Poster 7: why choosing energy efficiency can be like choosing to take medicine

Posted by on May 20, 2022 in My Book | 0 comments

Every day this week I am uploading a poster taken from the contents of my book on energy and resource efficiency – to help fellow practitioners communicate the benefits and processes that will unlock value in their organizations and sustain change.

This is Poster 7 describing why some aspects of energy and resource efficiency (such as behavior changes) are a tough sale and how to improve the probability of success.

Economists categorize some goods like medicines as “credence goods”. Simply put, you take a medicine because you trust your doctors (their advice has credence). You can’t “sample” the medicine in advance of making the decision (in which case it would be an “experience good”) nor can you do detailed research to quantify the precise results the medicine will have on your specific condition (in other words it is not a “search good”).

Typically sectors that supply credence goods are strongly regulated in order to protect the public (such as medicines or legal services). If they are not regulated (e.g. car servicing) then these sectors often have a bad reputation (how many times have you felt that you’ve been sold something unnecessary by a garage?)

My book goes into a lot more depth on this issue and give practical advice on how package and pitch a efficiency program where some of the benefits cannot be quantified fully in advance.

See my first comment below for details of how you can download the text of the book free of charge or follow the link in the poster (the number in the poster file refers to the chapter and illustration in the book). Enjoy! Sharing and Feedback most welcome!

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Poster 6: People and activities in an energy and resource efficiency program

Posted by on May 19, 2022 in Uncategorized | 0 comments

Every day this week I am uploading a poster taken from the contents of my book on energy and resource efficiency – to help fellow practitioners communicate the benefits and processes that will unlock value in their organizations and sustain change.

This is Poster 6 summarizing the People and Activities in an energy or resource efficiency programme following the my 3M’s methodology (see Poster 1).

This starkly dispels the conventional notion that energy / resource efficiency are an engineering problem. In fact ‘Business Management’ (aka operational or line management) is the role that has most contact points in the process.

Clearly the emphasis will change from organization to organization. You can use this approach when considering your own efficiency efforts. List the task you need to accomplish on each row, and then identify the roles which are critical to its success in the columns. You may be surprised at the results!

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Poster 5: Funding for efficiency projects

Posted by on May 18, 2022 in Uncategorized | 0 comments

Every day this week I am uploading a poster taken from the contents of my book on energy and resource efficiency – to help fellow practitioners communicate the benefits and processes that will unlock value in their organizations and sustain change.

Today is day 5 and I am providing a poster summarizing the sources of funding for energy and resource efficiency.

Far too often “we don’t have the money” is cited as an excuse for inaction. And yet, energy and resource efficiency improvements often yield returns much greater than businesses expect from core investments or individuals would get from their savings.

In Chapter 18 of my book I explore many different options to fund projects, their pros and cons and how to choose amongst them. You may be surprised to learn that it is often not money that is the problem, it is being able to unlock money.

Taken together with Chapter 17 on Financial Analysis, I hope to equip the reader with the ability to make a powerful and compelling business case for investment now.

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Poster 4: Mineral Scarcity

Posted by on May 17, 2022 in Uncategorized | 0 comments

Every day this week I am uploading a poster taken from the contents of my book on energy and resource efficiency – to help fellow practitioners communicate the benefits and processes that will unlock value in their organizations and sustain change.

Today is day 4 and I am providing a poster showing World Mineral Scarcity taken from the National Minerals Information Centre 2016 report.

The table is sorted by reserve years. It is interesting to note that many minerals that folks seem to get all worked up about here on LinkedIn, such as Lithium, Cobalt and Rare Earths are actually not as scarce as one would think with Reserve Years of 371, 60 and 1,273 respectively. There are however problems with most of these minerals (indicated by the red cells) such as low recycling rates in some cases (Lithium < 1%), high US import reliance (60%, 68% and 100% respectively) and production concentration (China had 90% of the Rare Earth production in 2016).

It is important to understand where supply chain risks lie. My book goes into more details, such as the fact that some of these minerals are only extracted as a byproduct of other extraction, so the picture is more complex.

See the sidebar to the right to download your free copy of the book.

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Poster 3: Measurement & Verification

Posted by on May 16, 2022 in Uncategorized | 0 comments

Every day this week I am uploading a poster taken from the contents of my book on energy and resource efficiency – to help fellow practitioners communicate the benefits and processes that will unlock value in their organizations and sustain change.

Today is day 3 and I am providing a flowchart to enable folks to select the most appropriate Measurement and Verification (M&V) technique.

Attracting third-part funding or investment into energy efficiency measures requires us to be able to unambiguously assess the savings that have been made, out of which the repayments are usually taken. This involves being able to calculate what is known as the “counterfactual”, i.e. what would have happened if we hadn’t made the investment.

Fortunately some clever folks at the IMVP, FEMVP and Investor Confidence Project have developed formal methods to undertake these calculation.

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Poster 2: Return on equity

Posted by on May 15, 2022 in Uncategorized | 0 comments

Every day this week I am uploading a poster taken from the contents of my book on energy and resource efficiency – to help fellow practitioners communicate the benefits and processes that will unlock value in their organizations and sustain change.

Today is day 2 and I am illustrating how energy and resource efficiency can improve ‘return on equity’ for shareholders:

DuPont Formula: Return on equity = net profit margin * asset turnover * financial leverage

Net profit margin: It is obvious that we can make money if we increase our profit margin on every item we sell, for example by using less energy….

Asset turnover: We can also make money by producing more items from our existing plant, i.e. if we are more productive, for example by increasing capacity through greater efficiency.

Financial leverage: Shareholders can make a greater return if someone else (e.g. a bank) pays for the investment in equipment. However too high a leverage will lead to a worry about the company’s ability to service the debt. An example here is that a highly efficient building will get better tenants which will lead to better ‘covenant terms’ so the landlord can get a higher mortgage…

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Poster 1: The 3M’s method

Posted by on May 14, 2022 in My Book | 0 comments

Every day this week I am going to upload a poster taken from the contents of my book on energy and resource efficiency – to help fellow practitioners communicate the benefits and processes that will unlock value in their organizations and sustain change.

Today is an overview of the activities and tasks in my 3M’s methodology for energy and resource efficiency – Mandate, Method and Momentum.

You can download the book by following the link in the sidebar to the right. Enjoy!

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