problems identified by factories are identified as support problems. Most problems identified by companies involve problems caused by required support, resources or management from TM. Therefore, the problem from factories can also be defined as a lacking management support system for the structural design of EE.
4.1.3 Desires
The desires from factories and TM were identified to understand desired improvements from the case company. Important desires identified for the EnMS are:
• Different assessment criteria projects involving for example longer payback, CO2;
• Different budget preferably aligned to project proposals and/or dedicated budget; • Company-wide PM involving assessment and alignment of projects to meet strategy
targets;
• Monitoring of projects throughout their lifetime;
• Energy use measurement via audits/EMS systems with regular reporting; • EM teams on sites responsible for EM;
• Improve strategy with more structured approach, more detailed KPI, agreed EM policy to fulfil all interested parties, more company-wide projects and better focus on EE; • Improve information distribution company-wide via synergies and sharing
best-practices;
• Use external experts in project development.
4.2 Multiple Case analysis
This section identifies possible solutions for the problem identification based via a multiple case analysis of best-practice companies. Based on the necessary elements identified in literature interviews were analysed to assess whether these elements are also deemed necessary by practice. Code names of industries refer to interviewed companies (see Appendix D). Findings are presented below.
4.2.1 Policies
All interviewed companies have a clear strategy often entailing more than a focus on energy as state by the Chemical II Company.
The strategy policies of company’s entail:
• Objectives: ‘developed based on three themes: (1) climate positive: energy and CO2
related, (2) resource positive: focused on circular economy, and (3) enhancing lives: the social aspect of sustainability’ (Construction)
• Goals: ‘Sites report, we have energy roadmaps (multiyear improvement programs), sites report and we monitor progress’ (Chemical III)
• Targets: ‘From the government we are obliged to set a target of 1,5% energy reduction per year, because we are ISO50.001 certified. However, our internal targets are higher and this is done to constantly challenge our organization to improve’ (Paper)
Often companies work closely with EM managers to propose targets for TM and identify the objectives and goals (mentioned 4/7). An important finding is the stressed importance of unified definitions of important EM issues within companies. ‘It is important that all parties contributing to EM understand and know the definitions and scope of the intended sustainability concept’ (Construct).
4.2.2 Management Energy audits
All interviewed companies engage in external or internal audits. Findings on these two kinds of audits are described below:
• External audits
Often undertaken for two reasons: compliance or lacking internal capability to perform an audit. Some companies have an ISO 50.001 quality certificate for EM, which requires a yearly audit (Paper, Chemical III, Paper, Food, Construction). However, it is not mandatory to undertake an external audit to comply, which causes some companies to undertake internal audits (reasons for this given below). The other reason, lacking internal capability, involves the lack of internal personnel qualified and certified to perform audits. This causes some companies to hire an external firm to undertake this (Packaging).
• Internal audits
Seol, & Sarkis, 2009). However, companies also listed reasons of desires to keep the government outside the company (Paper) or release employees of burdens caused by external audits (Chemical I).
However, for the measurement of energy companies, stressed the importance of continuous measurement as a prerequisite for EM. They identified the need of an energy measurement system (EMS), while audits do not provide this constant information. EMSs are used for:
• Identification of high intensity spots within factories to focus on (All); • Evaluation and monitoring of EE projects (All);
• To improve operational efficiency by alignment of energy usage to energy demand (Chemical I, II, III, Construction, Food).
Although all companies supported the need for an EMS, not all companies have implemented one for measurement often due to high costs or difficulty of implementation. From the interviews three categories of systems can be identified:
1. EMS on factory level and often not present at all factories (Chemical II, III, Construction);
2. EMSs on factory level and also on lower machine levels, but dependent on location of machines sometimes only energy usage in lines can be measured (Chemical I, Packaging, Paper);
3. Highly advanced EMS that can measure accurately to the individual machine and provides data till the precision of seconds (Food).
EE courses and training
All interviewed companies supported the need to increase employee knowledge to improve the EE of a company. Means of achieving this can be categorized into two groups of companies. The first group (Chemical II, III, Construction, Paper) believes all company layers should have increased knowledge via courses and training with listed benefits of:
• Improved idea generation from educated personnel; • Improved understanding of EE need;
The second group (Chemical I, Food, Packaging) believes the lowest company layers have no direct influence on the EE of the process or are not interested in knowledge improvement initiatives like courses and training. Main reasons for this are:
• Courses and training are perceived ineffective due to classroom setting;
• Lower-level employees cannot intervene in energy usage of production process.
From interviews it also became clear that the term courses and training as identified by Abdelaziz, Saidur and Mekhilef (2011) is believed to be too narrow to define the different means used in companies to improve employee knowledge of EE. The educational measures fitting to the company culture are autonomous but perceived as important by all companies especially for reduction of resistance. However, a more suitable definition suggested is ‘capability building’.
Good housekeeping
From the interviews it became clear that the theoretical definition used for good housekeeping is inconsistent with the definition from best-practice companies. When asked about housekeeping improvements these companies referred to EE related behavioural changes, like improved awareness. They refer to housekeeping as a mean of comparing the factory to a household to make employees aware of the need to turn of lights/appliances/machines when leaving the factory floor. This is an important awareness creation tool used by companies (Paper, Packaging, Chemical II). The theoretical description of good housekeeping is defined as the elimination of unfavourable conditions in the workplace (Abdelaziz, Saidur, & Mekhilef, 2011). However, in practice this is related to health and safety measures (e.g. clean working spaces/waste removal) and challenging investment requiring projects (e.g. EE lighting). The investment requiring projects are discussed in more detail at portfolio creation below.
4.2.3 Technology
Paper). The findings from the interviews showed that in practice the preferred use of monetary tools as identified by Gasparatos and Scolobig (2012) is supported. However, the desired focus on more than financial returns opted by Aflaki, et al. (2012) is also supported. Due to the disappearance of the ‘easy win’ projects companies are pushed towards creative solutions to make BCs feasible. An overview of the used assessment criteria per company is presented in table 7 below.
Table 7: Criteria assessment of EE project of best-practice companies
Company Business Case
Assessment method (F = financial, G = green concern, C = complexity, O = other)
Subsidies EE project budget Construction F Payback with EE savings (CO2/market price)
Total Cost of Ownership (TCO) of projects NM No G Alignment of projects to targets
C
O Chain initiatives focused on reducing costs at suppliers
Paper F Payback with EE saving (kWh/market price and/or CO2/CO2 credits)
NM No
G
C External parties involves in validating BC O
Food F Payback with EE saving (kWh/market price) NM No G
C Complexity of projects: can it be executed by internal experts
External party used in creation BC if needed O Resource assessment: availability of people, time
and money for implementation project
Packaging F No fixed assessment method: dependent on available resources All projects reviewed by subsidy agency No G C O
Chemical I F Payback with EE saving (CO2/market price) NM No
G
C Impact/Ease matrix to assess envisioned EE saving against ease of implementation (need for external party)
O Creative solutions: financing of projects by supplier
Chemical II F Payback with EE savings (CO2/market price) Not in regular BS:
viewed as bonus
Note: except with
extreme costly projects or non-profitable BCs (e.g. solar panels)
No, but desired G Alignment to strategy and targets
C Assessment of possible successful implementation of project by factory (technological complexity assessment project)
O Creative solutions: quantification of other benefits of EE, e.g. maintenance, labour or batch time
Chemical II F Payback with EE savings (CO2/market price) Important: often
required due to high prices
No G
C
O Creative solutions: co-ownership and co-funding of projects
Chemical III F Payback with EE savings (CO2/internal price on
Carbon of €50,- per ton)
4.2.4 Portfolio creation
From literature it became clear that projects should be selected and managed via portfolio creation (Archer & Ghasemzadeh, 1999; Aflaki, Kleindorfer, & Miera Polvorinos, 2013). Companies showed that this only involves projects that require investments. Projects that require no investment, and have low technical complexity, can be undertaken by factories themselves and require no portfolio creation process. Furthermore, companies show that a portfolio cannot consist of that many projects, max. 10-20, with preferably a maximum of 10 small projects (low cost, low technological complexity) and maximum 3 big projects (high costs, high technical complexity) (Chemical II, III). Chemical Company III views portfolio creation as a stage-gate process. This is believed applicable to the PS stage where different screening gates can be identified between the steps. To create an overview of the different portfolio creation steps the process from Archer and Ghazemsadeh (1999) displayed in figure 1 was used to categorize interview findings presented below.
Project proposals
Idea generation in companies is done via: • Internal:
Top-down via management and technical knowledge and bottom-up via identification of improvements or ideas from factory employees. Examples of idea gathering bottom-up involve energy scans for opportunity identification, sharing of ideas via information systems (IS) and brainstorm sessions with employees (All).
• External:
Via external parties like the government, benchmark companies and company associates. Examples include meetings with branch organizations.
Pre-screening
Findings showed that on factory level governmental laws and regulations and available resources are important in the pre-screening of the projects. Furthermore, companies often undertake initial screening focused on the complexity of a project versus the cost and benefit of the project (Paper, Chemical I, II, Food). Companies often focus on easy projects using project ranking to select feasible projects for further analysis.
Individual project analysis
Projects that ‘survived’ the pre-screening are developed into BCs during the individual project analysis step. For BC developments interviewees stress the importance of:
• Clearly defined definitions of EM related issues (Construction); • Fixed overview of required documents for the BC (all);
• Year calendar for the submission dates of projects (Chemical III).
Companies state that often during the BC development step external parties are involved due to lacking knowledge or time to develop a BC.
Screening
Screening requires identification of assessment criteria that can be found in the previous chapter under assessment criteria.
Optimal portfolio selection
Optimal PS involves the interaction among various projects and represents the eventual portfolio (Archer & Ghasemzadeh, 1999). All the projects that positively underwent the screening can be used in a portfolio. The PS concerns TM and is (often) done via the rating of projects against available resources and targets (Chemical II, III, Food). Budget is a limiting factor TM must also take into the weighing of projects, while the budget cannot be exceeded. Thus, the optimal portfolio is company wide and well-balanced against resources and focused on reaching company targets on EE (Chemical II, III, IV).
Portfolio adjustment
• Monitoring:
Once factories have received the approval on their BCs they can start implementing projects. However, sometimes projects are not suitable for implementation due to unforeseen circumstances causing a reallocation of budget. In companies this involves a re-assessment of the BCs from the earlier step. Often these companies keep a list of spare BCs, which makes it easy to select a new project fit for implementation (Food, Chemical I, Chemical II). The reallocation is not always given to the original factory but often assigned to the next best project. Some companies monitor progress so closely that even after initial project implementation projects can be cancelled or budget can be reallocated to a different project (Chemical III, Food).
• Evaluation:
Evaluation is important to determine the success of the project and identify projects for best-practice sharing. On factory level this is often done by evaluation of the project outcome against the BC and on TM level this involves evaluation of the portfolio against strategy targets. The EMS tool was often mentioned important as a support tool for evaluation (Chemical II, III, Food, Packaging).
• Sharing of best practices:
The evaluation has identified best-practice projects that can be shared with other factories. Companies believe sharing of best-practices is important for organizational learning, employee support for EM and reduction of unnecessary costs via development of same BCs by several factories.
4.2.5 Barrier reduction
Table 8: Barriers and possible solutions identified from interviews
Barriers Mentioned Explanation Solution
Or ga ni za ti on al ba rr ie rs Other priorities
than EE 7/7 Involves the constant battle for priorities with other important company issues like safety and health often lost by EE
TM support Lack of useful
and validated information
6/7 The desire of companies to report and have access to consolidated data. Also important for the company’s desire to sharing information and have sufficient energy measurement data
IS system
Lack of knowledge and skills
5/7 The importance of awareness creation for employees, while they need to understand EE needs in order to implement EE improvement options
Awareness creation via: - Active communication - Active involvement TM - Rewards and incentives - Employee capability building Lack of money 1/7 The struggle of disappearing ‘low hanging
fruit’, while this leaves companies with (often) more complex and costlier EE projects
Different assessment criteria EE projects
Dedicated investment budget
In st it ut io na l ba rr ie rs Governmental regulations and policies
2/7 Expected changes on governmental laws and regulations, but an inability to directly influence this
Dedicated EM-team involved in institutional developments Electricity prices
(kWh) 2/7 Low electricity prices perceived as struggle in creation of feasible BCs for EE projects
4.2.6 Other
This section entails all findings from the interviews of often mentioned statements that were not identified by literature. Findings include the categories: continuous improvement, IS, external parties and responsibility.
Continuous improvement
All companies focus on continuous improvement and regular updating their EM strategy. Companies using a governmental EnMS focused on the ISO50.001 standard move slowly through the regulative continuous improvement cycle (Paper, Packaging). Companies with a more constant improvement focus more on the Kaizen approach proposed by Aflaki, et al. (2013). They identify the EMS as an important tool to achieve this (Chemical II, III, Food, Construction).
Information system
• Knowledge sharing of EE;
• Awareness creation through communication, capability building and transparent information.
External parties
Companies believe that ‘consultants will not be the answer’ (Chemical III) or ‘consultants cannot outweigh our own knowledge’ (Chemical II). Literature opted for an increased involvement of external parties in EM needed to develop potentially more beneficial projects (Aflaki, Kleindorfer, & Miera Polvorinos, 2013; Schulze, Nehler, Ottosson, & Thollander, 2016). However, in practice, external parties’ involvement is only used for:
• Support:
Used to generate ideas for improved and new EE projects or for the development of parts of an EE project BC.
• Benchmarking:
Used for benchmarking to determine improvement opportunities for the companies. • Validation:
Validation of information, quantitative or qualitative, by external data specialists for external reporting purposes.
Responsibilities
Dividing responsibilities is important in EM. All companies have created EM teams responsible for EE improvement. These factories all have an EM team at TM level, but only some companies have a dedicated team where EM is their main job function (Chemical I, II, III, Paper, Construction). Other companies have adopted EM as a relative big part of their responsibilities, but have broader job responsibilities (Food, Packaging). All multinational companies with different factories also stated the existence of EM teams at factory levels (Chemical I, II, III, Construction). At factory level none of the EM teams are dedicated to EE. In practice, the difference in decision-making between TM and factory level involve:
• Authority towards investments where the required authority is related to the desired budget (all);
• EE project implementation where all companies identify factories responsible for actual implementation of projects and some companies provide support by their TM EM team in the implementation of the project (Chemical I, II, III, Food).
4.3 Necessary elements from practice
Table 9: Necessary elements from practice (additional to elements derived from theory) Policy • Definitions of all EM related issues
Management Actions of:
• EMS for continuous energy measurement • Capability building of employees
• EE housekeeping as a tool for awareness creation Technologies • EE project assessment criteria of:
- Financial: payback involving EE savings (focus on CO2 reduction)
- Green concern: alignment of projects to targets
- Complexity: external party involvement (ease of project) versus cost/EE saving Portfolio creation • PS:
- Idea generation = internal (bottom-up and top-down) or external - Pre-screening = compliance, resources, complexity versus costs - Individual project analysis = BC development
- Screening = project assessment criteria
- Optimal PS = focused on assessment criteria weight against available resources and filled to fit budget and reach targets
- Portfolio adjustment = PM
• PM: monitoring and evaluation of projects against BC and targets, and sharing of success Barrier reduction • Institutional barriers:
- Governmental regulations and policies - Electricity prices
• Organizational barriers: - Other priorities than EE
- Lack of useful and validated information - Lack of knowledge and skills
- Lack of money
Models • Continuous improvement
Other • Information system as key support tool
• External party for support, benchmarking and validation
5
DESIGN
This section involves the design of the EM model as explained in the methodology. The goal of this chapter is to assess solutions available in theory and practice, identify whether these solutions need to be adapted based on the identified EM model elements and eventually the design of the model. This chapter ends with an explanation of the designed model.
5.1 Assessment available solutions in theory and practice
This paragraph gives an overview of available EM models. Models were identified from theory and practice, but only alternatives that satisfy most necessary elements are given.
EM models in theory
As described in the theoretical background there already exist EM models in literature. However, it also became clear that most of these models are too broad and vague to fit practical needs. From the literature and case company’s necessary elements for an EM model were listed. The reviewed EM models from literature showed that the conceptual framework developed by Schulze, et al. (2016) satisfies most of these provided elements. However, as became clear from the identification of future research implications this model does not fit all desires of companies. This specific EM model was not used to form the basis for the design, but useful elements were taken into account in the process of designing the solution. From both theory and practice the importance of portfolio creation became clear. The reviewed model in the theoretical background involved the PS process from Archer & Ghazemsadeh (1999) (figure 1).
EM models in practice
To identify necessary elements for EM models several companies were interviewed on the implementation of EnMS in their company. Two companies are relevant to mention for their effective EnMSs: Chemical Company II and Chemical Company III.
create employee awareness. They also use this platform to manage performance of factories and projects on improved EE.
The second company is Chemical Company III, which also has an EnMS way ahead of the one present in Wavin. Within this company no specific EM model is described for the management of the overall process. They use a stage-gate model for the selection of EE projects. They also identified there IS as an important tool for the effectiveness of their EM and use this tool for the management of EE projects.
During the interviews it became clear that the representatives of these two companies identified the use of project management for EE projects, but had no comprehensive EM model for their complete system. Other interviewed companies often used the PDCA-cycle and adapted this to fit the individual needs of the company. However, often this model was more used as a guideline rather than an actual EnMS.
5.2 Necessary elements
Table 10: Combined necessary elements from theory and practice Policy Strategy with:
• Objectives • Goals
• Targets with according KPI • Definitions of all EM related issues Management Energy measurement:
• Energy audits (internal/external) • EMS for continuous energy measurement
Tools for awareness creation (for organizational barrier reduction): • Capability building
• Good housekeeping Technologies EE project assessment criteria of:
• Financial: payback involving EE savings (focus on CO2 reduction)
• Green concern: alignment of projects to targets
• Complexity: external party involvement (ease of project) versus cost/EE saving Portfolio creation Portfolio selection of EE projects:
• Idea generation = internal (bottom-up and top-down) or external • Pre-screening = compliance, resources, complexity versus costs • Individual project analysis = BC development
• Screening = project assessment criteria
• Optimal portfolio selection = focused on assessment criteria weight against available resources and filled to fit budget and reach targets
PM of EE projects:
• Monitoring projects
• Evaluation of projects against BC and targets • Sharing of success
Barrier reduction Institutional barriers of governmental regulations and policies and electricity prices. Reduction via: • Focus on company environment
Organizational barriers other priorities than EE, lack of useful and validated information, lack of knowledge and skills and lack of money. Reduction via:
• TM support • Awareness creation • Information system • Dedicated budget for EE
• Different assessment criteria than financial Models • Focus on continuous improvement Other Information system as key support tool for:
• Storage of information • Transparency of information • Sharing of information • Reliability of information External party for:
• Support • Benchmarking • Validation
Clear levels of responsibility and authority: • Appointment of EM team/manager
5.3 Design of the model
fit all elements supporting the need to design a new model. The process of this design is described below.
The main process
From the findings it became clear that the main structure of the model should involve a process. This statement is mainly based on the required continuous improvement and re-occurrence of the same EM steps. Theory and practice findings resulted in the main steps identified as:
- Strategy development;
- Creation of EM team (with manager); - Energy measurement;
- Portfolio selection; - Portfolio management.
The model of Archer and Ghazemsadeh (1999) was identified as a suitable model to describe the different PS steps, while the broadness of the model leaves enough room for adaptation of the model to fit an EM process. However, an exception on the original model design is viewing the project proposals as part of the main process and the (pre)screening as stage-gates rather than complete steps in the process. A supporting and important tool identified present in best-practice companies, but not mentioned clearly in models from theory, is an IS. This should also be integrated into the main process of the model and is directly linked to all process steps. EM conditions
5.4 EM model
Based on the previous steps the model was designed. The result is displayed in figure 5 below. The remainder of this chapter explains the conditions and the different process steps of the model.
5.4.1 Conditions
This model reduces uncertainty via the identification of barriers and the reduction of these barriers. This is viewed as an important condition for an effective EnMS and the different means to accomplish this are explained below.
Institutional barriers involve barriers: Governmental Law and Regulations, Electricity prices and Gas/fuel prices. All of these barriers are outside the company’s scope and must, therefore, be acknowledged, but cannot directly be resolved. A solution for improved reduction of this
TM support aims at reducing the barrier ‘Other priorities than EE’. TM is listed as an important condition for EM and is the driver of EM. Actions of TM should involve:
• Priority setting of EE;
• Development of strategy with target setting and communication of target top-down; • Making resources available for factories to engage in EM, e.g. time, money, manpower,
knowledge;
• Involvement in employee awareness creation via active communication and previously mentioned providing of resources;
• Stimulation of EM via proper incentives and rewards for EE improvements.
Employee awareness focuses on reduction of the barriers: Lack of knowledge and Culture. Behavioural changes are perceived as very difficult in EM, but also as a determinant of success. In order for employees to engage in EE, they must first understand the importance of EE. This can be done via awareness campaigns. Hereafter, employees can be triggered by easy wins that cause little savings on individual level, but big savings on collective level. This involves the improvement of behaviour of employees at the workplace to match that shown at home. The goal is improved EE related to household savings like turning of lights, heating and machines when leaving the work space. Another awareness creation possibility involves capability building of employees. This involves improved education of employees on EE. Examples include training of operators to adapt machine energy use to match production requirements.
5.4.2 Process
Strategy and responsibilities
Based on an initial energy measurement or predetermined targets TM should create a strategy. This strategy should be long-term, preferably over a period of 5 to 10 years and focused on footprint management. It should entail the following:
• Objectives; • Goals;
• Targets with according KPI;
• Definitions of all EM related issues.
