Cost-benefit analysis of energy management systems implementation at enterprise and programme level

Panel: 3. Energy management: The nuts and bolts

This is a peer-reviewed paper.

Authors:
Marco Matteini, Vienna International Centre, Austria
Giorgia Pasqualetto, United Nations Industrial Development Organization, Austria
Ana Petrovska, Regional Environmental Center, Macedonia

Abstract

Improving energy efficiency of the industrial sector is fundamental to decouple economic growth from the negative environmental and climate change impacts of industrial development and increased energy consumption.

Energy management systems (EnMS) and standards represent proven technical-management tools and policy instruments to advance sustainable energy efficiency in industry as well as other sectors. EnMS in line with ISO 50001 offer industrial enterprises a systematic approach to identify and tackle opportunities for energy savings and energy performance improvement, setting a framework to drive and sustain improvements over time.

Despite a substantial and growing evidence of the operational, economic and environmental benefits of EnMS implementation in industry and other sectors, there are very limited methodological approaches to the analysis of costs and benefits of EnMS implementation, both at enterprise and programmatic level.

Building on existing literature as well as on the experience of the UNIDO‘s EnMS Capacity Building and Implementation Programme, this paper presents a methodological approach to perform a comprehensive cost-benefit analysis of EnMS implementation, to help build a stronger business case for EnMS implementation vis-à-vis industrial enterprises as well as policy makers.

Costs categories considered include cost of staff time for training and EnMS implementation activities, cost of external expert assistance, cost of additional energy performance monitoring equipment, and expenditures for no- and low-cost energy efficiency projects.

Benefits considered include energy related savings deriving from no- and low-cost energy management/efficiency measures, as well as non-energy benefits. Costs and benefits are compared through a payback time function. Two companies and one programme case studies from UNIDO’s Programme in the FYRO Macedonia are used to illustrate the methodology and results.

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