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Monday, March 14, 2011

Energy—our buildings are wasting it and a lesson for knowledge managers

From a recent HBR panel meeting - talking about the need for change. What is interesting is that the lessons that they have learnt also relates to knowledge management - ie to show people the effects of the actions that they take on a monthly basis.

In a panel on energy entrepreneurship and demand management, moderated by Professor Forest Reinhardt, experts focused on two main problems: buildings in general are far too inefficient, and people in general are clueless about their individual electricity usage. The sole investor on the panel, Craig Huff (HBS MBA 1993), co-CEO and co-founder of Reservoir Capital Group, said that rather than focusing on brand-new energy sources, his firm often focuses on companies that make current energy sources more efficient.

Urban buildings consume 40 percent of the world's electricity, said Andreas Schierenbeck (HBS AMP 176, 2009), president of Siemens Industry's Building Technologies Division. Fortunately, for most of those buildings, there's the potential to cut down electricity usage by up to 75 percent via various readily available energy-saving measures, noted Philippe Delorme, EVP of strategy and innovation at Schneider Electric, which is based in France, but does a third of its business in Brazil, Russia, India, and China. Unfortunately, it's hard to persuade people to institute those energy-saving measures.

"Human beings don't like to change, and everything involving energy management does imply the need to change," Delorme said, adding that electricity demand will double in 20 years if we maintain status quo practices.
This raised an important question: "How do we connect the energy consumers with a value proposition that makes it worth their while?" asked Gregg Dixon, SVP of marketing at EnerNOC USA, which helps large organizations in the US, Canada, and the United Kingdom track their electricity use.
Dixon noted that while many consumers would jump at the chance to save 25 percent on their monthly mortgages, even if it meant paying some financing fees up front, they seem less apt to invest in energy-saving measures that will save them money in the long run, such as compact fluorescent light bulbs, air-sealing services, and tools that help customers measure energy expenditures.

Schierenbeck supposed that electricity customers might be more apt to conserve energy if their utility bills reflected exactly how they were using that energy from month to month—giving them a better idea of how and where they could save money. "Right now, people can't tell you where they're expending energy but they can tell you what their monthly bill is," he said

Delorme agreed. "We don't know how much we spend because it's not visible enough," he said.

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