Effective Energy Management for Businesses

energy-management-middle-east-businessesMiddle East has been witnessing a rapid increase in energy consumption due to high degree of industrialization, high standards of living and exponential increase in population. Infact, the level of primary energy consumption in the Middle East is among the highest worldwide.  These factors have made businesses in Middle East to realize that effective energy management is not only good for the businesses but also an essential requirement.

In recent years, many businesses in the Middle East have come up with dynamic strategies to achieve immediate reduction in energy consumption. This trend towards effective energy management is expected to continue to grow in the region in the coming years on account on changing regulations and growing awareness on energy conservation.

Ingredients of Effective Energy Management Plan

For an energy management plan to succeed, the entire organization including its employees and management team, should be committed to the implementation of energy management strategy whose main elements are:

  • Goal-setting: how much energy reduction do you want to achieve?
  • Number-crunching: how much energy do you consume?
  • Identifying energy-guzzlers: What are major consumption units and what measures can be taken to reduce consumption
  • Technology and automation: Smart metering, schedule-based lighting, occupancy sensors, HVAC control and latest technological innovation provides an active approach to energy management
  • Continuous review and management: Regular performance monitoring is essential to check the progress towards your energy-saving goals. 

Hurdles to Overcome

​Lack of incentives to reduce energy consumption is a major hurdle faced by businesses in the Middle East. In the GCC region, electricity is usually provided at heavily subsidized rates which fail to provide the motivation to the consumer to reduce energy consumption. Most of the commercial buildings in the Middle East consume huge amount of energy in the form of HVAC, lighting, ventilation etc., and there is a real need to make such buildings ‘ energy smart’ in the real sense of the word.

An energy smart building - Siemens headquarters at Masdar

An energy smart building – Siemens headquarters at Masdar

Role of Technology

Technology plays a vital role in reducing energy consumption as energy-savings are not limited to power consumption by HVAC, lighting or ventilations, but also encompass optimization of energy use, building infrastructure, supply chain networks, product design, transportation networks etc. Businesses in the Middle East may strive for energy-smart buildings, smart grid systems and renewable energy sources (like rooptop solar and biogas systems) to improve their long-term sustainability and more effective cost-management.

Energy Management in the Middle East

Managing and reducing energy consumption not only saves money but also helps in mitigating climate change and enhancing corporate reputation. The primary objective of energy management is to achieve and maintain optimum energy procurement and utilisation, throughout the organisation which may help in minimizing energy costs and mitigating environmental effects. Infact, energy management is widely acknowledged as the best solution for direct and immediate reduction of energy consumption.

Importance of Energy Management

Energy should be regarded as a business cost, like raw material or labour. Companies can achieve substantial reduction in energy bills by implementing simple housekeeping measures. Reduction and control of energy usage is vital for an organization as it:

  • Reduces costs: Reducing cost is the most compelling reason for saving energy. Most organisations can save up to 20% on their fuel cost by managing their energy use;
  • Reduces carbon emissions: Reducing energy consumption also reduces carbon emissions and adverse environmental effects. Reducing your organisation’s carbon footprint helps build a ‘green’ image thereby generating good business opportunities; and
  • Reduce risk: Reducing energy use helps reduce risk of energy price fluctuations and supply shortages.

Regulatory requirements aiming to reduce carbon emissions and energy use require accurate energy data collection and effective management systems. Good energy management practices are compliant with these requirements and help fulfil regulatory obligations. Businesses worldwide are showing interest in appointment of a formal/informal energy manager to coordinate energy management activities. The main task of an energy manager is to set up a system to collect, analyse and report on energy consumption and costs which may involve reading electricity meters regularly and analysis of utility bills.

Carbon emissions from energy use dominate the total greenhouse gas emissions of most organisations. Sound energy management is rapidly emerging as an integral part of carbon management which in turn helps organisations in effective overall environmental management. In addition to financial benefits, energy management has other significant advantages for an organisation such as:

  • Organisations achieve stronger market position by demonstrating ‘green’ credentials. Energy management improves competitive advantage as most consumers prefer to source from socially responsible businesses;
  • Organisations adopting energy management systems can influence supply chains by preferring suppliers who adopt environment management practices; and
  • Energy management creates a better workplace environment for employees by improving working conditions.

Energy Management in the Middle East

In recent years, energy consumption in the Middle East is rising exponentially due to rapid industrialization and high population growth rate. Infact, the level of primary energy consumption in MENA region is one of the highest worldwide.  However, the efficiency of energy production and consumption patterns in the region requires improvement. Though the per capita energy consumption in the GCC sub-region are among the world’s top list, more than 40 percent of the Arab population in rural and urban poor areas do not have adequate access to energy services.

The Middle East is making a steady change towards energy efficiency and alternative sources of energy. Several declarations have been issued in recent years emphasizing concerns and commitment of regional powers to achieve sustainable development. Energy Strategy 2030 introduced by Dubai aims to reduce energy demand and carbon dioxide emissions by 30% by the year 2030 through secure energy supply and efficient energy use while meeting environmental and sustainability objectives. Simalarly Saudi Arabia and Qatar are seriously pursuing the use of alternative energy in power generation. This is an attractive driver for businesses to adopt solutions that reduce overall energy consumption. 

Considering the rapid rise in power demand in the region, governments are now looking to diversify their energy mix from their primary energy source to a greater reliance on renewable energy. Middle East energy efficiency ranking is expected to get a major boost due to the development of large renewable energy projects in UAE, Saudi Arabia, Jordan etc. Balanced approaches are being employed to drive feasible clean energy projects while developing the regulatory framework and adaptation of energy efficient technologies.

Many businesses in the Middle East have set dynamic strategic direction to achieve immediate reduction in energy consumption. The trend towards energy efficiency will only continue to grow to sustain this demand. With increasing environmental awareness, there is significant room for growth and leadership within the Middle East for the adoption of energy optimisation, introduction of specialised energy-saving systems and implementation of sustainable energy technologies.

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Concept of Energy Management

Energy management is the best solution for direct and immediate reduction of energy consumption. For the last few decades we have been exploring various alternatives to conventional sources of energy like solar, wind and biomass energy. However, due attention must also be given to best utilization of energy, improvement in energy efficiencies and optimum management of energy resources. Infact, energy management deals with already existing sources and actual consumption. It includes planning and operation of energy-related production and consumption units.

The main objectives of energy management are resource conservation, climate protection and cost savings. The central task of energy management is to reduce costs for the provision of energy in buildings and facilities without compromising work processes. The simplest way to introduce energy management is the effective use of energy to maximize profit by minimizing costs. Energy management could save up to 70% of the energy consumption in a typical building or plant.

The typical energy saving for any plant or building, using basic energy management principles, could be 10-15% of the total consumption. This percentage may rose to 25-35% by a medium scale energy management program (1 – 3 year). For achieving higher degree of savings, a long-term energy management program, spread over a period of three years or more, is required which will involve a certain capital investment. The major elements of an energy management program are:

  • Set your goal: how much energy reduction do you want to achieve
  • Know your numbers: how much do you consume
  • Define major consumption units and try to reduce consumption
  • Continuous review and management

Basic Energy Savings Tips for Industries

  • Avoid extra-load in peak time. It is way more costly.
  • Turn off machines during shut downs, inspections, maintenance and when not in use.
  • Regular and efficient maintenance of machines and motors prevents extra loads and saves 15 % of extra consumption and prevents break downs as well.
  • Attend air and steam leakages. These leakages are extra load on boilers, compressors etc.
  • Replacement of incandescent lamps with compact fluorescent lights (CFLs) or LEDs can save significant amount of energy.

Our case study for energy management program was developed and implemented in textile industry which is second highest industrial energy consumer in Egypt. The program, involving minimum investment, was implemented over a period of one year and proved to be a major success. Direct energy savings were approximately one-fourth of the total consumption. More than one million Egyptian pounds were saved from direct costs, in addition to considerable indirect savings.


Energy management is the process of monitoring, controlling, and conserving energy in a building or an industry. Energy management is the key to saving energy in your organization. Energy management is an important energy resource that can help meet future energy needs while the nation concurrently develops new and low-carbon energy sources

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Greening Your Business

With growing awareness among consumers for eco-friendly products, it is becoming highly important for businesses in the Middle East to adopt and implement green strategies. It is not only the requirement of customers but also compliance to regulations and reduction in operating costs that drive the implementation of environment-friendly methods in business. Corporate social responsibility (or CSR) is now driven by pollution prevention, energy efficiency, eco-friendly design, and industrial ecology across all industrial sectors. 

Components of a Green Business

A green business appears to be an expensive and cumbersome process. On the contrary it is quite easy to have a green business. The first and easiest step towards going green is the reduction in carbon footprint of your organization. Carbon footprint should be calculated and then reduced by taking some simple measures like:

  • Focusing on direct as well as indirect emissions;
  • Implementing cost-effective and energy efficient technologies; and
  • Developing low carbon energy sources.

Energy management is another vital ingredient of a green business. This includes assessing, controlling and saving energy. Energy management involves getting a detailed data of the energy consumption patterns and keeping a check on the conservation progress. In simple terms, energy management means reducing waste and promoting recycling.

If we take look around, nature has provided us with an endless supply of alternative energy in the form of solar, wind, hydro energy and so on. Alternative energy is not only environment-friendly but also economical. For instance, if you switch to green power, there will be a considerable reduction in carbon emission as well as the electricity bill. A solar panel on the roof of your building can take care of most of your basic energy needs. Alternative energy facilities require less maintenance and produce little or no waste products. And most importantly it is sustainable and will never run out.

Changing Landscape in the Middle East

Many of the world’s biggest companies now realise the importance of eco-friendly brand image. There are a host of simple environment saving solutions that are not only good for the business but also make a company greener, thus serving as an attractive PR and marketing tool. Seeing companies in Europe and US take a green lead, many businesses in the Middle East are now trying to catch up. New commercial thinking in the development of better ways to make things is being driven by the green agenda of sustainability and environment.

For most companies it means assessing manufacturing and distribution processes, quantifying carbon footprints and finding ways to minimize their impacts on the environment. Of importance is reducing waste, recycling, changing to renewable sources of energy, and setting targets to improve performance throughout the manufacturing and distribution chains.

The specter of oil depletion is also creating more concern in the Middle East. More and more, the part of the world that’s produced so much of the oil we all rely on appears to be coming to the realization that business as usual isn’t sustainable. All of these factors are pushing the Middle East towards more sustainability and Middle Eastern companies towards green business.

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Energy Efficiency in Saudi Cement Industry

Saudi Arabia is the largest construction market in the Middle East, with large development projects under way and many more in the planning stage. The cement industry in the country is evolving rapidly and is expected to reach annual clinker production of 70 million tonnes in 2013 from current figure of 60 million tonnes per year. The cement industry is one of the highest energy-intensive industries in the world, with fuel and energy costs typically representing 30-40% of total production costs. On an average, the specific electrical energy consumption typically ranges between 90 and 130 kWh per tonne of cement. Keeping in view the huge energy demand of the cement industry, the Saudi Arabian government has been making efforts to reduce the energy consumption in the country towards a more sustainable.

Energy Demand in Cement Production

The theoretical fuel energy demand for cement clinker production is determined by the energy required for the chemical/mineralogical reactions (1,700 to 1,800 MJ/tonne clinker) and the thermal energy needed for raw material drying and pre-heating. Modern cement plants which were built within the last decade have low energy consumption compared to older plants.  The actual fuel energy use for different kiln systems is in the following ranges (MJ/tonne clinker):

  • 3,000 – 3,800 for dry process, multi-stage (3 – 6 stages) cyclone preheater and precalcining kilns,
  • 3,100 – 4,200 for dry process rotary kilns equipped with cyclone preheaters,
  • 3,300 – 4,500 for semi-dry/semi-wet processes (e.g. Lepol-kilns),
  • Up to 5,000 for dry process long kilns,
  • 5,000 – 6,000 for wet process long kilns and
  • 3,100–6,500 for shaft kilns.

Energy Efficiency in Cement Industry

With new built, state-of-the-art cement plants, usually all technical measures seem to be implemented towards low energy consumption. So, how to reduce it further?

Energy efficiency is based on the following three pillars

  • Technical optimization
  • Alternative raw materials for cement and clinker production
  • Alternative fuels

In Europe, the new energy efficiency directive from 2011 intends to reduce the energy consumption of the overall industry by 20%, achieving savings of 200billion Euros at the energy bill and with the goal to create 2 million new jobs within Europe. This approach will have a significant influence also on the cement industry. Saving 20% of the energy consumption is a challenging goal, especially for plants with state-of-the-art technology.

In older plants modernizations in the fields of grinding, process control and process prediction can, if properly planned and installed, reduce the electricity consumption – sometimes in a two digit number.

Alternative Fuels

Alternative fuels, such as waste-derived fuels or RDF, bear further energy saving potential. The substitution of fossil fuel by alternative sources of energy is common practice in the European cement industry.The German cement industry, for example, substitutes approximately 61% of their fossil fuel demand. The European cement industry reaches an overall substitution rate of at least ca. 20%.

Typical “alternative fuels” available in Saudi Arabia are municipal solid wastes, agro-industrial wastes, industrial wastes and some amount of crop residues. To use alternative or waste-derived fuels, such as municipal solid wastes, dried sewage sludges, drilling wastes etc., a regulatory base has to be developed which sets

  • Types of wastes/alternative fuels,
  • Standards for the production of waste-derived fuels,
  • Emission standards and control mechanism while using alternative fuels and
  • Standards for permitting procedures.

Alternative Raw Materials

The reduction of clinker portion in cement affords another route to reduce energy consumption. In particular, granulated blast furnace slags or even limestone have proven themselves as substitutes in cement production, thus reducing the overall energy consumption.

To force the use of alternative raw materials within the cement industry, also – and again –standards have to be set, where

  • Types of wastes, by-products and other secondary raw materials are defined,
  • Standards for the substitution are set,
  • Guidelines for processing are developed,
  • Control mechanisms are defined.


To reduce the energy consumption, an energy efficiency program, focusing on “production-related energy efficiency” has to be developed. Substantial potential for energy efficiency improvement exists in the cement industry and in individual plants. A portion of this potential will be achieved as part of (natural) modernization and expansion of existing facilities, as well as construction of new plants in particular regions. Still, a relatively large potential for improved energy management practices exists and can be exhausted by determined approaches.

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An Introduction to Smart Grid

A smart grid is an electrical grid that uses information and communications technology to gather and act on information, such as information about the behaviors of suppliers and consumers, in an automated fashion to improve the efficiency, reliability, economics, and sustainability of the production and distribution of electricity.

Smart grids are now being used in electricity networks, from the power plants all the way to the consumers of electricity in homes and businesses. The “grid” amounts to the networks that carry electricity from the plants where it is generated to consumers. The grid includes wires, substations, transformers, switches etc. The major benefits are significant improvement in energy efficiency on the electricity grid as well as in the energy users’ homes and offices.

What is Smart Grid

In a typical smart grid, central management center controls all the units connected to it making sure to operate them at the highest efficiencies. The central management center does not only assist in better energy management inside the facility but also it helps in reducing the electrical consumption during peak times. This reduction is reflected as huge energy savings.

A smart grid also facilitates switch from conventional energy to renewable energy. In case of having a source of renewable energy in the facility, the grid allows an easy access to integrate it into the grid. Smart grid permits greater penetration of highly variable renewable sources of energy, such as wind power and solar energy.

Smart grid is a new gateway to a green future. It not only provides better energy benefits but also opens up new avenues of employment for youngsters. For example, conversion of normal operating units into smart ones capable of connecting to the smart grid is full of new and exciting opportunities. The global market for smart instruments is trending up with out-of-the-box ideas and innovations from young energetic minds.  

Smart Grid Prospects in the Middle East

The Middle East electricity market is growing at an accelerating rate due to higher consumption rates in the private, commercial and industrial sectors. This results in the need for a successful implementation strategy that can bridge the gap between the current supply and increasing demand. A smart grid network makes for the ideal bridge where the goals of modernization can meet those of a reliable public infrastructure.

Regional countries such as UAE, Saudi Arabia and Jordan are moving ahead smart meter rollouts. The high incomes in those countries, high electricity consumption, and small populations will drive smart meter deployments in the medium-term. The technologies used and lessons learned in these deployments will then be diffused throughout the region.

Smart grid offers an excellent opportunity to modernize Middle East power infrastructure, lay the foundation for energy management, provide new employment opportunities and ultimately reduce region’s dependence on fossil fuels. The Middle East region has the highest per capita carbon footprint in the world which can be offset by deployment of smart energy systems.

In the last few years, the number of events, conferences and meetings focused on smart grid and smart energy has sky-rocketed in the Middle East. The growing amount of attention being paid to this area reflects an increased sense of urgency to meet the energy requirements of fast-growing population and sustain the rapid industrial growth across the region.

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Energy Efficiency Perspectives for UAE

With Abu Dhabi alone on track to generate more than 10,000 megawatts of electricity for the first time, discussion about improving energy efficiency in the United Arab Emirates is taking on a more critical tone. Daytime energy use in the hot summer months is still experiencing rampant year-on-year growth, with peak demand this year growing by 12 per cent. Lying at the heart of these consumption levels is the need for air conditioning, which accounts for about half of total electricity demand.

Business and Government Action

At the commercial level, considerable steps are being taken to reduce the Emirate’s carbon footprint. A building insulation program in Dubai has resulted in claims that all buildings there have become twice as energy efficient since completion of the program. Further steps are also underway in other ecological areas such as water efficiency and waste management with the intention of ensuring the green credentials of every building meet international environmental standards and expectations.

At the official level the Emirates’ Authority for Standardization and Metrology continues to implement its Energy Efficiency Standardization and Labelling (EESL) program. This introduced specific efficiency and labelling requirements for non-ducted room air-conditioners in 2011.

These measures were joined this year by requirements under the same program for many other household electrical goods including lamps, washing machines and refrigerating appliances. The labelling requirements under this program will become mandatory by 2013 enabling consumers to see which machines are the most efficient and make sound environmental choices that will also save them money on running costs. The EESL programme will be further extended in 2013 to include ducted air-conditioners and chillers.

The UAE’s oil and gas sector also is recognising the importance of the energy efficiency agenda. It might seem counterintuitive that a sector with oil reserves of about 97 billion barrels and natural gas reserves of six trillion cubic meters should be thinking about how to save energy. The issue is that these reserves, despite their size, are not finite and that oil for export produces greater revenue generation than oil for the domestic market. It is, therefore, in the oil and gas sector’s interest to work with those trying to drive down domestic consumption, as it will maximise the sector’s longer term sustainability.  

The Emirates Energy Award was launched in 2007 to recognize the best implemented practices in energy conservation and management that showcase innovative, cost effective and replicable energy efficiency measures. Such acknowledged practices should manifest a sound impact on the Gulf region to stir energy awareness on a broad level and across the different facets of society.

Significance of Behavioural Change

As much as formal initiatives and programmes have their place in the battle for a more energy efficient UAE, there also needs to be a general shift in culture by the public. Improving public perception of green issues and encouraging behaviours that support energy efficiency can contribute significantly towards the overall goal. As fuel prices increase in the domestic market, the UAE’s citizens are already adding more weight to fuel efficiency when considering what cars they will buy.

SUVs and 4x4s might still be the biggest sellers but household budgets are becoming increasingly stretched and many ordinary citizens are looking for smaller more efficient cars. Perhaps for the first time, the entire running costs of cars are being considered and the UAE’s car dealers and their suppliers are looking to accommodate this change in their customers’ attitudes. This trend is so significant that some car dealerships are seeing large year-on-year increases in sales of their smaller, more efficient models.

Car rental companies are seeing this trend also and in Dubai, at least one is making hiring a car with green credentials more appealing to a wider cross-section of the public – offering everything from the more familiar Chevrolet Volts and Nissan Leafs to the most exotic hybrid and fully electric cars available to hire or lease.

Capitalising on these trends makes both environmental and business sense but economic drivers cannot alone be left to change public behaviour. There are really simple measures that government and business should be encouraging people to take. Some may argue that switching-off computers, lights and air-conditioning at the end of the working day may save energy but is not sufficiently worthwhile promoting – voluntary measures of this sort will not impact on overall energy trends.

There is evidence however that if these behaviours are added to measures like installing energy efficient lighting, lowering thermostats and optimising EESL five-star rated air-conditioners, the energy savings really do become significant – potentially halving a building’s energy consumption.

Conserving energy may not yet be a way of life in the UAE but the rapid changes being seen there are an indicator of what is to come. Formal energy efficiency programs and voluntary measures combined will help the UAE maintain its economic strength in the region and because of this it is one agenda that will not be going away.