ISO 50001

Maximizing Your Energy Efficiency Through Proven Standards Transcript

Slide 1: ISO 50001

Maximizing Your Energy Efficiency Through Proven Standards
Welcome to ISO 50001: “Maximizing Your Energy Efficiency Through Proven Standards”

Slide 2: Welcome
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normal play of the course. Click the Notes tab to read a transcript of the narration.

Slide 3: Objectives
At the completion of the course, you will be able to:

• Define the International Standard: ISO 50001

• Define the importance of complying with ISO 50001
• Identify the benefits associated with the use of standards like ISO 50001
• Describe an Energy Management System as relates to ISO 50001
• Explain the purpose of Superior Energy Performance
• List the steps to comply with Standard ISO 50001
• Describe best practices that have been used to deploy ISO 50001

Slide 4: Introduction
Established, well-documented standards play an important role in all types of business. They generate a
fixed, reliable structure for an organization as it defines its operations, processes and business goals.

The International Organization for Standardization (ISO) is the world’s largest developer of voluntary
International Standards. Since 1947, their highly practical and credible standards have been making industry
more efficient and effective, by establishing market expectations for quality (ISO 9001), environmental
management systems (ISO 14001), and other business drivers.

As defined by the International Organization for Standardization:

“A standard is a document that provides requirements, specifications, guidelines or characteristics that can
be used consistently to ensure that materials, products, processes and services are fit for their purpose.”
ISO Standards present the most up to date provisions for products, services and best practices. They are
developed through global agreement, so they assist in the break down of international trade barriers.

This course is designed as an introduction to a relatively new standard: ISO 50001 - Energy management
systems - Requirements with guidance for use. Released in 2011, this standard seeks to support
organizations efforts to use energy more efficiently, through the development of an energy management
system (EnMS) and associated work practices.

Slide 5: Introduction
Early trends indicate that the ISO 50001 Energy Management standard is poised for tremendous growth in

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US adoption rate. Multinational manufacturers recognize that the standard gives credibility and structure to
an Energy Management initiative within an industrial process facility and saves energy cost, reduces
downtime, improves energy reliability, and contributes to environmental sustainability objectives.

Is your organization interested in saving money, conserving resources, and tackling climate change? Does
your organization want to be a champion of energy efficiency and capture new business opportunities as
changes in public policy and customer preferences transform global markets? The adoption of ISO 50001,
with or without certification, is one way to help achieve this critical mission. If you are a product
manufacturer - If your customers are not demanding this today, keep in mind that they may in the near future
- Would you want a competitive advantage when that happens?

Slide 6: ISO 50001 Defined

ISO 9001 and ISO 14001 have become well-known standards in industrial organizations. ISO 50001 is
based on the same type of management system model of continual improvement. This makes it easier for
organizations to integrate energy management into their overall efforts to improve quality and environmental
management.

It’s important to recognize ISO 50001 as a standard for operating an energy management system within an
industrial facility. Keep in mind: When we talk about a system, we are talking about a critical set of policies
and procedures which will help to guide you to effectively “plan, do, check and act” within your plant in terms
of encouraging and sustaining a high level of energy efficiency.

When we discuss this type of a system, we are talking about an EnMS – which refers to a management
system that meets the requirements of ISO 50001; this should not be confused with an EMS – or Energy
Management System – which usually refers to software which either provides centralized visualization of
energy meter data, or enables specific energy control functions, such as temperature setbacks or occupancy
controls

Slide 7: ISO 50001 Defined

What can ISO 50001 do for you?

ISO 50001 provides a framework of requirements for organizations to:

Develop a policy for more efficient use of energy
Fix targets and objectives to meet the policy
Use data to better understand and make decisions about energy use
Measure the results
Review how well the policy works, and
Continually improve energy management.

Slide 8: International Organization for Standardization

So why do ISO Standards matter?

ISO Standards are applicable to any organization, regardless of type, size, location, or product provided.
ISO’s impact goes beyond product criteria to best practices in factories, and even to environmental
performance; these standards are part of an overarching reference framework.

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For example, ISO 9001 specifies requirements for a quality management system. ISO 9001 has become
integral to providing a quality product that meets customer and applicable statutory and regulatory
requirements. And ISO 140001 addresses important environmental standards that keep our environment
safe. For example, such a standard would prohibit landfill disposal of batteries, and would describe how to
dispose of chemicals in a way that preserves the environment.

Slide 9: International Organization for Standardization

Naturally, as these standards are released and gain exposure, we begin to see a common pattern occur. Lets
talk a bit about the adoption rate for these types of standards. At first, it was mainly European-based plants
that adopted standards like 9001, and then 14001, to adhere to local laws or to take advantage of certain tax
incentives. American companies also adopted these standards within their European operations—but then
adopted these same standards in other locations, including in their plants within the US. These same
companies then extend compliance requirements to their direct supplier base, then down to lower tiers within
the supply chain. This causes an exponential growth in adoption rate, as depicted in this chart of ISO 14001
certification. We can now see this same effect in ISO 50001 adoption: 20 months after the June 2011
publication of the standard, more than 2500 sites have received certification, which closely matches the ISO
14001 curve. Even more significant is the number of sites adopting the ISO 50001 standard WITHOUT
seeking immediate certification.

Slide 10: Why Implement ISO 50001?

Why implement the ISO 50001 standard?

There are three reasons:

1. It’s an emerging market expectation. Here we can see the list of multi-nationals who are adopting
the standard, and this list is rapidly expanding each and every day. Do you recognize any names
on this list?

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 2. It provides a competitive advantage by providing for:
• Decreased Energy Demand/Costs
• Elevation of “Green Brand”
• Decreased Maintenance Costs
• Cross Functional Alignment
• Continuous Improvement Culture
• Engaged Employees

Slide 11: Why Implement ISO 50001?

It provides an efficient FRAMEWORK for an energy management program:

Many companies have a collection of unstructured energy management initiatives, with uncertain priorities,
inconsistent metrics, and confusing objectives. This disorder causes many well-intended programs to loose credibility
and effectiveness, and makes it difficult to justify further investments. The ISO 50001 Structure can be used to
organize the initiatives that have already begun, and more importantly, allows the energy stakeholders to understand
where the GAPS are in the energy strategy.

Slide 12: Why Implement ISO 50001?

All of this leads to filling in those gaps, and fulfilling the objectives of the Energy Management Program,
which include attaining certification, setting best practices, and achieving standardization.

Slide 13: What Can Be ISO 50001 Certified?

WHAT can be ISO 50001 certified?

You, the user, define the scope of certification.

It can be:
• An entire company
• A specific site
• A specific process
• Or a workstation

This means that implementation is completely SCALABLE. If, for example, you have a specific purchaser of
your product who imposes energy and sustainability requirements for its suppliers, you may be able to take a
competitive advantage by certifying the production line that supplies that customer.

Slide 14: ISO 50001 & Schneider Electric

Schneider Electric has long been seen as the global specialist in energy management and a true thought
leader in energy efficiency initiatives that span many industries. The very first site globally to certify the ISO
50001 standard in June 2011 was Schneider Electric's World Headquarters, known as “The Hive”.

Slide 15: ISO 50001 & LEED

By now, you might be asking yourself: How is ISO 50001 different from LEED? I’m already LEED certified;
why should I be following ISO 50001 as well?

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Leadership in Energy and Environmental Design (LEED) consists of a suite of rating systems for the design
and construction of high performance green buildings, homes and neighborhoods. Developed by the U.S.
Green Building Council (USGBC), LEED pertains to the physical characteristics of the building and the
installed conservation measures. LEED addresses things like an insulation’s R value, the efficiency of your
boiler, whether your windows face north or south and what sort of window coverings you might need as a
result to conserve energy.

ISO 50001 concentrates on the management policies and procedures to generate efficient operation in the
years to come. ISO 50001 deals with making process improvements and it asks: How can you change your
current process to make it more efficient?

Slide 16: Superior Energy Performance

ISO 50001 does NOT, by itself, quantify the amount of energy cost savings that a business acquires as a
result of implementing ISO 50001.

This is where the Superior Energy Performance Rating - or SEP Rating - becomes important. The SEP
Rating was first released in early 2012 as a complement to ISO 50001. It is a grading system specifically for
performance improvement. It was created to help describe the amount of energy savings an organization has
received as a benefit in terms of energy saving as a result of implementing ISO 50001.

There are three levels, all associated with a certain percentage of energy savings and performance
improvement.

5% performance improvement = Silver

10% performance improvement = Gold
15% performance improvement = Platinum

In order to be eligible for a SEP Rating your organization must be ISO 50001 certified. SEP is currently
offered in four different sectors: Industrial, Commercial, Transportation and Utility.

When marketing yourself as compliant, your organization would use this type of language: “We comply with
ISO 50001 and have achieved Platinum Level Results.” SEP ratings may be imposed as requirements for
supply chain participation, or various grant and funding programs from utilities or governments.

Slide 17: Challenges

There are always challenges associated with the adoption of any new standardized process. There is an
initial investment– and there always is when making improvements - but think about it this way: your
organization is probably making this investment already. This is one way you can be assured that you are
spending that money as wisely as you should be. Or you could be making the investment in an unstructured
way, and it could be defined more clearly by taking on the implementation of this global standard.

Types of initial investments include things like the dedication of internal resources to enable and maintain the
changes associated with process improvement. And the CapEx investment associated with certification.

Then you have the challenge of establishing C-Level engagement. It can be difficult to seek out true leaders,
visionaries, who can see the benefits of implementing this performance improvement strategy, even though

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its not mandated at this time, and its too new to show case studies for savings. Identify and engage these
visionaries early on; they are the people who can inspire trust, support change, and nurture initiatives that
encourage an increase in efficiency and productivity.

Slide 18: Anatomy of the Standard

If you already implement ISO 9001, and ISO 14001, then you probably already have the many of the
processes in place, and a process mind-set in place, to embark on the implementation of ISO 50001. Here we
can see a Shewhart Cycle that establishes an effective plan for implementing ISO 50001. Let’s investigate
each topic further.

Slide 19: Plan

PLAN is the first step in the anatomy of a standard. This is where you institute the essential objectives and
processes to deliver results in accordance with the expected target.

Establish an Energy Baseline

This is an assessment of current energy consumption, procurement practices, and conservation measures.
This tells us how to do an assessment and shows what an energy assessment should include and what the
scope of the assessment should be. It should include everything, process too, not just the building envelope,
and not just lighting!

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On average, 84% of energy used within a manufacturing facility is in the manufacturing PROCESS, not in the
building systems. So the assessment needs to include the Process equipment for the biggest impact!

Establish an Energy Policy

The standard outlines the process of creating an effective energy policy which includes defining planning
inputs, performing an energy review (analyzing energy consumption, identifying areas of significant
consumption, and indentifying opportunities for improving energy performance) and defining planning
outputs (Energy Performance Indicators (EnPI), targets and objectives).

Legal and Other Requirements

The organization should identify, implement and have access to the applicable legal requirements and other
requirements to which the organization subscribes related to its energy use, consumption and efficiency.

Legal Requirements could include the air permits associated with boilers and limitations on generator use.

Design

The organization should consider energy-performance improvement opportunities in the design of new,
modified, and renovated facilities, equipment, and systems.

For example, a factory may be considering a change to raw material composition to reduce cost. However,
such a change MAY impact batch temperature setting, or may require an application of chilled water or other
energy resource.

Without ISO 50001, such energy cost impacts may not be factored into the business decision to change raw
materials.

Procurement of Energy Services

When procuring energy services, products, and equipment that can have an impact on significant energy
use, the organization should inform suppliers that procurement is partly evaluated on the basis of energy
performance.

For example, a clause within your standard terms and conditions could indicate that procurement is partly
evaluated on the basis of energy performance. Energy consumption could then be factored into the rating
system for new equipment.

Slide 20: Do
DO is the second step in the anatomy of a standard. Here is where you implement the plan, and carry out the
process. You also gather data for investigation in the following CHECK and ACT steps.

Energy Review

The organization should develop, record, and maintain an energy review. The methodology and criteria used

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to develop the energy review is documented. To develop the energy review, the standard states that the
organization must:

1. Analyze energy use and consumption based on measurement and other data;
2. Based on the analysis of energy use and consumption, identify the areas of significant energy use;
3. Identify, prioritize and record opportunities for improving energy performance.

Establish Energy Performance Indicators (EnPIs)

Its important to identify EnPIs that are appropriate to monitoring and measuring energy performance and of
course its best to put that in the context of your production output. Here is where you investigate things like
how you should come up with energy measurement metrics, how are they collected, how are they used, and
do they need to be put into a database?

For Process Energy metrics, we suggest putting Energy in the CONTEXT of production output: for example,
Watt-hours per widget, BTUs per gallon, or Kilo-Watt Hours per Ton of material processed.

Energy Management Action Plan

Energy Management Action Plans should:

1. Discuss the hardware to be used (metering and structures on site);

2. Use a software platform to create targets and view site assessments to determine what can be
improved;
3. Discuss “train the trainer” using consumption worksite information;
4. Discuss current energy action plan output, framed in “plan do check act” language.

Implementation

It is recommended that the organization use the action plans and other outputs resulting from the planning
process for implementation and operation.

1. Establish energy performance indicators, energy objectives and targets that are measureable and
have timelines for achievement;
2. All persons working on this project are trained and educated properly;
3. Appropriate records are maintained;
4. Anyone working on behalf of the organization is aware of the importance, their roles, the benefits,
and the impact of this standard.

Competence, Training & Awareness

The organization is responsible for making sure that any people working for or on its behalf are competent on
the basis of appropriate education, training, skills, or experience.

A representative must ensure that appropriate records are maintained and that all employees are aware of
their roles and the benefits and impact of the International Standard.

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Slide 21: Check
CHECK is the third step in the anatomy of a standard. Here you study the actual results and compare them
against the anticipated results to determine any differences. This allows you to determine appropriateness
and completeness of the plan to facilitate the implementation.

Control of Documents

Energy policy and procedures are stored in documentation. How do you control that documentation? Do you
use a document management system? Who has access to make changes to that documentation and who
decides that changes can in fact be made?

Operations Control

The organization needs to identify and plan operations and maintenance to ensure that they are carried out
under specified conditions by means of the following:

1. Establishing and setting criteria for the effective operation and maintenance of significant energy
uses, where their absence could lead to a significant deviation from effective energy performance;
2. Operating and maintaining facilities, processes, systems and equipment, in accordance with
operational criteria;
3. Appropriate communication of the operational controls to personnel working for, or on behalf of, the
organization.

Evaluation of Compliance

At planned intervals, the organization needs to evaluate compliance with legal requirements and other
requirements to which it subscribes related to its energy use and consumption.

The user of the standard defines the intervals, for example, typically every year or 3 years.

Internal Audits

The organization is expected to conduct internal audits at planned intervals to ensure that the EnMS:
1. Conforms to planned arrangements for energy management including the requirements of this
International Standard;
2. Conforms with the energy objectives and targets established;
3. Is effectively implemented and maintained, and improves energy performance.

Monitoring, Measurement, Analysis

A company needs to define and periodically review its measurement needs. Key characteristics of its
operations that determine energy performance need to be monitored, measured, and analyzed at planned
intervals. Key characteristics include at a minimum:

1. Significant energy uses and other outputs of the energy review;

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2. The relevant variables related to significant energy uses;
3. EnPIs;
4. The effectiveness of the action plans in achieving objectives and targets;
5. Evaluation of actual versus expected energy consumption.

Slide 22: Act

ACT is the fourth step in the anatomy of a standard. Here is where you analyze the differences between
actual and planned results, determine their root causes and employ corrective actions on major differences.

Noncomformities, Correction, & Prevention

The organization should address actual and potential nonconformities by making corrections and taking
preventive action.

An example of an energy nonconformity is the following:

The EnPI was trending very poorly in the last part of 2012. The Energy Manager entered a nonconformity as
he was not going to meet his goals. The investigation coincided with the update of the Energy Review. A
detailed look at the gas submeters and utility bills showed a discrepancy starting in September 2012.
Discussions with the utility led to the discovery of a new meter being installed improperly. The facility was
refunded $50k, but would not have identified it without the procedure associated with the ISO 50001
standard.

Management Review

At planned intervals, top management should review the organization's EnMS to ensure its continuing
suitability and effectiveness. This includes having a review on a scheduled basis and reviewing best
practices. The outputs from the management review should include any decisions or actions related to
changes in the energy performance, energy policy, EnPIs and another other changes to the objective or the
allocation of resources.

Control of Records

The organization will establish and maintain records to demonstrate conformity to the requirements of its
EnMS and the energy performance results achieved. Additionally:

The organization defines and implements controls for the identification, retrieval and retention of records;
Records remain legible, identifiable, and traceable to the relevant activity.

Documentation

The organization should establish, implement and maintain information, in paper, electronic or any other
medium, to describe the core elements of the EnMS and their interaction.

Such documentation would include audit results, procedural descriptions, data history, and associated
certificates.

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Communication

Communicate the EnMS and EnPIs throughout the organization, market and other stakeholders

It’s important to share documents and results. Share relevant information with stakeholders through reports
and meetings. The market communicates to customers that you are compliant. The stakeholders like to know
that you are lowering your dependence and lessening risk.

Slide 23: Implementation Process

Next we will investigate the strategy for implementing ISO 50001.

First, you must have a plan of action. You need to determine an Energy management consulting team to
help construct that plan. They might include people like:

• Plant managers
• Energy managers
• Corporate purchasing person
• Commodities purchasing person

Schneider Electric offers a readiness assessment tool to help preliminarily evaluate a company's resources
and its ability to meet the standard. This does not replace an audit, instead it provides a first glance and is
meant to help kick off the Energy Management team’s brainstorming. The tool can be found here:
http://emis2.ischneider-electric.com/energy-comparison/

Slide 24: Implementation Process

Once you have determined your readiness, you can then begin to implement utilizing a 5 step strategy. It
usually takes between 6 – 12 months for the full process to be completed.

The five steps are:

1. Gap Analysis (How do I NOT comply today? What aren’t you in compliance with? Find your degree of
investment needed)
2. Facility Energy Review (Do your every review through the baseline assessment)
3. EnMS Construction (Construct your energy management system)
4. Readiness Review and Internal Audit (Before you bring in the auditor, you do your own internal reviews
then you have number 5)
5. ISO Certification Audit

Let’s investigate these steps further.

Slide 25: Five Step Implementation Process

Here are the five steps for implementing ISO 50001.

Phase 1

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The first step is to perform a gap analysis.

This is an assessment that aims to appraise the current conditions applicable today so that you can
determine what needs to be done to achieve the over arching goals of tomorrow. It uncovers the gaps in an
effort to help you bridge those gaps. It creates a baseline by which you will measure your successes and it
provides valuable data to further shape the change.

It helps you determine which current practices can be adopted to meet the standard and it helps you establish
realistic, attainable objectives as you develop an implementation plan.

Phase 2

Most people have only a vague idea of how much energy they are using for different purposes in their
facilities and what sort of difference they could make by changing day-to-day behavior or investing in energy
efficiency measures. Seeking truth in energy consumption is an important facet in making energy more visible
and more amenable to understanding and control.

Phase 2 of ISO 50001 implementation deals with conducting an energy review.

Here you need to conduct a utilities analysis and identify Significant Energy Users (SEUSs). For each of
those SEUs, you need to:

Develop Energy Conservation Measures

Create a metering plan
Identify operating parameters

Phase 3

Phase 3 of implementation deals with the construction of the Energy Management System.

Here you build procedures for a fully functional system. Here you provide awareness and training to your
employees, your suppliers, and your customers. This is how you ensure energy efficiency targets have a plan
for achievement.

Phase 4

In Phase 4 of ISO 50001 implementation we continue to assess our readiness to adopt the standard.

We conduct a second Gap Analysis to ensure all requirements are met. Here is where we also conduct an
official Internal Audit. We hold a management review which evaluates internal audit results and Energy
Performance Indicators (EnPIs).

Phase 5

Phase 5 of implementation deals with Certification Audits. There are two stages involved:

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Stage 1 Audit - This is a higher level audit to ensure readiness for Stage 2.
Stage 2 Audit - This ensures the EnMS meets the intent of the standard. It dives deeper into procedures and
it presents corrective actions for major and minor findings.

Slide 26: SEP Add-On

At this point, you can decide if you want to determine if you qualify for a SEP Rating by determining your
Superior Energy Performance Indicator (SEnPI). Here you would determine the appropriate variables
affecting your SEnPI. You would also calculate your SEnPI for a 4 or 11 year time span and ensure that your
SEnPI is updated annually.

Slide 27: Summary

Let’s summarize what we have learned in this course.

• ISO International Standards ensure that products and services are safe, reliable and of good quality.
• For business, they are strategic tools that reduce costs by minimizing waste and errors, and
increasing productivity.
• They help companies to access new markets, level the playing field for developing countries and
facilitate free and fair global trade.
• ISO 50001 seeks to support organizations to use energy more efficiently, through the development of
an energy management system (EnMS).
• Complying with ISO 50001 gives you a competitive advantage in the marketplace.

Slide 28: Thank You!

Thank you for participating in this course.

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