Energy savings alone can represent a lot of money and might be a strong incentive for energy efficiency activities and priority. But, that may not be enough for some corporate managers. The chief executive and director's board are held accountable to the owners and shareholders. Their responsibility is to create and grow the company capital value. In the refining business this is accomplished by obtaining revenue from products that exceeds the investment and operational cost of owning and operating it. Any set of equipment or system is an asset that must generate economic return. Earnings gained from the sale of products generated by these assets, the refinery itself, divided by the value of the refinery, gives the rate of return on assets, a key measure by which corporation officers are evaluated. And whatever decision these officers take, they seek investments that lead to the highest achievable return on capital employed allied with fastest possible payback.
Those responsible for the energy efficiency program need to understand how their work supports and is supported by overall corporate goals. The proposed activities to run energy efficiency provide better control over refinery assets that reduces losses and energy consumed per unit of production. This can provide reliability and this can also mean less down-time, which derives more production. So, energy efficiency is not just about reducing costs, it is also achieving greater productivity and revenue.
One approach to insert energy efficiency on the corporation priorities is to relate it to the rate of return on assets. Energy savings contribute in this index either in cost reduction as in revenue rise. This is a simple and rather coherent view and although it fits well with the company's agenda it has the inconvenience of placing energy efficiency at the same level of interest as many other better management efforts. But energy efficiency has always had an extra flavor, surpassing only economics. Relating its benefits to more corporate needs is a good option for differentiating it from others and raises its priority.
The direct benefit of efficiency is reduced energy expenditure. It can be seen as a new capital source for the corporation. These savings can also be enrolled among added shareholder value attributable to the energy efficiency program. Energy savings can simultaneously reduce emissions and water consumption and potentially contribute to reduce environmental compliance costs and mitigate exposure of the refinery to penalties. The routines involved in monitoring can help identify operational abnormalities and contain dangers and threats to life, health and property. It is also important to detach energy efficiency program contribution to health, safety and environmental corporate results.
Connecting energy efficiency results to corporate goals brings many palpable benefits to the program. It places energy culture at the same level of other usual priorities for the refinery manager and all staff. It expresses the commitment of the company to energy efficiency and spreads this statement to all company officers, even those not directly attached to the subject. This eases the work of obtaining all necessary support from corporate level to guarantee program continuity, like financial resources, education and training opportunities, compensation and motivation systems for engaged personnel etc. Incorporating this into a corporate energy policy can be a formal and worthwhile step and, as previously mentioned, may really found the business basis for the program.
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