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Wednesday, 8 April

Not Rocket Science Says Kirk

Think of Energy and Maintenance as two cogs in an operational machine, writes Stuart Kirk. In order to function, these two parts work in opposing directions. The machine will perform, yet any misalignment and the consequences can be disastrous...especially when performing at speed.

The above scenario is often the case unless a combined strategic plan is put forward which combines energy and maintenance in one budget.

 

Savings lead to increased costs

When businesses feel the strain and review operational costs, it is often the case that energy efficiency projects are suspended and maintenance routines are reduced to statutory, critical and health and safety routines. This means that energy consumption starts to increase due to the wear and tear underperformance of assets; system controls get ignored; and reactive maintenance call outs start to increase. This all leads to an increase in operational costs when the original intention was to reduce them.

 

Cheap parts

Feed in the third opposing force of value engineering on construction projects and the end result can, again, be disastrous. Building systems are bought cheaply with shortened warranties, higher running costs, more demanding maintenance requirements and a shorter life expectancy.

 

On yer bike

We have seen examples of operational cost reviews working in a far more cohesive way. Now think of energy and maintenance as two wheels on a bicycle. Still turning but now working together, at the same pace and to create maximum efficiency.

By using energy consumption analytics, we can determine the opportunities for behaviour change, technology implementation and procurement opportunities. However, we can also affect the efficiency of maintenance. Looking at the planned maintenance routines on critical and high energy using assets and ensuring they run at optimum efficiency. This will not only preserve warranties and provide better running times but also reduce reactive maintenance costs and tailoring planned visit schedules to assets as necessary.

 

Client versus contractor

Energy consumption can be a valuable quantum to determine the value of planned maintenance efficiencies. The great challenge is faced on fixed price maintenance contracts. The client is responsible for paying the energy bills, yet the contractor has to service the equipment to a level that meets legal and operational requirements, whilst trying to achieve profit. By allowing good energy management to work between the client and the contractor as a mediator for best practice, the savings for each party can be maximised. Furthermore, if energy efficiency projects are actually delivered by maintenance contractors rather than third parties due to a perceived lower capital cost and greater return on investment, the integration of that project is far smoother, is more manageable from a warranty and asset labelling perspective and can be fully evaluated before implementation and validated post completion.

 

Capital investment

Finally, we have the competing forces for capital investment within a business. Again, budgets are often squeezed from construction activity and maintenance asset replacements. When operational costs are then challenged, energy efficiency is allocated capital to immediately reduce consumption and cost. However, if the bigger picture is considered, the allocation of capital is better spent on improving the efficiency of new assets and often to replace existing assets beyond economic repair. The return on investment when applied to the increased efficiency over the increase in capital cost often leads to a greater IRR and shortened return on investment than any individual project. Yes, energy efficiency does have its place, but installing additional equipment such as voltage optimisers before optimising the existing assets and replacing underperforming assets is the wrong approach. All this does is add to the list of kit to maintain!

By Stuart Kirk, COO - Circle Green

 

Article written by Stuart Kirk

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