BENCHMARKING
TO SAVE ENERGY
Protect Our Environment
Through Energy Efficiency
ENERGY STAR

-------
                                                  S.
                                         Guidelines for
                                         Superior
                                         Energy m
BENCHMARKING  FOR  SUCCESS
Businesses are reducing their energy costs by 10, 20, and 30 percent through effective energy
management practices that involve assessing energy performance, setting energy-savings goals,
and regularly evaluating progress. Facility- or building-level energy performance benchmarking
is an integral part. It provides the reference points necessary for gauging the effectiveness of
energy management practices and management for continuous improvement.
The U.S. Environmental Protection Agency's (EPA) ENERGY STAR® program provides guidance
and benchmarking tools to help organizations successfully save energy. These resources enable
energy managers to determine the energy efficiency of their operations and make informed
management and investment decisions.
Demand for energy performance benchmarking  is growing. The number of commercial,
institutional, and industrial facilities benchmarked using EPA's tools increased by 50 percent in
the past two years. Many of these facilities have earned the ENERGY STAR for their superior
performance—with the result that they are using 35 percent less energy than the average,
while providing the same or better services.


WHY BENCHMARK?
Benchmarking informs organizations about how they use energy, where they use it, and what
drives their energy use. It is a key step in identifying opportunities to increase profitability by
lowering energy and operating costs. For example:
• In commercial real estate, decreasing energy costs by 30 percent is equivalent to increasing net
  operating income by 4 percent.
• In the healthcare industry, each dollar that a hospital saves in energy costs is comparable to
  generating new revenues of $20.
• In the supermarket retail industry, a 10 percent reduction in energy costs is equivalent to
  increasing sales per square foot by $70.

Realizing these savings can be catalyzed through benchmarking.

Benchmarking is necessary for effective energy management. Through benchmarking, the key
metrics for assessing performance are identified, baselines are established, and goals are set.
This process helps to identify the key drivers of energy use and provides an important diagnostic
tool for improving performance.

By evaluating trends and variability in energy use, benchmarking can improve management
decisions on investments in energy-related projects. Developing a historical perspective on
current and  past energy use provides a context for those decisions.  Benchmarking against the
industry provides key insights into the competitive use of energy.

Benchmarking demonstrates the value of an energy program and prospects for additional
savings. It enables an organization to understand the opportunities lost by remaining average in
energy performance—and the benefits of progressing beyond the average.

Benchmarking energy performance enables the energy managerto identify best practices
that can be  replicated. It establishes reference points for measuring and rewarding good
performance. It identifies high-performing facilities for recognition and prioritizes poor
performing facilities for immediate improvement. At certain performance benchmarks—
milestones—an organization becomes eligible for recognition from  ENERGY STAR.


SUCCESSFUL BENCHMARKING
Successful benchmarking begins with upfront decisions on the goals, scope, and metrics that
will support energy management activities and objectives. Determining the options that are
available, such as using existing tools, is necessary.
Conducting  benchmarking involves uncovering the key drivers of energy use and adjusting or
"normalizing" the metrics used to compare energy use. At a facility,  for example, the data can
be normalized for weather, production levels, or product characteristics that affect energy use.
Normalizing data ensures the meaningful comparison and analysis of data and can be done
either through simple or sophisticated statistical techniques. Normalizing creates a level playing
field that avoids comparing apples and oranges.
Evaluating and acting on benchmarking  results is as important as gauging energy performance.
Successful benchmarking also requires testing methods and approaches in order to establish a
system that can be used to drive continuous improvement.

-------
KEY STEPS AND  BENEFITS OF BENCHMARKING
   150
   120
    90
    60
    30
Supporting Energy Management

Steps:
 ^ Determine the objectives for benchmarking
 ^ Define the scope (entire organization, single
   facility, or individual equipment)
 ^ Identify measures of energy intensity, such
   as Btu per unit of product
 ^ Establish a baseline to measure progress
 ^ Engage senior managers and other partners
 ^ Examine options for benchmarking
 * ENERGY STAR Tools: Guidelines for
   Energy Management
Benefits:
   (Initiates continuous improvement in
   corporate energy performance
   Facilitates ranking facilities to prioritize
   capital investments
   Ensures facilities or buildings are quantitatively
   compared on a level playing field
   Produces cooperation
   among key players to
   drive change
 V
Assessing Performance

Steps:
 ^ Analyze data needs
 ^ Collect energy use data
 ^ Normalize energy use by
   controlling for external factors,
   such as weather
 ^ Test benchmarking process
   to see how well it predicts
   performance
Evaluating Results
Steps:
 v ENERGY STAR Tools:
   Portfolio Manager, Industrial
   Energy Performance Indicators

 Benefits:
   Improves understanding of
   energy consumption patterns
   and key drivers
   Quantifies performance of
   buildings and plants relative to
   each other
   Evaluates the organization's
   position relative to the rest of
   the market
   Analyze the data for measuring
   current position relative to
   benchmarks
   Continuously reassess the
   benchmarking process
* ENERGY STAR Tools: EPA s
   National Energy Performance
   Ratings, ENERGY STAR Recognition

Benefits:
   Provides tools to diagnose
   problems
   Pinpoints need for improvement
   (by internal and/or external
   comparisons)
   Identifies what drives superior
   performance and thus a target to
   shoot for
   Creates basis for internal and
   external  recognition
   Improves the organization's bottom
   line by ensuring best return on
   investments

-------
BENCHMARKING TOOLS
ENERGY STAR helps energy managers and organizations achieve their energy management goals
through a suite of easy-to-use, yet sophisticated, software tools and technical guidance.
Portfolio Manager is a free online software tool for tracking energy and water use, and rating
the energy performance of selected building types. The tool enables users to:
•  Track multiple energy and water meters;
•  Benchmark facilities relative to past performance;
•  View percent improvement in weather-normalized  source energy;
•  Monitor energy and water costs;
•  Verify building  energy performance; and
•  Determine energy performance ratings.
For many building types, Portfolio Manager can provide an EPA energy performance rating.
EPA's national energy performance ratings are derived from U.S. energy and facility data, and
accountforthe impact of weathervariations and key physical and operating characteristics of
each building. Ratings are provided on a scale of  1 to 100.
Energy performance ratings are a critical management tool for evaluating how efficiently a
building is using energy compared to similar buildings nationwide.
Buildings with superior performance are eligible to earn EPA recognition. The ENERGY STAR
label is awarded forfacilities achieving the top 25 percent of performance ratings nationally,
without compromising comfort or services.
Energy Performance Indicators (EPIs) are industry-specific benchmarking tools that
enable energy managers and corporate executives to  evaluate the energy efficiency of their
manufacturing plants relative to similar facilities.  EPIs are derived from facility-level production
and energy data. The tool normalizes for key factors that drive energy use, including plant
                                                                                                     utilization, weather, product mix, and facility and product characteristics. EPIs provide key
                                                                                                     performance metrics and EPA energy performance ratings on a scale of 1 to 100.
                                                                                                     EPIs are a critical management tool for evaluating how efficiently a plant is using energy
                                                                                                     compared to the entire sector.
                                                                                                     Plants with  superior performance are eligible to earn EPA recognition. The ENERGY STAR label is
                                                                                                     awarded for those that achieve the top 25 percent of performance ratings nationally and satisfy
                                                                                                     specific compliance criteria.
                                                                                                     Benchmarking Guidance provided by ENERGY STAR helps energy managers develop
                                                                                                     benchmarks for facilities where EPA does not provide them. EPA's technical guidance helps with
                                                                                                     planning, developing metrics, normalizing data, and using the results. The guidance is accessed
                                                                                                     through ENERGY STAR'S online Guidelines for Energy Management
                                                                                                     Successful benchmarking programs are tailored to the structure and culture of each specific
                                                                                                     organization. Although a single approach will not address the needs of every organization, all
                                                                                                     can benefit  by implementing a benchmarking process.
FOR  MORE  INFORMATION
Participation in ENERGY STAR presents an opportunity for an organization to benchmark itself
against peers, reduce costs, improve energy efficiency and environmental performance, and gam
recognition for its voluntary energy efficiency accomplishments.
For detailed information on establishing a benchmarking program to achieve world-class
performance, see:
ENERGY STAR Guidelines for Energy Management-
   Benchmarkmg Section: www.energystar.gov/mdex.cfm'?c=assess_performance.benchmark
   Portfolio Manager: www.energystar.gov/benchmark
   Energy Performance  Indicators: www.energystar.gov/epis

-------

-------