A Systematic Decision Support Framework and Prioritization Method for Energy Projects in Industrial Organisations

Abstract

This paper describes a decision support framework to help industrial organisations make positive investment decisions on energy performance improvement projects. It is intended as a simple and repeatable approach for energy managers to promote informed, unbiased energy-related decision-making from top management. The framework is underpinned by a project prioritisation tool that uses economic, environmental, social and technical criteria. This tool is a hybrid multicriteria decision method that combines Analytical Hierarchy Process, Fuzzy Logic and Technique for Order of Preference by Similarity to Ideal Solution. The proposed methodology is applied in a case study concerning five energy projects in a Fortune 500 manufacturing corporation in the life sciences industry. Results show the application of this decision support framework resulted in increased funding for energy projects within this large organisation.

Defining corporate energy policy and strategy to achieve carbon emissions reduction targets via energy management in non-energy intensive multi-site manufacturing organisations

“…This process starts "once the need for an investment in energy efficiency is identified" (Nehler and Rasmussen, 2016) and finishes with decision. The investment decision process plays a definitive role in the selection and implementation of energy efficiency measures in manufacturing organisations (Contreras et al, 2017), (Cooremans, 2012), (Trianni, Cagno and Farné, 2016), however, "profitability plays an important but not decisive role in investment decision-making" (Timilsina, Hochman and Fedets, 2016). Decision-making practices are also influenced by diverse internal factors such as (i) the evaluation process (e.g.…”

“…The list of nonenergy benefits encountered in literature can be found in the Appendix (see section 10.4). Recent research (Contreras et al, 2017), is now making a strong case for understanding how non-energy benefits may drive energy management implementation as industry "do not seem to have yet acknowledged how relevant non-energy benefits are to promote energy efficiency measures adoption" (Trianni, Cagno and Farné, 2016), and "lack of knowledge of how these [non-energy benefits] should be quantified and monetised" (Nehler and Rasmussen, 2016) if the manufacturing sector is going to effectively contribute to global carbon reduction targets. Benefits such as reduced labour and maintenance costs can be monetised to construct compelling business cases with higher savings and better financial metrics than those accounting for lower energy consumption alone (Pye and McKane, 2000).…”

“…In helping to create a business case for carbon reductions through energy management a more systematic and strategic approach to help decision makers reach positive decisions on energy efficiency measures is needed. Examples of this are given by Fleiter et al (2012) and by Contreras et al (2017). While Fleiter proposes a qualitative approach that lacks a link to the impact on the core business of non-energy benefits, Contreras proposes a quantitative decision support framework for multi-site organisations.…”

“…It is important that exact dates are defined for the 'medium-term' and 'long-term' periods since this may then be used during the decision-making process for energy-related carbon reduction projects (Contreras et al, 2017).…”

“…However, even with the recognition in industry that better carbon and energy performance is linked to better financial performance, organisations still struggle to make positive investment decisions on energy efficiency measures. This remains a reality even when such measures are financially viable, contribute to lessen their impact on the environment and provide additional non-energy benefits (Contreras et al, 2017). This sub-optimal performance level is referred to in literature as the "energy efficiency gap" (Thollander and Ottosson, 2010).…”