What is energy management?
And how it works?

Learn about how energy management helps businesses to monitor and optimize energy consumption to reduce energy costs.

What is energy management?

Energy management is the proactive and systematic monitoring, control and optimization of an organization’s energy consumption to conserve use and decrease energy costs.

Energy management includes minor actions such as monitoring monthly energy bills and upgrading to energy-saving lightbulbs. It can mean more extensive improvements like adding insulation, installing a reflective roof covering or improving HVAC (heating and cooling) equipment to optimize energy performance.

Energy management also includes more elaborate activities, such as creating financial projections for commissioning renewable energy services and making other improvements for clean energy consumption and reduced energy costs in coming years.

More sophisticated energy management programs take advantage of technology. For instance, utility tracking software predicts future energy usage and plans energy budgets, which helps a company’s strategic decision makers ensure its energy management strategy correlates with its objectives and financial planning. Enterprise management software uses IoT, advanced connectivity and big data, allowing a corporation to take advantage of energy data analytics for better facility management, and helps with energy consumption and energy management challenges.

Why energy management programs are important?

Around the globe, there is a great need to save energy, which impacts prices, emissions targets, and legislation that affects us all. Not only can energy management help reduce the carbon emissions that contribute to global warming, it also helps reduce our dependence on increasingly limited fossil fuels.


According to energystar.gov , energy use is a U.S. commercial office building’s single largest operating expense. It represents about a third of an enterprise’s typical operating budget and accounts for almost 20% of the nation’s annual greenhouse gas emissions. Energy StarÒ says office buildings waste up to one-third of the energy they consume.

Energy management is even more important in Europe, where the energy supply is especially vulnerable to cyberattacks. This is because, on average, EU corporations invest 41% less on information security than American companies. European companies, therefore, need more initiatives that implement energy security solutions and help them safeguard data, access and networks.

How corporations benefit from energy management programs?

In addition to helping mitigate global problems that result from carbon emissions, energy management programs also bring benefits to corporations.

Having energy management software in place helps control a corporation’s budget and reduce the risk associated with energy price increases that can impact a business’s ability to operate. Tracking utility costs and energy efficiency allows corporations to budget more efficiently and gain better insight into overall operational costs. According to Energy Star, decreasing energy use by 10% can lead to a 1.5% increase in net operating income

Energy monitoring and management not only brings cost savings to a company’s bottom line through decreased usage and consumption but can also mean reduced reliance on sometimes volatile supply chains. Energy management programs can also help companies lower costs through competitive procurement.

Energy management and ESG

Having a strong environmental, social and governance (ESG) foundation helps companies save energy, increase transparency and work toward better sustainability goals.

Energy management solutions that use a single system of record to reduce energy use, cost, time, and the burden of reporting allow clients to manage the impact of environmental risks, identify efficiency opportunities and assess sustainability risks, thus focusing on ESG strategic outcomes.

Besides saving energy costs and lowering carbon emissions, reducing your company’s carbon footprint also shows the company’s commitment to the environment, which promotes an image of greater sustainability and advocating for green energy. Reducing greenhouse gas emissions leads to having, and being recognized for, greater corporate social responsibility.

A strategic approach to consulting with sustainability experts on your sustainability strategy and roadmap leads to the most effective energy and ESG management. In addition to other benefits, consulting on efforts that can include decarbonization and transition to renewables can also help your business attract new and often younger employees who value the optimization of sustainable energy and renewable energy use and take corporate social responsibility seriously.

Intelligent asset management creates energy efficiency for buildings, supply chain and manufacturing

Intelligent asset management can create energy efficiency for a number of industry use cases. Some of these include:

Buildings:  Managing energy in your offices, factories and other facilities helps save energy and reduce carbon output in various ways. Intelligent asset management uses technology such as AI, IoT, and analytics to help you inspect and monitor a building’s efficiency, calculate potential impacts to the grid, anticipate failure and better plan maintenance procedures. Companies using this technology can increase their productivity and make their facilities more energy-efficient, reducing emissions, mitigating climate risk and extending asset lifecycles. They gain operational insights into clean energy sources, efficient waste management and decarbonization.

Sustainable supply chains:  Using AI and blockchain, intelligent supply chain automation can help reduce the impact that current supply chain weaknesses are having on your business. A more resilient, sustainable supply chain allows clients to act quickly and confidently and mitigate disruptions. Measuring Scope 3 emissions—indirect emissions not caused by a company directly but occurring within its supply chain, from warehousing, transportation and waste operations, among other areas—gives companies a competitive advantage in terms of sustainability. While Scope 3 emissions are out of a company’s direct control, measuring them identifies emission problems in their supply chain and allows them to perhaps affect change. Compared to Scope 1 (direct emissions) and Scope 2 (indirect), Scope 3 emissions generally represent the highest levels of greenhouse gases.

 Manufacturing: Manufacturing facilities burn a lot of fossil fuels and are some of the largest energy consumers. Creating an energy management program to sustainably reduce energy use for manufacturing includes collecting and analyzing energy efficiency data (from various meters, databases and multiple plant sites) and creating a project management plan. A more IT-based factory floor that utilizes the Industrial Internet of Things (IIoT) and analytics means better predictive maintenance and quality, which leads to smarter manufacturing. Case studies show that changing energy consumption patterns in manufacturing requires management personnel committed to reducing energy use because it requires change, infrastructure investment and possibly retraining.

The challenges of energy management

Energy management also comes with its own set of challenges. Some of these include:

Not enough data integrity, analysis or clear benchmarks: Traditional building management systems and meters that collect data through manual energy audits don’t provide data that lets you see wasteful energy usage patterns. Using an energy management system makes it easier and more convenient to access and use more data about energy consumption. A strong energy management system automatically generates regular, reliable and customized energy reports.
Faulty systems, incorrect settings and poorly maintained equipment: Scheduled checks conducted too infrequently mean wasted time and money. Equipment that breaks down unexpectedly thrusts you into reactive maintenance, which can create challenges and unexpected expenses. In contrast, intelligent energy systems alert you to equipment breakdown and energy wastage immediately. They provide real-time information on energy consumption, and you can set energy KPIs for consistent results. Having a proactive maintenance strategy, with routine and preventive maintenance schedules, means equipment is serviced regularly and has longer lifespans.
Failure to plan for energy upgrades: In-depth energy data lets you make smart decisions about energy retrofits or upgrade initiatives that bring cost savings and a good ROI.