Improving energy performance within the framework of the Energy Efficiency Directive

Improving energy performance within

the framework of the Energy Efficiency

Directive

JESSICA WILHELMSSON

SIGNE ÅKERBLOM

Improving energy performance within the

framework of the Energy Efficiency Directive

Jessica Wilhelmsson

Signe Åkerblom

Master of Science Thesis KTH School of Industrial Engineering and Management Energy Technology EGI-2015-029MSC

Division of Energy Systems Analysis SE-100 44 STOCKHOLM Master of Science Thesis INDEK 2015:67

KTH Industrial Engineering and Management

Förbättra energiprestanda inom ramen för

Energieffektiviseringsdirektivet

Jessica Wilhelmsson

Signe Åkerblom

management

Energiteknik EGI-2015-029MSC Avdelningen för Energisystemsanalys

SE-100 44 STOCKHOLM Examensarbete INDEK 2015:67

KTH Industriell teknik och management

Improving energy performance within the framework of the Energy Efficiency Directive

Jessica Wilhelmsson Signe Åkerblom Approved 2015-06-08 Examiner Cali Nuur Mark Howells Supervisor Staffan Laestadius Mark Howells Commissioner N/A Contact person N/A Abstract

It! is! necessary! for! large! companies! to! understand! and! be! able! to! adapt! to! the! industrial! transformation!towards!an!increasing!focus!on!energy!efficiency,!which!takes!place!today.! The!Energy!Efficiency!Directive!(EED)!issued!by!the!European!Union!has!enlarged!the!focus! on! working! with! energy! efficiency! within! large! companies.! Further,! the! Swedish! government! has! introduced! the! law! about! energy! auditing! in! large! companies,! which! is! based! on! the! EED.! These! regulations! encourage! companies! to! develop! a! management! system!that!includes!requirements!on!conducting!energy!audits!and!propose!costDeffective! measures.!

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Energy! efficiency! is! already! an! important! aspect! within! many! companies! environmental! work,!however!a!more!developed!and!systematic!approach!to!energy!efficiency!than!most! companies!already!have!is!needed!in!order!to!fulfill!the!legal!requirements.!The!Company! investigated!in!this!study!is!one!the!worlds!leading!technology!companies!with!more!than! 9000! employees! in! Sweden.! Currently,! they! have! energy! as! a! significant! aspect! in! their! environmental! work! according! to! the! international! management! system! standard! ISO! 14001.!Today!they!are!also!developing!their!energy!work!by!conducting!energy!audits!in! order!to!comply!with!the!new!legislation.!This!gives!a!more!detailed!view!of!the!energy!use! and! potential! improvements! that! can! be! done,! but! in! order! to! ensure! continual! improvements!over!a!long!period!of!time!further!measures!are!needed.!!

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Within!this!study!it!was!investigated!what!measures!a!large!company!needs!to!implement! in! order! to! increase! their! energy! performance! and! comply! with! the! legislation.! By! a! literature! review! focusing! on! management! systems! as! well! as! interviews! within! the! Company,! a! complementary! study! with! two! companies! covered! by! the! EED! and! three! expert! interviews,! five! key! factors! were! identified.! These! factors! are;! top! management! commitment,! awareness,! goals,! measurements! and! evaluation.! A! model! was! then! developed! aligning! these! factors.! Further,! concrete! proposals! for! action! to! manage! these! factors!were!presented.!By!increasing!focus!on!these!key!factors!and!implement!proposed! measures! companies! will! increase! their! energy! performance! and! also! make! the! organization!aware!of!how!actions!affect!a!company’s!energy!performance.!

Förbättra energiprestanda inom ramen för Energieffektiviseringsdirektivet Jessica Wilhelmsson Signe Åkerblom Godkänt 2015-06-08 Examinator Cali Nuur Mark Howells Handledare Staffan Laestadius Mark Howells Uppdragsgivare N/A Kontaktperson N/A Sammanfattning

Det! är! nödvändigt! för! stora! företag! att! förstå! och! kunna! anpassa! sig! till! den! industriella! omvandling! mot! ett! ökat! fokus! på! energieffektivitet! som! sker! idag.! Energieffektiviseringsdirektivet!som!Europeiska!Unionen!har!utfärdat!har!ökat!fokus!på!att! arbeta! med! energieffektivitet! i! stora! företag.! Vidare! har! den! svenska! regeringen! infört! lagen! om! energikartläggning! i! stora! företag! som! är! baserad! på! Energieffektiviseringsdirektivet.! Dessa! lagstadgade! krav! uppmuntrar! företag! att! utveckla! ett!ledningssystem!som!ställer!krav!på!genomförande!av!energikartläggningar!samt!föreslå! kostnadseffektiva!åtgärder.!!!

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Energieffektivitet!är!redan!en!viktig!del!i!många!företags!miljöarbete,!dock!krävs!ett!mer! utvecklat!och!systematiskt!arbetssätt!än!det!många!företag!redan!har!för!att!uppnå!kraven!i! Energieffektiviseringsdirektivet! och! den! svenska! lagen.! Företaget! som! har! undersökts! i! denna!studie!är!ett!världsledande!teknikföretag!med!mer!än!9000!anställda!i!Sverige.!För! närvarande! har! de! energi! som! en! signifikant! aspekt! i! sitt! miljöarbete! i! enlighet! med! den! internationella!standarden!för!miljöledningssystem!ISO!14001.!Idag!utvecklar!de!även!sitt! energiarbete!genom!att!utföra!energikartläggningar!för!att!uppfylla!den!nya!lagstiftningen.! Detta!ger!en!mer!detaljerad!insikt!över!energianvändningen!och!möjliga!förbättringar!som! kan! göras,! men! för! att! säkerställa! ständiga! förbättringar! över! en! längre! tidsperiod! krävs! ytterligare!åtgärder.!!!!

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I!den!här!studien!har!det!undersökts!vilka!åtgärder!som!ett!stort!företag!måste!införa!för! att! öka! energiprestandan! och! följa! lagstiftningen.! Genom! en! litteraturstudie! som! fokuserade!på!ledningssystem!i!kombination!med!intervjuer!på!det!undersöka!företaget,!en! kompletterande!studie!av!två!företag!som!omfattas!av!direktivet!samt!tre!expertintervjuer! identifierades! fem! nyckelfaktorer.! Dessa! faktorer! är:! högsta! ledningens! engagemang,! medvetenhet,! mål,! mätningar! och! utvärdering.! En! modell! för! att! strukturera! faktorerna! utvecklades! sedan.! Vidare! presenterades! konkreta! förslag! på! hur! dessa! faktorer! ska! implementeras.!Genom!att!öka!fokus!på!dessa!nyckelfaktorer!och!implementera!föreslagna! åtgärder! kommer! företag! öka! sin! energiprestanda! och! medvetenhet! i! organisationen! om! hur!olika!handlingar!påverkar!företagets!energiprestanda.!!

information,! valuable! knowledge! and! support! in! this! project.! Further,! we! are! grateful! for! the! valuable! information! the! interviewees! within! the! Company! participating! in! this! study! gave! us! by! taking! time! to! answer! our! questions.! Furthermore,! a! thanks! to! the! participating! companies! in! the! complementary! study!who!let!us!take!part!of!their!work!and!provided!useful!information!for!the! study.! In! addition,! we! want! to! thank! the! experts! that! were! consulted.! They! provided!valuable!insights!in!specific!areas,!which!were!important!for!this!study.!!!!! !

5.4! Implications!...!62! 5.4.1! Policy!...!62! 5.4.2! Managerial!...!62! 5.4.3! Academic!...!63! 5.5! Future!studies!...!64! 6.! Bibliography!...!65! Appendix!1!–!Interview!guideline! List.of.figures. . Figure!1:!Two!ways!of!handling!an!increasing!transformation!pressure.!...!3! Figure!2:!Projections!of!primary!energy!use!in!year!2020!showing!the!difference! between!prognosis!of!energy!use!in!2007,!the!energy!efficiency!goal!set!by! the!European!Union!and!the!forecast.!...!5! Figure!3:!The!Swedish!Energy!Agency's!three!steps!to!introducing!the!law.!...!7! Figure!4:!The!link!between!an!increasing!transformation!pressure!on!improving! energy!performance!to!how!a!large!company!can!manage!this!and!fulfill!the! EED!and!Swedish!law.!...!8! Figure!5:!The!outline!of!this!report.!...!10! Figure!6:!The!data!analysis!in!this!study.!...!16!

Figure! 7:! Combination! between! management! and! technology! is! important! to! succeed!in!energy!management.!(Energywise,!2011)!...!20! Figure!8:!Comparison!between!four!energy!management!models.!...!23! Figure!9:!Managerial!and!technical!aspects!in!an!energy!management!system.!..!25! Figure!10:!Information!gaps!within!an!organization!regarding!energy!use.!(The! Energy!Research!Institute,!2014)!...!28! Figure!11:!Method!for!conducting!energy!audits!according!to!IEA!(1987).!...!37!

Figure! 12:! A! model! showing! identified! key! factors! to! improve! energy! performance! and! succeed! with! energy! management! based! on! the! requirements!in!the!EED!and!corresponding!Swedish!law.!...!54!

Figure!13:!Measures!to!increase!top!management!commitment!to!energy!work. !...!56!

1. Introduction.

This% chapter% holds% an% introduction% to% the% subjects% of% sustainability% and% the% link% between% energy% and% environmental% consideration% within% today’s% development,% as% well% as% reasons% for% the% increasing% requirements% to% consider% energy% efficiency.%% Further,% information% on% handling% an% increasing% pressure% on% energy% efficiency% is% presented%together%with%the%requirements%from%the%Energy%Efficiency%Directive%and% the%corresponding%Swedish%law.%Also,%problem%formulation,%objective%and%research% questions,%delimitations%and%outline%of%the%report%are%presented.%This%provides%the% reader%with%background%information%to%the%subject.%

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Sustainability! is! today! a! widely! considered! topic.! An! increasing! awareness! of! how!various!choices!affects!the!environment,!economy!and!society!has!created!a! transformation!pressure!on!companies!to!act!upon.!Energy!is!an!important!part! within!this,!and!by!using!energy!more!efficiently!and!integrating!environmental,! economical!and!social!aspects!into!decisionemaking,!companies!can!minimize!the! negative! effects! on! climate,! nature! and! health.! It! is! necessary! for! companies! to! take! responsibility! for! their! impact! within! these! areas! in! order! to! stay! competitive!on!the!market.!This!creates!a!significant!incentive!for!companies!to! work! actively! with! improving! their! energy! performance! and! increase! the! awareness! throughout! the! organization.! (Hong! &! Pham,! 2014;! International! Organization! of! Standardization,! 2004)! Moreover,! energy! savings! has! the! potential! to! lead! to! economical! savings,! which! is! another! reason! to! why! companies!work!to!improve!in!this!area.!(Thollander!&!Ottosson,!2010)!Energy! efficiency! is! also! an! important! method! of! improving! security! of! energy! supply! within!and!among!countries.!To!regulate!and!navigate!companies’!impact!on!the! environment! and! requirements! on! reducing! energy! use,! legislations! both! internationally!and!nationally!are!applied.!(The!European!Union,!2012)!! ! The!European!Commission!issued!the!20e20e20!targets!in!2007,!which!includes! reducing!greenhouse!gas!emissions!by!20!percent!between!the!years!1990!and! 2020,!increasing!use!of!renewable!energy!resources!to!20!percent!and!improving! energy!efficiency!with!20!percent!to!2020!compared!to!2007!years!levels,!within! the! European! Union.! (European! Commission,! 2014b)! However! the! projection! until! now! has! shown! that! the! energy! efficiency! target! will! not! be! reached.! (European! Commission,! 2014a)! The! European! Commissioning! has! therefore! issued! an! Energy! Efficiency! Directive! (EED)! in! order! to! reach! the! target.! The! directive!affects!large!companies!and!requires!them!to!carry!out!energy!audits! and! propose! cost! effective! measures! with! the! intention! of! saving! energy! and! improve! energy! efficiency.! Large! companies! are! defined! by! having! more! than! 250! employees! and! an! annual! turnover! above! 50! million! EUR! or! total! assets! exceeding!43!million!EUR!per!year.!!!(The!European!Union,!2012)!Further,!the! Swedish! government! has! issued! the! law! about! energy! auditing! in! large! companies!based!on!the!EED,!which!is!referred!to!as!the!Swedish!law!or!the!law! in!this!report.!(The!Swedish!Government,!2014)!

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includes!processes!and!instructions!for!how!the!work!in!an!organization!ought!to! be! structured! in! order! to! achieve! its! targets! and! ensure! systemized! work.! (International! Organization! for! Standardization,! 2011)! There! are! management! systems!standards!issued!by!the!International!Organization!for!Standardization! (ISO)!within!which!companies!can!be!certified.!By!having!a!certified!management! system!the!EED!declares!that!the!energy!audit!can!be!done!with!internal!instead! of!external!resources,!which!is!further!described!in!the!report.!!

1.1 The.Company.

The! investigated! company! is! one! of! the! world’s! leading! technology! companies! and! provides! energy! efficient! products! and! solutions.! The! Company! have! a! turnover!above!40!billion!USD!in!2013!and!around!150!000!employees!around! the! world.! Within! Sweden! the! Company! has! around! 9000! employees! and! a! turnover!around!35!billion!SEK.!The!Swedish!organization!is!divided!into!several! divisions!with!different!areas!of!operation.!Today,!the!Company!has!a!developed! management! system! covering! the! areas! of! health! and! safety,! quality! and! environment.!They!have!a!combined!certification!of!their!management!systems! according!to!OHSAS!18001,!ISO!9001!respectively!ISO!14001.!The!Company!has! previously!been!working!with!energy!performance!through!their!environmental! management!system!but!is!currently!changing!their!work!based!on!the!EED!and! corresponding!Swedish!law.!The!Company!has!begun!their!work!with!improving! energy! efficiency! according! to! these! new! requirements! by! conducting! energy! audits! using! internal! resources! from! the! Energy! Efficiency! Unit! within! the! Company.!!

1.2 Problem.formulation.

The!EED!affects!about!1500!companies!in!Sweden!that!must!adapt!and!adjust!to! the!new!requirements!(Ministry!of!Enterprise!and!Innovation!in!Sweden,!2014).! This! is! a! new! initiative! and! the! concerned! companies! need! to! create! a! larger! focus! on! energy! performance! within! their! business! and! its! operations.! Most! companies!will!have!to!make!changes!in!their!work!to!focus!more!on!energy!and! find!effective!methods!to!do!so.!It!will!also!be!necessary!to!implement!measures! to! meet! the! requirements! and! this! will! in! turn! mean! that! resources! must! be! dispensed.!The!Energy!Efficiency!Unit!within!the!Company!has!begun!their!work! with! identifying! and! mapping! the! energy! aspects! and! impacts! of! the! company.! However,! the! existing! environmental! management! system! does! not! cover! the! scope! of! the! EED! and! corresponding! Swedish! law,! and! therefore! factors! to! succeed! with! improving! energy! efficiency! as! well! as! measures! to! fulfill! the! legislations!needs!to!be!identified!respectively!implemented.!Consequently!it!is! desirable! for! the! Company! as! well! as! for! other! companies! to! increase! their! knowledge! for! how! to! succeed! in! managing! energy! and! develop! methods! and! processes! for! working! with! energy! performance! that! secure! a! continuous! improvement!according!to!the!EED.!!

1.3 Objective.and.research.questions.

• How! can! large! companies! manage! the! increasing! pressure! on! improving! energy!performance!and!fulfill!the!Energy!Efficiency!Directive?!

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• What! measures! are! needed! to! improve! energy! performance! in! large! companies!within!the!framework!of!the!Energy!Efficiency!Directive?!

1.4 Contextualization.

Energy! has! become! an! important! topic! within! sustainability! and! there! are! increasing!requirements!on!companies!to!reduce!their!energy!use!and!increase! their! energy! efficiency.! (European! Commission,! 2014b)! Electricity,! fuels,! heat,! and! steam,! which! can! be! purchased,! stored,! treated! and! used! in! equipment! or! process,!are!examples!of!energy.!Further,!ISO!(2011)!defines!energy!efficiency!as! “!the!ratio!or!other!quantitative!relationship!between!an!output!of!performance,! service,!goods!or!energy,!and!an!input!of!energy”.!(International!Organization!for! Standardization,! 2011)! The! increased! awareness! of! how! various! actions! affect! the! environment! has! created! expectations! from! both! the! government! and! the! society!that!companies!should!take!responsibility!and!work!with!improving!their! energy!efficiency.!(Dobers!&!Wolff,!1997)!!

1.4.1 Increasing.pressure.on.energy.efficiency.

The! Energy! Efficiency! Directive! and! corresponding! Swedish! law! requires! that! companies!are!aware!of!their!energy!use!and!work!more!actively!within!this!area! to!improve!their!energy!performance.!A!pressure!on!companies!to!change,!and!in! this! case! focus! more! on! reducing! their! energy! use! and! improve! their! energy! efficiency,! is! named! transformation! pressure.! (Dahmén,! 1970;! Hong! &! Pham,! 2014)!

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A! company! with! a! problemeoriented! view! is! steered! by! the! surroundings! and! work!reactively!on!new!requirements.!Within!the!area!of!increased!pressure!on! environmental!performance,!the!focus!in!a!problemeoriented!company!is!on!how! to! reach! legislative! requirements! and! make! appropriate! investments! in! new! equipment!to!take!responsibility!for!the!environment.!Companies!that!consider! the! increased! pressure! as! an! opportunity! work! according! to! their! own! values! and! create! a! culture! and! mission! to! overcome! the! increased! pressure.! To! establish!a!company!culture!that!considers!the!environment,!a!company!works! actively! both! internally,! by! engaging! the! employees,! and! externally! by! putting! requirements!on!suppliers!and!by!that!steer!the!surroundings!to!improve!their! work!environmentally.!(Dobers!&!Wolff,!1997)!

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Considering! the! opportunities! with! the! increasing! pressure! on! improving! a! company’s! energy! performance,! a! company! can! both! increase! their! competitiveness!on!the!market!and!reduce!costs.!Also,!possibilities!owing!to!new! markets!for!energy!efficient!solutions!appear.!There!will!be!a!higher!demand!on! innovative! energy! efficient! products! and! solutions,! and! companies! using! this! opportunity! and! enter! such! market! can! increase! their! competitiveness.! On! the! other! hand,! the! increasing! legislative! requirements! because! of! the! EED! and! Swedish!law,!and!demands!from!the!society!on!increasing!energy!efficiency!can! be! seen! as! a! negative! transformation! pressure! within! companies.! It! becomes! a! necessity! to! adapt! and! change! ways! of! working! to! survive! on! the! market.! (Dahmén,!1970;!The!European!Union,!2012)!!

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Because! of! the! EED! and! Swedish! law,! companies! need! to! increase! their! awareness! and! map! their! energy! use,! but! if! a! company! wants! to! change! and! achieve!longeterm!results!in!increased!energy!efficiency!the!opportunities!should! be! in! focus.! Also,! in! some! cases! the! company! management! can! see! many! advantages!to!also!move!beyond!compliance!and!further!develop!a!commitment! to! continual! improvement! and! ongoing! environmental! and! energy! efficiency! consideration.!In!those!cases!the!energy!management!can!be!expanded!beyond! the!scope!of!the!EED!and!Swedish!law!due!to!positive!pressures.!(Hong!&!Pham,! 2014)! 1.4.2 Energy.Efficiency.Directive.and.corresponding.Swedish.law. The!European!Commission!aims!to!reduce!the!primary!energy!use!within!the!EU! by!increasing!the!energy!efficiency!with!20!percent!until!2020.!Primary!energy!is! defined! as! “gross! inland! consumption,! excluding! noneenergy! uses”. Yet! the! forecast!in!2010!showed!that!new!measures!are!needed!in!order!to!achieve!the! target.! The! prognosis! from! 2007! showed! that! the! primary! energy! use! will! be! 1842!Million!ton!oil!equivalents!(Mtoe)!in!2020!and!a!decrease!with!20!percent! means!that!the!number!should!be!down!to!1474,!which!is!a!reduction!with!368! Mtoe.!This!is!illustrated!in!Figure!2.!(The!European!Union,!2012)!!

! Figure'2:'Projections'of'primary'energy'use'in'year'2020'showing'the' difference'between'prognosis'of'energy'use'in'2007,'the'energy'efficiency' goal'set'by'the'European'Union'and'the'forecast.''' There!is!a!small!difference!between!goal!and!forecast!according!to!Figure!2.!This! represents!the!1e2!percent!within!which!the!energy!efficiency!target!will!not!be! reached,!considering!today’s!projections.!In!order!to!reach!the!target!and!set!a! common! framework! for! future! energy! work! within! EU! the! Energy! Efficiency! Directive!was!issued!in!2012.!The!directive!requires!that!all!countries!within!the! Union! shall! report! their! progress! with! the! national! energy! efficiency! targets! yearly,! and! every! third! year! present! a! national! plan! of! actions! in! order! to! increase!the!energy!efficiency.!The!action!plan!shall!include!revised!estimates!of! the! predicted! primary! energy! use! in! 2020.! (The! European! Union,! 2012)! The! majority!of!the!EED!provisions!was!transposed!into!Swedish!national!law!by!15th_! of!May!2014!and!came!into!force!by!1st_{!of!June!2014.!(Statens!energimyndighet!,!} 2015!)!

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The! member! states! shall! ensure! that! large! companies! are! objects! for! independent!and!cost!effective!energy!auditing!according!to!national!legislation! at!the!latest!of!5th_{!of!December!2015!and!every!fourth!year!after.!(The!European!} Union,!2012)!The!International!Organization!of!Standardization!(2011)!defines! an! energy! audit! as! “a! systematic! inspection! and! analysis! of! energy! use! and! energy! consumption! of! a! site,! building,! system! or! organization! with! the! objectives! of! identifying! energy! flows! and! the! potential! for! energy! efficiency! improvements!and!reporting!them!“.!Though,!if!a!company!has!an!environmental! or! energy! management! system! that! is! certified! according! to! national! or! international!standards!and!includes!the!requirements!from!the!EED!before!the! 5th_{!of!December!2015,!they!are!exempted!from!the!requirement!to!conduct!the!} 0! 200! 400! 600! 800! 1000! 1200! 1400! 1600! 1800! 2000!

Prognosis'from'2007' Goal' Forecast' Mtoe'

energy!audit!before!the!same!date.!Thus,!the!member!states!need!to!ensure!that! the! environmental! or! energy! management! system! within! these! companies! includes!requirements!on!conducting!energy!audits!according!to!requirements!in! the!EED.!(The!European!Union,!2012)!A!company!that!has!operations!in!different! countries!will!be!handled!by!the!various!national!legislations!where!the!plant!is! located! and! may! need! to! provide! information! regarding! energy! audit! to! the! authorities!in!each!country.!(Statens!energimyndighet!,!2015!)!

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The!Swedish!government!has!set!national!goals!within!the!20e20e20!targets,!and! their! goals! for! year! 2020! are! 20! percent! energy! efficiency! improvements! compared! to! 2008.! (Miljöe! och! Energidepartementet,! 2015)! Based! on! the! European! Commission’s! Energy! Efficiency! Directive,! the! Swedish! government! has! issued! the! law! (2014:266)! about! energy! audits! in! large! companies,! which! aims! to! promote! improvements! of! energy! efficiency.! The! law! states! that! the! energy!audit!shall!include!detailed!review!of!the!energy!usage!in!a!company!and! further! suggestions! for! costeeffective! measures! to! save! energy! and! improve! energy!efficiency.!!(The!Swedish!Government,!2014)!The!conducted!audit!shall! be!made!according!to!an!international!ISO!standard,!European!EN!standards!or! Swedish! SSestandard! or! equivalent,! which! requires! energy! auditing! in! accordance! with! the! law! on! energy! audits! of! large! companies.! Other! systematically! described! energy! audits! thereof! or! equivalent! may! be! used! in! large!companies!with!their!own!implemented!systems!for!energy!audit.!(Swedish! Energy! Agency,! 2014)! In! the! next! chapter! it! is! described! how! to! introduce! the! Swedish! law! about! energy! auditing! in! large! companies,! which! differs! from! the! EED.! The! reason! is! that! a! directive! includes! common! goals! for! EU! and! every! county! decides! what! legislation! that! is! needed! in! order! to! fulfill! these! goals.! (Sveriges!Riksdag,!2014)!!

1.4.3 Introducing.the.law.

The!Swedish!Energy!Agency!(SEA)!is!the!authority!overseeing!the!Swedish!law! (2014:266)! on! energy! audits! in! large! companies! and! is! responsible! for! the! regulations! that! have! been! issued! in! connection! with! the! law.! Provisions! included!in!the!regulations!are!for!implementation!and!reporting!of!the!energy! audits! as! well! as! rules! for! certification! of! the! management! system! and! the! person(s)! who! may! undertake! the! audits.! (Swedish! Energy! Agency,! 2014)! The! SEA!is!planning!to!introduce!the!law!in!three!steps!according!to!Figure!3.!!

! Figure'3:'The'Swedish'Energy'Agency's'three'steps'to'introducing'the'law.'' Firstly,!by!the!5th_{!of!December!a!company!needs!to!report!if!they!are!covered!by!} the!law!and!which!parts!of!the!business!that!will!be!audited.!The!second!step!is! to!report!that!the!company!has!contracted!a!certified!auditor!or!ensured!internal! resources!for!conducting!energy!audits,!and!that!all!relevant!data!is!available!for! planning!and!conducting!the!energy!audit.!When!the!energy!audit!is!completed!it! shall! be! reported! to! the! Swedish! Energy! Agency! and! saved! within! the! organization,! which! is! the! last! and! third! step! according! to! Figure! 3.! ! (Swedish! Energy! Agency,! 2015)! The! end! product! of! the! work! shall! be! presented! in! a! written!report!to!be!filed!for!at!least!seven!years!and!specific!key!figures!shall!be! reported!to!the!Swedish!Energy!Agency!(SEA).!(The!Swedish!Government,!2014)! !

The! energy! audit! shall,! according! to! the! regulations;! “include! an! overall! description! of! the! company's! total! energy! consumption! and! a! more! detailed! survey! of! the! activities! or! areas! that! correspond! to! the! company's! significant! energy!use.!Boundaries!and!priorities!for!the!energy!audit!should!be!set!in!order! for! the! survey! to! provide! a! representative! picture! of! a! company's! total! energy! usage”.! The! audit! shall! also! include! identification! of! costeeffective! measures! to! improve!energy!efficiency!and!these!shall!be!documented,!monitored!and!later! on!evaluated!and!verified!when!implemented.!Onesite!visits!shall!be!conducted!to! ensure! a! representative! picture! of! a! company’s! organization,! buildings! and! transports.! There! are! also! competency! requirements! on! the! person! conducting! the!energy!audit.!The!auditor!needs!to!have!experience!in!working!with!energy! efficiency!and!energy!auditing!or!energy!management.!Depending!on!education,! at!least!three!years!of!working!experience!is!required!but!in!many!cases!longer! working!experience!is!required.!(Swedish!Energy!Agency,!2014)!!

!

There! are! two! possibilities! to! comply! with! the! requirements! of! contracting! a! certified! energy! auditor! in! the! law.! Either! a! company! engages! an! independent! third! party,! who! meets! the! competence! requirements,! to! conduct! a! complete!

There!are!several!standards!for!management!systems!that!companies!can!follow! and! be! certified! within,! which! correspond! to! the! second! possibility! for! large! companies! according! to! Figure! 4.! Those! considered! in! this! investigation! are! mainly! issued! by! the! International! Organization! for! Standardization! (ISO)! and! the! standards! have! been! customized! to! an! European! standard! and! a! Swedish! standard,! indexed! by! EN! respectively! SS.! The! ISO! standards! for! environmental! management!systems,!ISO!14001,!and!energy!management!systems,!ISO!50001,! are! considered! in! this! study! where! ISO! 50001,! that! focus! on! energy,! has! requirements!on!conducting!energy!audits.!However,!ISO!14001!does!not!include! requirements! on! energy! audits! and! to! fulfill! the! EED! and! by! using! an! environmental! management! system,! this! requirement! needs! to! be! added.! Further,! within! these! international! standards! the! companies! are! obligated! to! comply!with!all!legislative!and!other!relevant!requirements.!!

!

The! standards! provide! an! organization! with! managerial! practices! that! guides! them! in! how! to! implement! a! management! system! and! achieve! continuous! improvements.! However,! it! is! each! organizations! responsibility! to! build! the! management! system! according! to! their! organization! with! for! example! setting! targets!and!criteria!for!measuring!environmental!performance.!(Boiral!&!Henri,! 2012)!!In!this!study,!management!systems!standards!are!therefore!considered!as! toolboxes.! Besides,! it! is! important! to! understand! that! the! management! system! standards!are!one!solution!among!many.!!!

1.5 Delimitations.

This! investigation! is! delimited! to! large! companies! in! Sweden,! in! which! large! companies! is! defined! by! the! Energy! Efficiency! Directive! and! corresponding! Swedish!law.!Sweden!has!set!its!own!energy!efficiency!targets!as!well!as!issued!a! national!legislation!based!on!the!EED.!It!is!therefore!needed!to!analyze!countries! individually!and!by!that!also!companies!working!within!these!countries.!In!order! to! clarify;! this! study! considers! both! the! effect! of! the! EED! and! corresponding! Swedish! law! on! large! companies! in! Sweden! since! the! Swedish! law! is! based! on! the!EED.!!Further,!the!Swedish!Energy!Agency!has!stated!regulations!according! to! the! Swedish! law! about! energy! audits! in! large! companies,! which! is! a! part! of! fulfilling! the! Energy! Efficiency! Directive.! Their! statements! are! used! in! order! to! understand! the! law! and! what! is! required! from! companies! but! their! role! in! evaluating!and!follow!up!on!companies!if!they!work!according!to!the!directive!is! not!further!analyzed.!!

!

system.! Since! this! study! focuses! on! how! to! manage! energy! efficiently! within! a! company!the!option!of!using!a!third!party!is!discussed!briefly.!

!

Within!the!EED!there!are!requirements!on!having!certified!management!systems! according! to! a! standard! when! conducting! the! energy! audit! with! internal! resources.! The! standards! within! management! systems! and! energy! auditing! considered! in! this! study! are! issued! by! the! International! Organization! of! Standardization! since! they! are! most! commonly! used.! Also,! the! Company! and! participating! companies! in! the! complementary! study! are! certified! according! to! ISO! standards.! Further,! to! identify! key! factors! and! measures! to! succeed! with! energy! management,! several! nonecertified! energy! management! systems! are! analyzed.!!!!

1.6 Outline.

This! report! begins! with! an! introduction! to! the! subject! of! sustainability! and! energy,! where! the! Energy! Efficiency! Directive! and! management! systems! are! introduced,!according!to!Figure!5.!Following,!a!deeper!explanation!of!the!context! is! presented,! which! includes! the! transformation! pressure! on! improving! energy! performance! in! a! company,! the! EED! and! the! Swedish! law.! The! methodology! describes!the!different!choices!of!methods!that!have!been!used!to!conduct!this! study!and!analyses!how!the!choices’!affect!the!quality!and!ethical!aspects!of!the! research.!! ! ! Figure'5:'The'outline'of'this'report.'

The! chapter,! Management! systems,! ISO! standards! and! energy! auditing,! presented! after! the! methodology! as! seen! in! Figure! 5,! includes! theory! on! the!

three! areas.! A! comparison! between! several! energy! management! models! is! presented! in! order! to! get! a! deep! understanding! of! how! to! manage! energy! efficiently.! Further,! ISOestandards! are! presented! with! an! analysis! on! previous! research! on! how! successful! these! standards! are.! The! last! part! of! this! chapter! covers!energy!audits!and!explains!different!types,!as!well!as!how!to!conduct!an! energy! audit! and! use! the! information! efficiently.! This! part! of! the! report! builds! the!foundation!of!theory!for!analyzing!the!empirical!material.!!

!

2. Methodology.

This%chapter%describes%the%methodology%used%in%this%study%and%evaluates%the%quality% of%the%research.%Also,%an%illustration%of%the%data%analysis%is%presented.%This%provides% the%reader%with%an%understanding%of%how%the%study%has%been%conducted.%%

!

In! order! to! answer! the! research! questions! and! fulfill! the! objective! several! methods! for! gathering! information! has! been! used.! These! include! literature! review,!interviews,!complementary!study,!and!expert!opinions.!Since!this!area!of! investigation!is!based!on!the!Energy!Efficiency!Directive!issued!by!the!European! Union,! documents! regarding! the! directive! and! the! corresponding! Swedish! law! were! analyzed.! These! are! however! general! and! an! experienced! professional! at! the!Swedish!Energy!Agency!was!consulted!to!get!a!more!specific!understanding! and!knowledge!of!the!definitions!and!the!requirements.!In!order!to!understand! how! companies! manage! their! work! with! increasing! their! energy! efficiency! as! well! as! handling! the! increasing! demands! on! reducing! energy! use,! a! qualitative! approach!has!been!used.!This!was!done!since!collected!data!is!transient,!and!can! therefore! change,! and! it! is! also! based! on! people’s! interpretations.! (Collis! &! Hussey,! 2009;! Patton,! 2015)! To! analyze! how! the! Company! works! to! increase! their! energy! efficiency! as! well! as! how! they! manage! the! increasing! pressure! on! becoming! more! energy! efficient,! interviews! within! the! Company! were! conducted.!In!order!to!get!a!broader!understanding!of!the!process!of!increasing! the!focus!on!energy!efficiency!and!its!management,!two!companies!covered!by! the! EED,! respectively! three! experts! within! the! areas! were! consulted.! By! using! several!sources!to!gather!empirical!information,!the!subjectivity!that!can!occur! while!investigating!one!company!as!a!case!is!reduced.!(Scapens,!1990)!Since!the! qualitative!data!in!this!study!needed!to!be!understood!within!context!(Collis!&! Hussey,!2009),!other!written!sources!were!used.!Previous!work!was!investigated! in! order! to! get! a! broader! understanding! of! the! subject! in! general! as! well! as! substantiate! the! findings.! These! sources! were! chosen! regarding! relevance! and! credibility.!!!

2.1 Document.analysis.

In! a! qualitative! study,! document! analysis! is! an! important! source! for! gathering! information.! (Patton,! 2015)! To! get! a! deep! understanding! of! the! EED! and! corresponding! Swedish!law,! which! this! study! is! based! on,! a! document! analysis! was! conducted.! The! documents! analyzed! included! the! directive! and! its! associated!articles,!the!Swedish!law!and!its!related!regulations!issued!by!the!SEA.! Within!this,!the!requirements!were!identified!and!summarized.!However,!these! were!somewhat!unclear!and!to!strengthen!the!findings!employees!working!at!the! SEA!were!consulted.!Since!the!SEA!continuously!develops!instructions!for!how!to! introduce! the! law,! the! document! analysis! was! an! iterative! process! throughout! the!whole!study.!!

2.2 Interviews.

Company!as!well!as!information!from!the!different!divisions!in!the!organization.! To! get! inedepth! information! and! also! gather! the! interviewees’! opinions,! semie structuring! the! interviews! were! considered! appropriate.! Semiestructured! interviews!are!appropriate!when!exploring!and!gathering!broad!information!and! when! the! subject! includes! several! aspects! not! logically! linked! together.! (EasterbyeSmith! et! al.,! 2002)! Having! more! unstructured! interviews! were! considered!inappropriate!since!there!is!a!larger!risk!of!losing!focus.!Further,!for! this!type!of!study!where!broad!information!was!to!be!gathered!including!peoples! interpretations,! more! structured! interviews,! which! in! general! focus! on! getting! factual! information,! would! not! have! covered! all! information! needed.! All! interviewees!are!kept!anonymous!to!increase!the!truthfulness!of!the!information! as! well! as! for! the! interviewee! to! be! confident! explaining! his/hers! opinions.! (Collis!&!Hussey,!2009)! ! The!interviews!were!divided!into!five!themes;!general!information,!management! systems,!energy!efficiency,!EED!and!mapping!of!environmental!factors,!and!the! template!for!the!interviews!within!the!Company!can!be!seen!in!Appendix!1.!This! was!done!in!order!to!get!overall!information!about!the!current!work!within!the! Company! and! information! in! all! relevant! areas! for! this! study.! Since! the! interviews! were! semiestructured! the! template! worked! as! a! frame! for! the! interviews,! but! additional! questions! were! asked! depending! on! the! interview.! Also,! if! interesting! information! was! gathered! during! the! different! interviews,! questions! were! sometimes! added! to! the! template! for! continuing! interviews! in! order!to!validate!the!findings.!

!

The! interviews! were! between! 40! minutes! and! one! hour.! They! were! conducted! during!different!days!during!a!period!of!three!weeks.!Notes!were!taken!during!all! interviews! and! the! interviewees! were! asked! for! permission! to! record! the! interview,!which!all!agreed!upon.!By!recording!the!interviews!it!was!possible!to! reelisten! and! therefore! avoid! any! uncertainties! regarding! the! information.! The! notes!were!used!as!summarizes!of!the!interview!and!also!containing!important! statements!observed!during!the!interview!that!could!be!useful!for!the!analysis.! All! interviewees! were! also! asked! for! permission! for! further! contact! if! more! questions,!which!all!agreed!upon.!!!

!!

these!are!further!explained!in!the!following!paragraphs.!The!experts!are!indexed! according!to!Table!1!in!the!report.!! ! Table'1:'Indexation'of'expert'opinions.'' Index' Expert' E1! Swedish!Energy!Agency! E2! Certification!authority! E3! Management!consultancy! !

An! expert! from! the! Swedish! Energy! Agency! was! consulted! regarding! the! EED! and! the! Swedish! law! to! get! a! deeper! understanding! of! those! as! well! as! information! about! how! their! work! proceeds.! The! Swedish! Energy! Agency! is! responsible! for! implementing! the! law! and! is! therefore! important! to! consult! in! this!study.!The!expert!consulted!is!one!of!the!responsible!for!implementing!the! EED!and!therefore!has!large!insights!in!the!requirements!and!progression!of!the! SEA’s!work.!In!addition,!to!get!information!about!the!rules!and!regulations!the! expert!provided!information!about!how!SEA!try!to!encourage!companies!to!work! continuously! with! energy! efficiency! and! how! they! cooperate! with! large! companies!to!ensure!that!the!requirements!are!reasonable.!! ! One!of!the!most!important!parts!during!business!development!is!to!incorporate! the!change!in!a!strategy.!(Mintzberg,!1987)!Therefore,!a!management!consultant! working!as!the!head!of!a!corporate!management!consultant!function!in!a!large! industrial!company!was!consulted!as!an!expert!opinion!regarding!strategies!and! strategy!development.!The!management!consultant!does!not!work!closely!with! energy! efficiency! and! therefore! gave! general! information! about! strategic! work! and!important!steps!in!succeeding!with!new!requirements.!!!!!

!

In!the!Energy!Efficiency!Directive!it!is!described!that!either!a!company!need!to! consult!a!certified!energy!auditor!to!conduct!the!energy!audit!or!a!company!has!a! certified! environmental/energy! management! system! and! conduct! the! energy! audit!with!internal!resources.!Either!way!a!certifier!is!needed.!Because!of!these! requirements,! a! certification! authority! was! consulted! to! understand! their! requirements!and!the!reasons!for!why!companies!chose!to!get!certified.!!

2.4 Complementary.study.

company!in!the!complementary!study!is!named!Case!A!and!the!second!is!named! Case!B.!!!

!

The! first! company! compared! with,! named! Case! A,! was! valuable! for! this! study! since! it! revised! a! large! company! that! has! already! begun! their! work! with! improving! their! energy! performance! and! are! currently! reviewing! the! Swedish! law! based! on! the! EED.! An! energy! manager! was! consulted! who! is! involved! in! energyerelated! matters! including! energy! performance.! They! already! have! an! environmental! management! system! according! to! ISO! 14001,! integrated! with! other! standards! including! quality,! health! and! safety,! in! place! and! they! have! earlier!started!an!energy!auditing!program!because!of!increasing!requirements! from! top! management! to! reduce! carbon! dioxide! emissions.! They! are! however! not!planning!to!implement!and!integrate!ISO!50001!in!their!current!system!and! the! focus! of! the! energy! audits! are! today! on! simple! spaces! such! as! office! space,! improved!ventilation,!heating,!lighting.!The!top!management!did!not!understand! the!possibilities!of!saving!energy!until!a!few!years!ago!but!with!their!increasing! commitment!the!energy!work!has!become!an!important!part!on!the!agenda.!Case! A!uses!a!third!party!to!conduct!the!energy!audit.! !! Case!B!is!a!large!company!certified!according!to!the!environmental!management! system! standard! ISO! 14001,! integrated! with! other! standards! including! quality,! health! and! safety,! and! they! have! set! their! own! energy! efficiency! targets! and! previously! conducted! energy! audits! within! their! organization,! which! makes! them!interesting!to!study.!Two!environmental!managers!were!consulted!who!are! involved!in!both!increasing!the!company’s!energy!efficiency!as!well!as!working! with!the!management!systems.!It!is!explained!that!the!company!has!previously! made! an! energy! audit! as! the! Swedish! court! made! this! demand! because! they! practice! environmentally! hazardous! activities.! Case! B! has! their! own! internal! certification! system! besides! ISOecertifications! where! they! consider! aspects! important! for! their! particular! organization.! They! explain! that! they! will! include! the!new!demands!from!EED!in!the!existing!management!system.!The!company! emphasize! that! ISO! is! a! framework! but! its! results! depends! on! how! a! company! uses! it.! Case! B! uses! internal! resources! to! conduct! the! energy! audit! and! work! actively! with! their! management! systems.! The! top! management! demonstrates! that!energy!work!is!important!and!has!for!example!decided!that!measures!that! have! longer! payback! but! are! better! in! terms! of! energy! performance! can! be! prioritized,!although!there!are!less!expensive!measures!available.!

2.5 Data.analysis.

When! using! a! qualitative! data! approach! and! analyzing! it! qualitatively! it! is! important! to! continuously! collect! and! reduce! data.! (Collis! &! Hussey,! 2009)! During! this! study,! the! facts! have! therefore! been! collected! in! different! forms! throughout! the! whole! project! and! after! each! part! that! data! has! been! analyzed.! The!data!has!been!analyzed!both!separately!within!and!between!the!five!areas! shown! in! Figure! 6.! By! using! this! approach,! a! deep! understanding! in! each! area! was! collected.! Also,! the! areas! were! analyzed! during! the! process,! which! is! important!for!a!qualitative!study.!(Collis!&!Hussey,!2009)!

!

Figure'6:'The'data'analysis'in'this'study.'

Figure! 6! shows! that! the! process! of! this! study! began! with! analyzing! rules! and! regulations!regarding!the!Energy!Efficiency!Directive!and!the!Swedish!law.!With! that! information,! the! requirements! that! companies! are! facing! were! mapped.! Further,! an! extensive! literature! was! conducted! focusing! on! management! systems,! which! included! analyzing! several! energy! management! models,! and! energy! auditing.! This! focus! was! chosen! in! order! to! understand! the! option! of! including!the!requirements!on!energy!auditing!in!a!management!system!and!how! the!energy!work!should!be!managed!efficiently.!This!information!was!a!helping! tool!when!structuring!the!interviews,!conducting!the!complementary!study!and! consulting! the! experts.! The! empirical! data! from! interviews,! complementary! study,! experts! and! mapped! requirements! were! first! analyzed! separately! and! then! compared! to! conclude! themes! to! focus! on.! Further,! the! themes! were! analyzed!in!relation!to!the!requirements!in!the!EED!and!Swedish!law!as!well!as! the!theory!gathered!from!literature,!which!explains!the!vertical!arrow!on!the!left! side! of! the! different! areas.! The! horizontal! arrow! above! the! different! areas! represent! the! separate! analysis! done! within! each! area,! described! in! the! beginning! of! this! paragraph.! Finally,! after! analyzing! the! different! information! and!data!gathered!in!this!study!separately!and!in!combination,!the!results!of!how! large! companies! should! manage! the! transformation! pressure! on! improving! energy!performance!and!what!measures!companies!need!to!implement!to!fulfill! the!EED!and!the!Swedish!law!was!concluded.!! 2.6 Quality.of.research. The!study!is!evaluated!according!to!reliability,!validity!and!generalizability!to!be! able!to!state!the!quality!of!the!research.!(Collis!&!Hussey,!2009)!! 2.6.1 Reliability.

a! repeated! study! can! be! done! and! provide! the! same! results.! (Collis! &! Hussey,! 2009;!Merriam,!2009)!This!study!is!based!on!semiestructured!interviews,!which! during!the!interviews!have!had!different!focus!areas,!and!it!is!thereby!difficult!to! repeat!the!study!with!the!same!results.!Further,!this!study!is!based!on!qualitative! data,!which!often!is!characterized!by!low!reliability.!(Collis!&!Hussey,!2009)!! To!increase!the!reliability!of!this!study!transparency!of!the!empirical!material!is! important.!Therefore!it!is!presented!which!roles!the!interviewees!had!and!how! the! interviews! were! conducted.! Also,! the! interview! guideline! can! be! found! in! Appendix!1.!However,!since!the!interviews!were!semiestructured!areas!brought! up! during! the! interviews,! beyond! the! interview! guideline! but! that! were! considered! interesting! are! not! included! and! can! therefore! affect! the! reliability.! This!is!not!considered!as!a!major!issue!in!this!study!since!valuable!information! was!possible!to!be!gathered!when!exploring!other!areas!relating!to!the!subject! without!losing!focus.!Also,!the!results!from!the!interviews!are!presented!in!the! report! in! relation! to! theory.! However,! the! promised! anonymity! for! the! interviewees!is!lowering!the!reliability!but!it!is!considered!to!give!more!honest! and!trustworthy!information!when!it!is!not!possible!to!identify!the!interviewee.! Further,!the!interviews!were!held!in!Swedish,!which!both!the!interviewees!and! interviewers! were! most! comfortable! with,! which! could! have! affected! the! reliability! because! of! translation! issues.! This! is! however! not! considered! as! a! major! issue! since! there! is! less! risk! of! misunderstandings! when! using! the! language!all!parties!are!most!comfortable!with.!!

2.6.2 Validity.

When!the!results!of!a!study!accurately!reflect!the!studied!phenomena!the!validity! is! high.! Qualitative! data! is! often! transient! and! needs! to! be! understood! within! context.! (Collis! &! Hussey,! 2009;! Patton,! 2015)! Therefore! several! methods! for! gathering! empirical! material! were! used! in! order! to! understand! how! energy! is! managed! today,! different! perspectives! of! the! EED! and! corresponding! Swedish! law! as! well! as! to! be! able! to! identify! important! factors! to! manage! energy! efficiently.!!!

!

interview! guideline! were! brought! up,! questions! within! these! areas! were! asked! on! following! interviews! to! validate! the! findings.! All! gathered! information! was! analyzed! qualitatively! which! implies! that! the! issues! with! semiestructured! interviews!do!not!affect!the!validity!negatively!to!a!high!degree!and!therefore!not! considered!as!a!problem!in!this!study.!The!answers!presented!in!the!report!are! reflecting!all!answers!of!interest!regarding!that!subject!and!if!an!interviewee!is! not!mentioned!it!means!that!the!interviewee!did!not!answer!the!question.!!When! gathering!information!from!the!experts!! ! Besides!the!interviews,!the!empirical!information!gathered!from!experts!and!the! complementary! study! made! it! possible! to! compare! and! confirm! the! gathered! information.! Also,! it! was! important! that! the! case! companies! were! not! competitors!to!the!Company!and!anonymous!both!because!of!ethical!aspects!as! well!as!the!possibility!to!get!the!desired!information.!This!increases!the!validity! further! since! the! possibilities! that! the! results! reflect! the! studied! phenomena! increases.!!

2.6.3 Generalizability.

3. Management.systems,.ISO.standards.and.energy.auditing.

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Because!of!the!increasing!legislative!requirements!there!is!a!need!for!companies! to! become! more! energy! efficient.! Also,! with! many! options! available,! the! expectations!are!higher!on!a!company!to!satisfy!their!customers!as!well!as!the! stakeholders.! In! order! to! manage! this! change! it! is! important! to! continuously! learn!and!evaluate!in!combination!with!developing!a!systematic!way!of!working.! (Fenga! et! al.,! 2014)!Management! systems! are! one! way! to! ensure! a! systemized! work.!Further,!to!improve!energy!performance!and!fulfill!the!Energy!efficiency! directive! and! the! Swedish! law,! organizations! are! encouraged! to! implement! management!systems!that!include!requirements!to!conduct!energy!audits.!(The! European!Union,!2012)!

3.1 Management.systems.

A!management!system!is!a!key!factor!for!success!within!companies.!Used!in!its! most! efficient! way! it! gives! a! company! a! holistic! and! comprehensive! understanding! of! the! organization! to! achieve! high! rate! of! improvement! and! process! optimization.! This! gives! the! organization! possibilities! to! survive! in! an! increasingly! competitive! market.! (Salah! et! al.,! 2013)! In! addition! to! a! management! system! a! strategy! for! improvements! in! areas! covered! by! a! management! system! is! needed.! The! strategy! is! on! a! higher! level! than! the! management!system!and!provides!a!direction!for!the!company,!which!aims!for! the! strategic! direction! to! be! a! part! of! everyone’s! mind! when! working.! (Mintzberg,!1987)!!

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As! there! are! several! definitions! of! management! systems! there! are! also! several! opinions!of!what!a!management!system!should!include!and!how!to!work!with!a! management!system.!In!general,!there!are!four!key!functions!in!a!management! system.! These! are! performance! measurement,! reporting! of! progress,! quality! processeidentification!of!performance!gaps!and!performance!standard!practices.! Between! these! components! activities! such! as! resource! planning,! business! planning,!continuous!business!improvement!and!continuous!evaluation!are!parts! of! the! process.! (Kazmi! &! Naarananoja,! 2014)! In! previous! studies! it! has! been! shown!that!reasons!for!why!companies!do!not!succeed!with!their!management! systems!often!results!from!too!much!focus!on!technical!aspects!and!lacking!focus! on!social!aspects,!such!as!awareness!and!commitment.!(Thollander!&!Ottosson,! 2010)! The! management! systems! need! to! combine! managerial! and! technical! aspects!to!achieve!large!savings!in!respective!area!(Energywise,!2011),!and!this! is!illustrated!in!Figure!7.!! ! ! Figure'7:'Combination'between'management'and'technology'is'important' to'succeed'in'energy'management.'(Energywise,'2011)'

The! importance! of! combining! managerial! and! technological! factors! is! further! emphasized! by! Ronnenberg! et! al.! (2010),! who! describes! that! management! systems! often! focus! on! technical! aspects,! such! as! setting! goals! and! taking! measurement,!but!not!social!aspects,!such!as!awareness!and!commitment,!which! also! needs! to! be! considered! in! managing! systems.! Colleagues! are! the! most! important! information! source! among! employees! according! to! Thollander! &! Ottosson!(2010),!which!makes!the!employees!an!important!source!for!spreading! information! and! create! a! common! direction.! It! has! also! been! shown! for! both! environmental!management!systems!and!energy!management!systems!that!the! results! of! reduced! environmental! impact! respectively! improved! energy! efficiency! are! dependent! on! technical! and! managerial! aspects! but! also! on! employees’!participation!and!engagement.!(Thollander!&!Ottosson,!2010;!Boiral! &!Henri,!2012)!!!

!

Management!

The! international! organization! for! standardization! has! issued! two! general! standards! in! the! area! of! environment! and! energy;! the! environmental! management! system! (ISO! 14001)! respectively! the! energy! management! system! (ISO!50001).!These!are!further!presented!in!the!chapter!ISO!standards,!after!the! general!presentation!of!environmental!and!energy!management!systems!below.!!

3.1.1 Environmental.management.systems.

With! the! increased! awareness! of! environmental! consequences! of! different! actions! and! stricter! laws! and! regulations! there! is! an! increasing! number! of! organizations! working! to! achieve! a! high! environmental! performance.! (Testa! et! al.,! 2013)! In! addition,! the! environmental! policy! is! to! a! lager! extent! based! on! market! incentives! in! improving! environmental! performance,! which! means! that! with! more! options! available! for! improving! environmental! performance! the! stricter!the!regulation!becomes.!This!has!created!a!shift!of!how!companies!work! with! managing! their! environmental! impact.! Companies’! have! moved! from! focusing! on! regulationedriven! management! to! proactively! set! strategies! for! voluntary!work!with!environmental!management.!(Anton!et!al.,!2003)!It!has!also! been!shown!that!voluntaryedriven!management!is!better!since!regulatoryedriven! is!hard!to!handle!and!often!more!costly.!(Arimura!et!al.,!2008)!

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Adopting! an! environmental! management! system! is! voluntary! and! aims! to! improve! environmental! performance! as! well! as! provide! tools! to! achieve! longe term!results!in!reduced!environmental!impact!of!a!company.!This!means,!among! other! things,! increased! process! efficiency,! reduced! use! of! resources! and! materials,! reduced! waste! production,! and! to! continuously! reduce! the! total! environmental! impact.! (International! Organization! of! Standardization,! 2004)! It! has! been! shown! that! an! increasing! pressure! from! a! company’s! customers,! investors! and! the! public! on! a! company! to! improve! their! environmental! performance!motivates!a!company!to!improve!their!environmental!performance! by!adopting!an!environmental!management!system.!Further,!companies’!trying! to!overcome!this!pressure!by!implementing!environmental!management!systems! adopts!a!more!comprehensive!environmental!management!system!compared!to! companies!with!lower!ambitions!in!their!environmental!performance.!(Anton!et! al.,!2003)!Anton!et!al.!(2003)!argues!that!an!environmental!management!system! affects! a! company’s! environmental! performance! in! a! positive! way! and! the! pressure! from! stakeholders! affects! a! company! indirectly! to! changes! in! their! management! of! environmental! concerns.! Only! adopting! an! environmental! management!system!is!however!not!a!guarantee!to!improve!a!company’s!work! with!reducing!their!environmental!impact.!To!achieve!results!the!focus!needs!to! be!on!reducing!environmental!impact!rather!than!on!implementing!a!tool!such!as! an!environmental!management!system.!(Ammenberg!&!Hjelm,!2002)!!

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environmental! performance! of! the! organization.! (Rondinelli! &! Vastag,! 2000;! International!Organization!of!Standardization,!2004)!!

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Commitment! of! top! management! as! well! as! engagement! throughout! the! whole! organization! is! important! to! improve! environmental! performance! with! an! environmental! management! system.! (Testa! et! al.,! 2013)! This! is! further! confirmed! by! Ronnenberg,! Graham! and! Mahmoodi! (2010)! who! have! analyzed! integration! of! an! environmental! management! system! in! relation! to! change! management.! They! have! also! found! that! commitment! from! top! management! is! important! but! the! effect! on! environmental! performance! because! of! employee! involvement!depends!on!how!effectively!their!involvement!is!handled.!In!a!case! study!of!214!Chinese!manufacturing!companies!analyzing!the!relation!between! environmental!management!systems!and!organizational!learning!they!found!that! an! efficient! and! successful! environmental! management! system! is! in! need! of! commitment! to! learning’s,! shared! vision,! openemindedness! and! knowledge! sharing.! (Fenga! et! al.,! 2014)! Aspects! relating! to! how! data! is! gathered! and! analyzed! as! well! as! their! comparability! are! also! important! factors! for! success.! (Testa! et! al.,! 2013;! Boiral! &! Henri,! 2012)! Testa! et! al.! (2013)! also! describes! several! technical! aspects! important! in! energy! management! system.! These! aspects! are! that! set! targets! and! goals! corresponding! to! measurements,! clear! levels!of!reporting!and!available!data!saved!over!time!to!compare!with.!!(Testa!et! al.,!2013)!

3.1.2 Energy.management.systems.

The! reason! for! companies’! need! to! improve! their! energy! performance! is! that! energy!has!become!an!important!part!within!sustainability!and!a!resource!that! needs!to!be!managed,!as!well!as!a!requirement!in!the!Energy!Efficiency!Directive.! (European! Commission,! 2014b)! Further,! there! is! a! new! customer! tendency! where! the! customers! make! their! choices! considering! a! company’s! energy! performance! as! an! important! aspect.! This! pressure! affects! companies! to! work! more! actively! with! improving! their! energy! performance! and! manage! energy! efficiently.! (Hong! &! Pham,! 2014;! Introna! et! al.,! 2014)! Even! though! there! is! a! larger!focus!on!energy!today,!there!is!still!a!trend!within!companies!to!focus!on! their!core!business!which!lead!to!that!energy!work!is!not!enough!prioritized!in.! (Thollander!&!Ottosson,!2010)!!

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Piper! (1998)! describes! that! an! energy! management! system! mainly! should! include! three! elements;! planning,! implementation! and! control! feedback.! Planning!focus!on!creating!understanding!of!that!energy!is!a!resource!within!a! company! and! it! needs! to! be! managed! as! other! resources.! This! includes! setting! realistic! goals! and! preparing! for! measuring! energy! use.! To! prepare! for! measuring! energy,! appropriate! programs! needs! to! be! identified! and! processes! for!how!to!measure!needs!to!be!developed.!The!implementation!that!follows!the! planning! part! focuses! on! top! management! commitment! and! developing! a! database!for!how!to!store!information!regarding!energy.!It!is!necessary!for!the! top! management! to! commit! to! an! energy! management! system! if! adopted! in! an! organization,! since! resources! in! an! organization! are! limited! and! needs! to! be! prioritized! between! several! operations.! To! improve! energy! performance! resources! needs! to! be! allocated! to! energy! work.! The! function! of! an! energy! database!is!to!identify!energy!saving!opportunities!and!supports!an!organization! to!achieve!its!energy!goals.!The!last!part,!control!feedback!aims!to!evaluate!the! energy! management! systems! to! set! goals! and! provide! information! for! energy! reduction!investments.!In!this!part!the!results!of!an!organization’s!energy!work! should!be!visualized.!(Piper,!1998)! ! Vikhorev!et!al.!(2013)!have!developed!an!energy!management!system!where!the! main!parts!are!realetime!monitoring,!data!analysis,!evaluation!and!optimization.! The!authors!focus!on!technical!aspects!throughout!their!model!since!they!state,! “one! cannot! manage! what! one! does! not! measure,! so! data! collection! is! fundamental!to!energy!management”.!Realetime!monitoring!focus!on!developing! data! standards,! that! explains! how! energy! measurements! shall! be! taken! and! communication! interfaces,! that! focus! on! the! interaction! between! the! energy! management! system! and! employees! within! an! organization.! It! is! emphasized! that! measurements! need! to! be! taken! in! realetime! for! the! employees! to! understand! how! different! actions! affect! the! energy! use! directly.! Data! analysis! focus!on!establishing!key!performance!indicators!on!energy!and!set!goals,!which! gathered! data! is! compared! with.! In! the! evaluation! phase,! gathered! data! is! evaluated! and! used! as! decision! support! for! energy! reduction! investments! and! the! results! needs! to! be! visualized.! The! last! part,! optimization! focuses! on! implementing!measures!and!to!improve!an!organization’s!energy!performance.! (Vikhorev!et!al.,!2013)!

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investigate!potential!energy!reduction!projects!and!set!up!a!plan!for!investment! in!those.!(Energywise,!2011)!

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The! fourth! energy! management! model! is! developed! by! Capehart! et! al.! (2006)! and! compared! to! the! other! models;! this! has! a! larger! focus! on! organizational! structure.! In! addition! to! having! management! commitment,! an! energy! manager! working! to! ensure! continuity! in! the! energy! work,! and! an! energy! committee! to! work! with,! and! communicate! energy! are! needed.! Further,! cost! allocation! of! energy! on! each! part! of! an! organization! is! important! to! increase! the! understanding!of!how!much!energy!costs,!measurements!needs!to!be!taken!and!a! reporting! system! for! energy! needs! to! be! established,! and! training! to! increase! knowledge!of!energy!in!the!organization!are!needed.!!(Capehart!et!al.,!2006)!! !

All! energy! management! systems! show! that! there! needs! to! be! a! combination! of! managerial! and! technical! aspects! to! succeed! with! energy! management.! The! identified!managerial!and!technical!aspects!in!the!four!models!are!presented!in! Figure!9.!! ! ! Figure'9:'Managerial'and'technical'aspects'in'an'energy'management' system.'

data!standards,!developing!processes,!evaluation!of!results!and!potential!energy! reduction! projects,! and! visualization.! (Capehart! et! al.,! 2006;! Energywise,! 2011;! Piper,!1998;!Vikhorev!et!al.,!2013)!

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Capehart! et! al.! (2006)! and! Energywise! (2011),! argue! for! top! management! commitment! as! the! most! important! aspect! to! succeed! with! an! energy! management! system.! The! top! management! needs! to! show! their! commitment! from! the! beginning! when! an! organization! works! to! improve! their! energy! performance! and! implements! an! energy! management! system.! (Capehart! et! al.,! 2006)! Piper! (1998)! also! describes! its! importance! and! means! that! success! in! energy! management! and! improving! a! company’s! energy! performance! is! in! the! need! of! allocating! resources! for! energy! work.! Top! management! is! therefore! important!since!they!have!the!authority!to!provide!an!organization!with!backing,! personnel!and!financing!to!achieve!its!goals!within!energy.!(Piper,!1998)!Further,! the! top! management! has! the! authority! to! take! actions! to! improve! the! energy! performance! and! establish! motivation! among! the! employees! by! showing! their! interest.!(The!Energy!Research!Institute,!2014)!!

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Compared!to!Capehart!et!al.!(2006),!who!includes!top!management!commitment! from!the!beginning,!Piper!(1998)!argues!that!top!commitment!is!needed!in!the! implementation! part,! and! that! the! planning! part! can! be! done! without! their! commitment.!Vikhorev!et!al.!(2013)!includes!commitment!of!top!management!in! their!research,!though!it!is!not!included!in!the!energy!management!model!since!it! is!considered!a!critical!factor!through!all!parts!of!an!energy!management!system! and! always! needed! for! an! organization! to! succeed! in! any! area.! Energywise! (2011)!has!top!management!commitment!as!a!shorteterm!measure,!which!means! that! it! is! important! during! the! implementation! phase! but! their! commitment! is! not! as! important! in! the! longeterm.! There! are! differences! about! when! top! management!should!be!integrated!in!a!management!system!but!it!is!clear!that!it! is!an!important!factor!to!manage!energy!efficiently.!

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For! the! top! management! to! show! commitment! they! shall! establish! an! energy! policy! that! describes! the! direction! of! a! company’s! energy! work! and! the! management’s! interest! in! improving! the! company’s! energy! performance.! (Energywise,! 2011)! Gopalakrishnan! et! al.! (2014),! who! have! analyzed! the! implementation!of!ISO!50001!in!manufacturing!companies,!confirms!that!the!top! management!establishes!the!energy!policy,!which!builds!a!framework!for!actions! the!organization!shall!take!in!energy!and!setting!objectives,!and!they!should!also! be!part!of!reviewing!internal!energy!audits.!To!prioritize!and!provide!resources,! such!as!staff!and!money,!for!energy!work!is!crucial!to!show!the!organization!that! energy!is!important.!(Capehart!et!al.,!2006;!Piper,!1998)!Specifically,!resources!in! staff! such! as! assigning! an! energy! manager! and! energy! committee! need! to! be! provided!by!the!top!management,!(Gopalakrishnan!et!al.,!2014)!and!they!need!to! be!open!to!and!prioritize!energy!investment!suggestions.!(Capehart!et!al.,!2006)!! !

study.!(Capehart!et!al.,!2006;!Energywise,!2011;!Piper,!1998)!Energywise!(2011)! has!delegation!of!responsibilities!as!a!shorteterm!measure,!which!means!that!the! role! is! set! during! the! implementation! of! an! energy! management! system.! It! is! described! that! the! energy! manager! works! across! an! organization! with! identifying! energy! saving! opportunities! and! communicate! the! importance! of! working!with!energy!in!an!organization.!(Energywise,!2011)!Also,!Capehart!et!al.! (2006)! has! energy! manager! as! an! individual! part! of! the! energy! management! system!and!the!main!responsibilities!for!that!role!is!to!ensure!continuity!in!the! energy! work,! which! is! similar! to! the! description! by! Energywise! (2011).! The! energy!manager!shall!report!up!in!the!organization!in!order!to!make!sure!that! the! top! management! is! aware! of! the! company’s! energy! performance! and! in! return! the! top! management! is! willing! to! support! the! energy! manager! with! resources! and! staff.! In! large! organizations! it! is! needed! to! have! an! energy! manager!for!each!division!as!well!as!for!each!plant.!(Capehart!et!al.,!2006)!Piper! (1998)! describes! the! importance! of! having! an! energy! manager! in! his! research! but! has! not! included! delegation! of! responsibilities! in! the! energy! management! model.!Compared!to!Capehart!et!al.!(2006)!and!Energywise!(2011),!Piper!(1998)! argues! that! the! energy! manager! is! part! of! setting! up! the! energy! management! system!and!not!included!throughout!the!system.!!

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Rewarding! employees! working! with! energy! and/or! contributing! to! improving! the!energy!performance!is!an!important!activity!to!motivate!employees!and!for! the! top! management! to! show! their! interest! in! energy! work.! (Capehart! et! al.,! 2006;! Energywise,! 2011)! Energywise! (2011)! argues! that! an! energy! reward! program! needs! to! be! established! as! a! shorteterm! measure! within! engaging! top! management,! and! employees! in! the! organization! should! be! assigned! energy! champions.!In!management!commitment!in!Capehart!et!al.!(2006)!model,!reward! employees’!is!an!important!part!and!one!of!the!first!parts!the!authors!describe! for!an!energy!management!system,!similar!to!the!model!by!Energywise!(2011).! By! rewarding! employees,! the! motivation! to! continue! working! with! energy! increases! and! it! creates! an! understanding! of! how! different! actions! affect! a! company’s! energy! performance.! Also,! top! management! needs! to! continuously! show! their! interest! by! including! energy! in! their! communication! to! their! employees!as!well!as!prioritize!energy!investment!suggestions.!(Capehart!et!al.,! 2006)! To! communicate! energy! efficiently,! already! established! communication! channels!should!be!used.!(Energywise,!2011)!

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Creating! awareness! in! an! organization! is! important! to! avoid! information! gaps,! which! is! common! regarding! energy! work! within! an! organization.! The! information!gaps!are!illustrated!in!Figure!10.!!

! Figure'10:'Information'gaps'within'an'organization'regarding'energy'use.' (The'Energy'Research'Institute,'2014)' This!lack!of!information!in!different!parts!of!an!organization!can!make!it!difficult! to!manage!the!energy!efficiency!work.!When!top!and!middle!management!lack! information,!which!is!illustrated!in!the!left!pyramid!(situation!A)!in!Figure!10,!it! is! difficult! to! change! the! direction! of! an! organization.! Considering! lack! of! information!among!the!operational!staff,!they!often!have!little!knowledge!of!how! their!way!of!working!affects!an!organization’s!energy!performance.!(The!Energy! Research!Institute,!2014)!! ! Awareness!of!why!energy!is!important!and!why!a!company!prioritizes!energy!is! a!part!of!Piper’s!(1998)!planning!phase,!who!names!it!by!create!understanding.! Further,!it!is!a!shorteterm!measure!according!to!Energywise!(2011),!however!a! factor!that!needs!to!be!considered!longeterm!as!well!but!categorized!as!a!shorte term!since!it!is!important!from!the!beginning!of!improving!a!company’s!energy! performance! by! managing! energy! more! efficiently.! In! the! second! model! for! energy! management! awareness! is! not! included! but! the! authors! argue! that! awareness! in! the! organization! is! crucial! to! succeed! with! energy! management.! (Vikhorev!et!al.,!2013)!Capehart!et!al.!(2006)!argues!that!creating!awareness!is! part! of! an! energy! committee’s! responsibilities.! Representatives! on! different! levels! in! an! organization! are! needed! in! order! to! increase! the! awareness! throughout! the! whole! organization! and! make! sure! that! the! most! competent! people! have! the! authority! to! improve! a! company’s! energy! performance.! Those! representatives!are!creating!an!energy!committee.!The!committee!should!consist! of! people! with! both! technical! expertise’s! as! well! as! skills! to! steer! the! organization.! By! guiding! activities! and! communication! of! the! energy! management!program!the!committee!work!to!improve!the!energy!performance! and! assist! the! energy! manager.! The! members! of! the! committee! are! employees! working!in!different!positions!within!the!company.!(Capehart!et!al.,!2006)!

!