SV Business – Boosting Productivity
Conducting an Energy Assessment
1. Introduction: Energy Assessment Requirements
This guide has been developed for energy consultants (energy assessors) to:
1. Understand and comply with the minimum requirements for the SV Business – Boosting
Productivity Energy Assessment Grants, 2016
2. Assist businesses who are considering applying for funding to carry out an energy
assessment
The energy assessment grants will assist businesses to:
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Understand their site’s energy use and intensity
Identify opportunities to improve energy efficiency and reduce energy bills
Identify further opportunities for cost savings and increased business productivity via co
benefits of energy efficiency, such as reduced equipment maintenance costs and improved
product quality
Understand the costs and paybacks of the identified opportunities
Prioritise short and medium term actions to reduce energy use.
The assessment approach allows the identification of the greatest impact areas for businesses, to
permit targeted actions in the areas where the best opportunities to save resources and money
exist.
This guide sets out the minimum expectations for both the completion of the energy assessments
and the energy assessment reports.
Assessments that do not satisfy these requirements will not be eligible for funding.
Further information on the Energy Assessment Grants including eligibility criteria and application
forms.
2. Energy Assessments
2.1 Energy assessment framework
There are two levels of grants available:
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Up to $2000 for a Basic Energy Assessment (Type 1). This is recommended for businesses
spending between $20,000 and $50,000 per annum on energy at the chosen site
Up to $6000 for a Detailed Energy Assessment (Type 2). This is recommended for businesses
spending more than $50,000 per annum on energy at the chosen site.
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The energy assessments are based on the equivalent of a Type 1 or Type 2 Energy Assessment
(Australian Standard AS/NZS AS3598.1 (Commercial Buildings):2014 and AS/NZS AS3598.2 (Industrial
and related activities):2014).
Additional requirements for the conduct of assessments under the grant include:
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Where possible, quantifying the co-benefits of the recommended energy improvements
For manufacturing businesses only: to help identify further energy savings, a material flow
map of the key impact material or the key process that is identified by the business
Develop an Action Plan which has been discussed with the businesses. This will be included
in the final report.
2.2 Conducting the assessment in accordance with AS/NZS 3598
Businesses will be responsible for selecting a consultant (assessor) to undertake the energy
assessment. < see Finding an Energy Assessor>
The level of accuracy of the energy savings and financial costs and benefits from energy performance
improvement actions are defined in AS/NZS 3598.2:2014 Section 5.1 and Section 10.3 Type1: Basic
energy audit and Section 10.4 Type 2: Detailed energy audit.
The Standard states that in order to be of value, energy audits (assessments) need to identify
specific, measurable and implementable energy savings opportunities.
To comply with the Standard, energy audits (assessments) are required to quantify energy savings
measures, rather than simply providing recommendations for further investigations.
Energy audits (assessments) should be consistent in terms of quality and costs (Section AS/NZS
3598.2:2014 11.2.1).
The following activities should be carried out as part of the energy audit (assessment) as described in
AS/NZS 3598.2:2014. Refer to Section 11.4 for Type 1 requirements and Section 11.5 for Type 2
requirements.
Outcome and Business Needs
Refer to AS/NZS 3598.2:2014 Section 11.4.2 and 11.5.2 for more detail.
Data Collection
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Clear identification of boundaries applied
Historic energy use including available load profiles for at least the last 12 months
(recommended 24 months) to identify anomalies
Appropriate production data to establish ENPIs
Energy Tariffs and peak demand charges.
Refer to AS/NZS 3598.2:2014 Section 11.4.3 and 11.5.3 for more detail.
Analysis
Refer to AS/NZS 3598.2:2014 Section 11.4.4 and 11.5.4 for more detail.
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Opportunity Identification
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Presentation of a draft list of opportunities to the organisation for discussion to confirm the
feasibility of opportunities prior to detailed analysis (Type 2 Only)
Renewable opportunities to be included as relevant to the business
Identification and quantification of energy savings for each opportunity.
Refer to AS/NZS 3598.2:2014 Section 11.4.5 and 11.5.5 for more detail.
Opportunity Evaluation
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Review of Tariff savings opportunities
Greenhouse gas savings
Develop an Action Plan.
Refer to AS/NZS 3598.2:2014 Section 11.4.6 and 11.5.6 for more detail.
2.3 Conducting the assessment – additional requirements
To maximise the benefits for businesses, Sustainability Victoria has identified the following
additional requirements:
Data collection
In collecting data for manufacturing businesses, assessors will be required to investigate how the use
of raw materials in the manufacturing process influences energy use. To this end, assessors must
prepare a material flow map for a major material or process as agreed by the business. This will
identify inefficiencies in the use of materials and help quantify the opportunities to reduce energy
(and deliver other co-benefits).
See Section 5 of this document for further information.
Opportunity identification – strengthening the business case
The International Energy Agency has estimated that the value of the productivity and operational
benefits associated with energy efficiency can be up to 2.5 times the value of energy savings alone.
In other words, for every dollar of energy savings there is the potential for $2.5 dollars of additional
savings.
Assessors must identify and quantify, where possible, the co-benefits associated with each energy
opportunity. Co-benefits may include:
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Reduced maintenance costs
Reduced disruption to the businesses associated with equipment failure and/or
maintenance
Cost savings associated with equipment with extended operating hours
Increased productivity as a result of equipment with improved operating capacity
A guide to identifying and quantifying co-benefits is being developed.
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Develop an Action Plan
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From the prioritised opportunities an Action Plan must be developed, in consultation with
the business, which lists the priority actions, the recommended implementation approach,
the completion date and who is responsible for the action.
After presentation of the report the business and SV will meet to discuss next steps in
implementing the agreed opportunities. The assessor is welcome to be in attendance if the
business wishes.
2.4 The energy assessment report
As described in AS/NZS 3598.2: 2014 Appendix B6, the final report should present the energy saving
opportunities, clearly identifying where savings can be made, how much that they cost to
implement, and what savings can be made. It will include a set of recommended actions the business
can undertake to maximise energy efficiency and cost savings.
The report should also recommend energy management practices, as appropriate.
Assessors must explain these opportunities to the business to ensure the actions are best suited to
their business, before the final report is delivered. Refer to AS/NZS 3598.2:2014 Section 11.4.5 and
11.5.5.
The accuracy of the identified opportunities for:
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Type 1 is based on typical savings calculated using Rules of Thumb or industry accepted
benchmarks, with indicative costs to provide a simple payback. The costs and energy savings
are a broad estimate level as defined by AS/NZS .2:2014 5.1 (a)
Type 2 accuracy of costs and savings should be sufficient for operational expenditures or
medium scale capital investments, and should be commensurate with organisation’s
approval processes. Type 2 audit requirements provide costs and benefits to a medium level
of accuracy as defined by AS/NZS .2:2014 5.1 (b).
Minimum requirements for the final assessment report (refer AS3598.1,2:2014 Appendix B6.2)
The final report should include the following elements as a minimum:
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Executive summary including: (refer AS3598.1,2:2014 Appendix C)
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Total cost of energy
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Total cost of electricity and gas
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Total cost expressed as a percentage of operating costs (SV requirement)
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The four or five key actions that make most business sense in terms of effectiveness,
cost and ease of implementation presented in tabular form.
The table headings should include:
- Opportunity
- Cost of Implementation $
- Direct energy savings $
- Indirect energy savings $
- Payback period years or as agreed with the organisation
- Greenhouse Gas Savings tonnes CO2e.
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Background to the company and project including a description of the key activities
contributing to energy use
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Objectives of the assessment
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Scope of the assessment and assessment methodology
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Energy use profile for the baseline period, including:
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Data sources, and
An assessment of the level of accuracy of the data
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A table giving a clear breakdown of each energy saving opportunity and providing detail
where required. The table should include the following :
o Description of the opportunity
o How each action can be implemented
o Annual energy saving (electricity and gas) (Direct Savings)
o Indirect cost savings (co benefits)
o Total cost savings
o Annual cost saving as a percentage of total operating costs
o Estimated implementation/capital costs
o Payback period (years) or as agreed with the organisation
o Annual and lifetime greenhouse gas savings
o Other risks and considerations identified throughout the assessment process
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Ongoing data management and reporting template to assist the organisation in tracking
their energy use
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Site layout and location plan
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Victorian Energy Efficiency Target (VEET) scheme opportunities. (For more information,
refer to the VEET fact sheets available on www.sustainability.vic.gov.au or visit
www.veet.vic.gov.au)
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An agreed Action Plan.
3. Implementation Development
Once a business has completed an energy assessment, the $3000 implementation bonus can be
claimed to carry out implementation of an identified opportunity, additional scoping work that is
required, purchase of monitoring equipment, detailed design including materials and mass flow
analysis for the preferred option, development of a detailed business case, and technical and project
management support.
4. Material Flow Mapping – Manufacturing Businesses Only
In collecting data for manufacturing businesses, assessors will be required to investigate how the use
of raw materials in the manufacturing process influences energy use. To this end, assessors must
prepare a material flow map for a major material or process as agreed by the business. This will
identify inefficiencies in the use of materials and help quantify the opportunities to reduce energy
(and deliver other co-benefits).
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4.1 What is a material flow map?
The material flow map can be viewed as another data input that will help identify additional energy
savings that could be otherwise missed during a typical energy assessment. In undertaking a material
flow map of a key material or process, the points at which a material or even a finished product
becomes waste can be identified. At each point the quantity and the value of the material can be
calculated. This includes the value of the energy expended to get the waste material to that point.
For example, the ‘true cost’ of rejected products is defined as all costs related to the waste stream
including material, energy, water, handling and storage costs, as well as other factors including
OH&S and quality etc. The reduction of the number of rejects therefore present an energy
opportunity which could be identified in the assessment report. The added benefit to the business is
that this will also identify other ways (the ‘co-benefits’) a business can reduce costs.
4.2 Benefits of material mapping for manufacturers
Given that material costs are often the largest business cost next to labour, getting more from what
a business buys makes good business sense.
Material flow mapping enables a business to:
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Measure flows of materials through the production process
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Know how much material is used and how much waste or spoilage is generated per unit of
product
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Understand the true cost of waste to the business
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Know how much this waste costs the business to produce and manage
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Identify how to improve efficiency and reduce waste
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Develop and implement systems to improve and monitor energy efficiency
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Ensure that the maximum amount of product (and value) is obtained from the materials
used in production
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Reduce costs.
A Life Cycle Mapping Tool for Processes can assist in developing the material map.
4.3 Conducting the Material Map
Manufacturing businesses are responsible for selecting an energy assessor to undertake the energy
assessment and the associated material flow map.
The assessor will look at major material inputs (preferably by weight, if data is available, or in dollar
terms) coming into the business, flowing through and leaving the business as final products, coproducts or waste.
At a high level this involves:
 Gathering historical data and costs of key material inputs
 Mapping and quantifying material flows (weight {kg if appropriate} and dollar amounts) from
supply through the various sections of production and services, and out as waste.
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In undertaking the flow map the idea of the ‘True Cost of Waste’ is introduced. This is the embedded
cost of the waste stream and includes cost of material, embedded energy or water costs, handling
costs, storage costs and others including OH&S, quality etc.
Input data if not readily available can be estimated and all assumptions listed.
The following diagram provides an overview of materials flow into and through a business and
where the opportunities to improve efficiencies exist.
Overview of materials flow into and through a business
Energy In
Products (or
services) OUT
kg and $
Materials IN
kg and $
Waste material at each stage of production of business’ products or services
(the further along process line, the higher the ‘real cost’ of waste)
Kg and $
Total waste
OUT
Key activities in a materials flow map
The following activities should be carried out as part of a materials map
1. Collection of data
Material data can be gathered from raw material record, operational staff, costs of waste disposal
and estimation where appropriate.
2. Undertake a materials input survey
At each stage make an educated guess around materials in kg, energy in GJ and True Cost in Dollars
$.
List the assumptions you have used behind the data.
3. Analysis of production processes for products or services
This will look at all stages in the production processes to identify where materials are used and the
quantities, waste outputs at each stage and opportunities for efficiency improvements, especially for
high value materials.
5. Further information
For further details on the SV Business – Boosting Productivity Energy Assessment Grants
or queries regarding these guidelines, please email: [email protected]
or phone: 1300 363 744.
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