Energy efficiency: immediate impact, lasting benefits

Soaring energy costs and volatile prices have impacted us all in one way or another. The response from governments has been wide reaching. Subsidized energy bills have provided immediate relief to hard-pressed citizens and businesses. And at COP27, the EU Energy Commissioner outlined how this unprecedented challenge has led to a renewed focus on their three pillars of diversifying supplies, ramping up renewables and saving energy.

It’s this last pillar that I want to focus on here. Energy efficiency could have a major immediate impact for organizations of all kinds, and it could be the first step in a longer systemic energy transition. For many, it’s not a new concept. You might think of LED lightbulbs and smart meters. But innovative tools and technologies and better use of data and analytics are creating exciting new possibilities to make energy efficiency easier, cheaper and faster.

As well as driving policy that encourages greater energy efficiency, individual government departments and public service agencies could also be major beneficiaries. Take a regional healthcare trust for example; they operate a large vehicle fleet and run an estate that can include hospitals, primary care facilities and research centers. And this scope is replicated across other public service organizations like public infrastructure, defence agencies, postal services, police forces and educational institutions in particular. With this large footprint, they have a major role to play in tackling the challenge directly.

Making energy usage across government and public service agencies more efficient could be their most significant opportunity to make immediate progress toward sustainability goals. It could also deliver savings at a time of constrained budgets. However, the most significant impact might be the capability and infrastructure it helps establish, which could be the foundation for a more sustainable, affordable, reliable and secure energy future for all.

Regional and national action

Action is already being taken both nationally and regionally. The European Commission’s REPowerEU plan increases the binding EU energy efficiency target from 9% to 13% and includes requirements for the public sector to reduce its energy consumption. In the United States, the Inflation Reduction Act of 2022 includes specific incentives for energy efficiency in the federal administration. And Spain is setting ambitious plans for the national public administration to renovate 140,000 m² of building space to achieve 30% energy savings by 2024, then 1,000,000 m² by 2026.

For initiatives like these, technologies including sensors, the internet of things (IoT), advanced analytics, digital twins and artificial intelligence (AI) all have a part to play. Together, they can create the insights and automated responses to run, design, build and operate buildings and infrastructure far more efficiently.

Accenture worked with Metro de Madrid to put AI to use in developing a new, more energy efficient ventilation system in their underground transport system by taking advantage of the vast amount of data available to optimize energy use. Ultimately, Metro de Madrid reduced energy consumption by 25%, cut annual energy costs by €1 million and lowered CO₂ emissions by 1,800 metric tons annually.

And elsewhere, we are seeing the rise of the 15-minute city concept, which aims to enable residents to meet their needs locally without having to get in a car. In her re-election campaign, Paris’ Mayor unveiled a plan to commit €350 million toward pedestrianization and turn 60,000 parking spaces into community gardens, public housing and commercial space. By implementing this more energy efficient urban planning, Paris and other cities would not just be taking cars off the road, they could cut the amount of energy that is used for transportation in general and improve resident well-being at the same time.

The intelligent path forward

So where should public service leaders begin on their own efforts to achieve greater energy efficiency? The adage ‘you can’t manage what you can’t measure’ very much applies here. Recent Accenture research suggests that science-based, measurable net-zero targets are an essential tool for organizations of all kinds. It found that those that had set full net-zero targets had cut operational emissions by an average of 18% between 2011 and 2020, compared to an increase of 13% for those that had not.

As the examples highlighted earlier show, insights and intelligence are the critical capabilities required to move forward with major step changes in energy efficiency. For public service agencies, this is crucial. It can help them achieve the cost savings they need, while at the same time powering the longer-term transformation they must undergo.

A four-step process, that embeds intelligence at every stage, could help agencies move forward:

1. Strategize: understand the energy use of employees and service users, identify the biggest opportunities and create the roadmap for action. What do you already know about your agency’s energy usage now, and what are your ambitions for the future?
2. Digitize: deploy sensors to gather more data and use it to create digital twins and analytical models to predict and plan for changes in energy use. Where are the gaps in being able to measure your energy usage effectively?
3. Optimize: apply the intelligence to prioritize and develop specific interventions to reduce energy use and improve overall efficiency. Now you know how you’re using energy, what are the easy wins you can achieve to improve efficiency?
4. Incentivize: use AI models to identify and institute behavior change initiatives that will encourage employees, suppliers and citizens to use energy more efficiently. Once you’ve got all the facts, tested it out and have set out a longer-term strategy, how can you influence others to follow?

This influence could extend far beyond the people – staff and citizens – that a particular agency works with. The same Accenture research found that, on current trends, only 7% of companies around the world are on track to meet their net-zero goals. Leadership and action by governments and public service agencies could be crucial to encourage others to step up.

I would be very interested to hear your views on the roles that government can play to address climate change challenges. Please get in touch.