Energy Efficiency: Is Interest in the Boardroom translating into Action in the Boiler Room?
April 21, 2008
Posted by: johnsoncontrols 09:08 PM
By Clay Nesler
It is difficult to ignore the stories about energy prices, energy independence and climate change that blanket the front pages of newspapers and crawl across the bottom of our TV screens. It shouldn't surprise us, then, that executives are paying increased attention to energy management, as demonstrated by the second annual Johnson Controls Energy Efficiency Indicator survey, released in mid April.
According to the U.S. Department of Energy, commercial buildings consume 40% of all natural gas and 60% of the electricity produced in this country. And according to "The Case for Investing in Energy Productivity," a new report from the McKinsey Global Institute, squeezing more productivity out of the energy that industries, homes and vehicles consume is the most economical way to stifle rising energy demand and control the output of planet-warming gases.
We initiated the Energy Efficiency Indicator survey of energy management decision-makers last year because we wanted to know if and how organizations were adjusting their operations in response to rising energy prices. On a number of fronts, we saw quite a bit of movement from 2007 to 2008. Nearly three-quarters of businesses are paying more attention to energy efficiency than they were just a year ago. That's up from the 62% in 2007.
We also saw an increase in the importance being attached to energy management. Today, one in five regards energy management as extremely important. In 2007, only 15% felt that strongly.
Businesses expect energy prices to continue to rise, but it may be that the full impact of risings costs has yet to be felt. In last year's survey, 79% said they expected energy costs to rise, and the average increase was anticipated to be 13%. However, according to the Energy Information Administration, commercial natural gas and electricity prices were relatively flat last year. (In this year's survey, 80% of respondents said they believe natural gas and electricity prices will rise over the next year. On average, the expectation is for prices to rise 14%.)
Despite expectations for rising energy prices, plans for investment in energy efficiency remained constant from 2007 to 2008. There is a trend, however, toward more significant energy efficiency measures including replacing inefficient equipment before the end of its useful life (41%, up 13% from 2007) and switching to energy efficient lighting (78%, up 11%). Also, 88% claim that energy efficiency is a design priority in construction and retrofit projects, up 11% from a year ago.
While cost has been the historic driver of energy efficiency investments, environmental responsibility is gaining ground as an additional motivator for energy efficiency investments. For 53% of respondents (up 5%), environmental responsibility is an equal or greater motivator than cost reduction for investing in energy efficiency. Seventeen percent cited environmental responsibility as the stronger motivator, up from 13% in 2007. Thirty-six percent (about the same as last year) said they were equally motivated by environmental responsibility and cost savings.
For the first time, the Johnson Controls Energy Efficiency Indicator probed deeper into how environmental and financial factors influenced energy efficiency decisions. We found it compelling that many companies are considering energy efficiency, renewable energy and green buildings as strategies to address environmental sustainability.
• 28% feel climate change has an extremely or very significant influence on their energy efficiency investments and 31% said it was somewhat significant.
• 39% think that significant legislation mandating energy efficiency and/or carbon reduction is extremely or very likely
• Nearly one-third (31%) believe that green buildings will be extremely or very important in attracting and retaining future employees.
• 34% plan to have new construction projects certified to a recognized green standard while 20% plan to certify existing buildings after retrofit. An additional 59% plan to include at green elements in future retrofits.
• 38% said they were including or considering solar electric (PV) technology in new construction or retrofit projects while 24% were also considering solar thermal.
Cost control has always been a boardroom issue and energy efficiency has proved to be an effective improvement strategy for decades. With increased organizational focus on environmental responsibility, it will be interesting to see if energy efficiency garners more strategic attention and investment in the coming years. We intend to continue monitoring and reporting on these important trends.
A complete report of the Johnson Controls Energy Efficiency Indicator research results is available by clicking on this link.
Energy Efficiency and Business – Who Cares, What Are They Doing, and Why
April 07, 2008
Posted by: johnsoncontrols 03:35 PM
An invitation to participate in a webcast announcing the Second Annual Johnson Controls Energy Efficiency Indicator Survey.
(Click here to register for webcast Monday, April 14, 2008 - 10:00 a.m Central)
Clay Nesler
Vice President, Global Energy and Sustainability, Johnson Controls, Inc.“Oil Surpasses $100+ a Barrel!”
It’s a common headline that sparks anxiety. But, does it spark anything else? The high price of energy is obviously having a profound effect on household budgets, discretionary spending and consumers’ psychology.
But what about businesses and other organizations – have rising energy prices affected any significant change in their operations, or in the ways in which they view investments in energy efficiency? Because if they have, it could conceivably contribute to long-term economic growth.
That’s what we’re trying to determine with our second annual Johnson Controls Energy Efficiency Indicator survey. We commissioned the first research in 2007, focusing on the ways in which companies and organizations in North America were responding to rising energy costs, what sort of payback they expected from investments in energy efficiency, to what extent investments in energy efficiency were motivated by concerns about the environment versus economics, and more.
Last year the research showed that just over half – 52 percent – of the executives surveyed said cost savings were either entirely or somewhat the driver for their decision to invest in energy efficiency measures. Thirty-five percent said cost savings and environmental responsibility are equal motivators, and 13 percent cited environmental concern as the greater motivator.
This year we added a few more questions to the survey. We wanted to look more closely at the drivers of energy efficiency investments: What role does awareness/concerns about climate change play? How important are government incentives?
We also wondered whether higher energy costs are making businesses take renewable energy sources more seriously, and whether a desire to be certified “green” by a third-party organization is having an impact.
In response to these provocative questions, we received appropriately thought-provoking answers. We’re going to be announcing the results during a Webcast on April 14 at 10 a.m. Central. In addition to reporting the research findings, the Webcast will feature a panel discussion moderated by Joel Makower, co-founder and executive editor of Greener World Media, Inc. He’ll discuss the findings with executives from different sectors who will describe the methods they are incorporating to help cope with rising energy prices, the operational and investment changes their organizations have made and plan to make. The panelists include:
· Michael Feldman, deputy managing director of the Seattle-Tacoma Airport, which is aiming to be one of the greenest airports in the world
· Stuart Carron, director, global facilities and real estate, for JohnsonDiversey, a manufacturer of industrial cleaning products that has strived to become more environmentally friendly
· Steve McGuire, environmental marketing manager for Philips Lighting, a company that has helped pioneer more energy efficient lighting.
Their discussion promises to provide insights and even lessons about how to thrive in the face of rising energy costs. Please join us. Click here to register for this free Webcast, or go to http://www.videonewswire.com/event.asp?id=46411®d=n
