In a recent Linkedin poll, I asked the question: “what do you think is the biggest challenge organisations are facing in achieving their decarbonisation objectives?”
The highest ranked answer was “seen as too capital intensive” (33%), followed by “limited expertise in-house” (31%) and “not sure where to begin” (26%).
Later, while researching for a webinar on ISO 50001, an internationally recognised Energy Management System (EnMS) standard which integrates energy efficiency into management practices and helps organisations to evaluate and prioritise the implementation of new energy efficient technologies, the three main reasons cited for organisations not implementing an ISO 50001 EnMS were:
- Cost and resource constraints
- Lack of awareness and understanding
- Resistance to change
What struck me was how similar these reasons were. This was reinforced again in a recent conversation with a client about a possible investment in an energy management information system (EMIS) – an IT system to manage energy data.
Of the locations being considered by the organisation for the initial roll-out, the site with the greatest need required the most capital and had the least in-house expertise, hence the greatest risk and uncertainty.
It’s clear that the decarbonisation conundrum boils down to a trade-off between three factors: cost, uncertainty and lack of expertise.
The value of an energy management information system
Mining companies are typically quite risk adverse. The energy savings which would normally justify the investment in an EMIS, can only be realised by using the data from this system to effectively manage energy.
The EMIS itself does not provide the energy saving; it requires in-house expertise to review and assess the data and make operational decisions to improve a mine’s energy performance.
For example, when companies conduct a feasibility study to replace an old, inefficient compressor with a more efficient model, they can accurately calculate the expected energy cost savings to justify the investment.
However, for the EMIS, expected energy cost savings are intangible and are based, initially at least, on savings indicated in published literature.
Very few mining companies have an EMIS in place to help them effectively manage energy and, in turn, reduce greenhouse gas (GHG) emissions. Most would consider spending a large amount of money for a system to show how much energy a site is using, along with the associated GHG emissions, an inefficient use of valuable capital dollars.
The value of an EMIS is only realised when the data is used to effectively manage energy consumption. However, many operations do not have the energy management expertise in-house to do that.
Without this expertise, miners have two options: spend the money on a system that will not provide the required outcomes, or don’t invest and shelve the idea.
Balancing cost, uncertainty and expertise
There is a solution. This involves making two decisions:
- A decision to integrate energy management practices into day-to-day operations, where employee engagement and awareness, as well as the energy aspects of operations, including maintenance, procurement, projects and finance are incorporated. This is more commonly known as an EnMS.
- A decision to hire a person whose sole responsibility is to manage energy and GHG emissions. This is a key enabler for the success of the EnMS. This may increase staff headcount and be an additional expense, but if energy is a significant percentage of a mine’s operating expenditure, the energy cost savings will easily justify the expense.
Let’s look at the EMIS scenario above in terms of these two decisions.
First, the company would have the expertise and systems to use an EMIS to effectively manage its energy, improve energy performance, reduce energy costs and, in turn reduce GHG emissions.
An energy manager could support in specifying the requirements of the EMIS, instead of relying on someone who has no expertise in energy management. These decisions would facilitate the ability of the EMIS to provide the outcomes the mine is looking for.
Second, to address the risk aspect of the capital investment in an EMIS, the capital application request should ideally include the implementation of a system to integrate energy management practices into the day-to-day operations, as well as the hiring of an energy manager, as a risk mitigation strategy.
This EMIS scenario could be applied to a whole range of initiatives intended to help the organisation achieve its decarbonisation objectives.
Time is running out
With 2030 and 2050 decarbonisation objectives fast approaching, it’s imperative that mining companies find a way to solve this decarbonisation conundrum, or risk missing important corporate targets.
Ultimately, this requires organisations to make two decisions, which are low-risk, relatively low-cost and carry a high probability of success. There is very little to lose and a great deal to gain.
Andrew Cooper is a senior consultant at SYNERGISE and an expert in the implementation of various energy management systems to help companies achieve their sustainability goals by enhancing energy efficiency, reducing GHG emissions and engaging employees in the process. To continue the conversation, connect with Andrew on LinkedIn