How to improve operational efficiency and reduce capital expenditure

Energy efficiency should be at the heart of any organisations business management strategy.  It is after all a resource and overhead that if reduced, enhances the profitability of the organisation and makes them more competitive in the market place.  The offshoots from this is increased carbon credentials, which carries with it, not only the moral consideration and contribution to reducing the impact of climate change, but also entices potential custom.  The key to any effective energy management strategy is how to operate, maintain and improve energy efficiency in the work place (operational efficiencies).

What is the problem?

Most organisations focus on their core services, quite rightly, it’s what they sell and forms the basis of their revenue streams.  However, that revenue could be further enhanced through careful management of its assets and utilities (buildings, plant and equipment).  For an owner / occupier, this can be critical not only to optimise building, plant and environmental performance, but to manage cashflow in the case of plant failure and dilapidation which can often carry some significant cost burden.  The same applies to a tenant within a building, only that the payment mechanism is via the service charge.

Some of the key factors that affect operational efficiency are:

  1. Plant life and degradation
  2. Maintainability
  3. Controls and automation
  4. Change and use of a building, which is in contrary to original design intent
  5. Knowing how much it costs to run and operate

How can the problem be resolved?

Plant life and degradation

It is important to consider plant life expectancy and degradation.  As plant and equipment nears the end of its useful life expectancy, advanced wear and tear will ensue, higher levels of energy will be used, increased breakdowns and faults will occur and ultimately, if not addressed, a total loss of service will result.  As a matter of good practice, you should build a budget forecast for at least 5, 10 and even 20 years; this ensures accruals are made for replacement.  Unfortunately, nothing runs for ever, no matter how well it is maintained; consider having your own car and how much it costs to run and as it ages, fuel economy decreases, additional repairs and expenditure is required to keep it on the road; the same applies to plant equipment.

Opportunities exist to factor latest developments in technology and automation during replacement to ensure the most economic replacement.  Full life-cycle analysis should be undertaken to ensure all aspects are considered – fuel / energy costs (taxes and energy costs), maintenance and consumables.  Choosing the cheapest option without considering full life-cycle costing can often be a false economy.


It is necessary to engage the services of a contractor who is responsible for the Mechanical & Electrical (M&E) maintenance.  Careful selection through a tendering process is standard, although one should not merely select the cheapest option as again, this can be a false economy as there can be a tendency for the contractor to capitalise on breakdowns or faults which often lead to unbudgeted and substantial costs.  Selection should be made on capability, quality, understanding of the site and organisation, pedigree, references and testimonials.

The industry is tending to move away from standard maintenance frequencies, which often led to ‘maintenance for maintenance sake’.  Risk and reliability or performance based maintenance is becoming increasingly more attractive.  The concept is to drive maintenance focus through analysis of fault history and breakdown, energy use, age, wear and tear and operating duty.  If these are factored, algorithms can be developed to focus maintenance where it is necessary; this results in maintained efficiencies, reliability and fewer breakdowns.  The downside is that maintenance budgets will fluctuate from year to year because not all plant and equipment has the same life expectancy, and those older items will require enhanced maintenance.  However, over the life-cycle of the building and its plant, greater cost savings can theoretically be achieved providing that expertise has been applied in building the performance maintenance structure.

Controls and automation

One of the significant challenges in operational performance is associated with controls and automation. See more details here.

Often, the scope and coverage of Building Management System control philosophies, strategies and network has been limited during installation due to cost.  Another false economy is to select the cheapest and most limited coverage.  Over the life-cycle of the property, this leads to higher energy use and operating costs.  Again, life-cycle costs as a ‘composite bundle’ integrated with the plant and systems it controls should always be considered to calculate the scope, extent and benefit of one controls system and coverage over the next.  Of course, sometimes the most complex systems or strategies are not always the best and really depend on the application and building use to determine what is most appropriate or economical.

Typically, when a new building is constructed, the original design intent often does not match that of current needs of the building and occupants as the age of the building extends, occupancy and use changes.  It is important that adjustment and alterations are made to support new layouts and changes.  Unless monitored and instructed, control maintainers will check sensors and calibration but often do not challenge control philosophies.  Whilst devices operate and record correctly, they may not necessarily be controlling the plant and equipment correctly.  Even the most basic concepts such as plant and occupancy timings can be incorrect and unchecked.  Any controls maintenance strategy should allow for periodic review and improvements to ensure efficiencies are maintained, which will enhance operational efficiencies.

‘Open protocol’ systems that combine and interface with different platforms are preferred that are supported by numerous control companies.  This provides flexibility, resilience and avoids monopolisation of the system by a single provider.  Bespoke stand-alone or unnecessarily complex systems often lead to issues in servicing / maintenance and inefficiencies and can often become obsolete before they have even reached their maturity.  The ‘open protocol’ approach allows development, inclusion and further intelligent integration with other control systems leading to infinite options and adaption.  Selecting a system supported by only one company (ordinarily the manufacturer) results in a client being ‘tied’ to one supplier throughout the life-cycle of the system.  Often higher costs are incurred for firmware upgrades, modifications and licenses and less so for a more ‘open’ system.

Change and use of a building

This is a common and widespread issue in commercial office buildings.  Plant, equipment and controls are often not adapted to meet the current needs of the building as it progresses throughout its life.  Refurbishment and alteration of internal floor space from open plan to cellular offices in example often negate to consider the layout of services such as fan coil units (FCU’s), location of thermostats and supplier air grills on ventilation, and air conditioning systems.  This leads to occupational discomfort, dissatisfaction, loss of productivity and importantly, high energy use.  It is imperative whenever considering internal layout and refurbishment projects that budgets are assigned, building services engineers and controls specialists are consulted and not just fabric specialists, as is often the case.  A strict change control process should be implemented to ensure that all stakeholders are involved; this is particularly prevalent where the building is occupied under multi-tenancy.  Another aspect to consider is the office occupancy density, such as call-centres.  The density of occupation and internal heat gains will in no doubt have compromised the original design intent and strategy and if the area’s controls, plant and equipment have not been altered or enhanced, poor efficiencies and dissatisfaction in environmental comfort will in no doubt ensue.

Knowing how much it costs to run and operate

A basic concept of energy management practice is the ‘what’, ‘where’ and ‘when’ philosophy.  If you know what energy you are using, when you are using it and where it is being used (i.e. the significant energy intensive processes or areas), this can be monitored and targeted for reduction; knowledge and data is key.  Of significant importance to this concept is an effective main and sub-metering strategy.  Sub-metering provides a wealth of data and trending information that can assist in the identification of inefficiencies.  Be mindful that too much data and metering can also provide a data intensity and labour time that does not outweigh the benefit it brings; the metering strategy must be right for the application.

How ETS has solved this problem for other clients?

Plant life and degradation

ETS have undertaken numerous plant condition audits, produced five-year plant replacement programmes and capital expenditure forecasts for all our FM & Property and retail clients.


One of our pillars of service offering is technical support.  We have undertaken asset and condition surveys, produced maintenance specifications, administered a tender process, undertaken analysis and recommended appointments.  Thereafter, upon engagement, we have undertaken maintenance audits and reviews of the contractors to ensure plant and equipment is being maintained from a compliance perspective, maintenance is being delivered to an acceptable standard and control philosophies are being maintained.

Controls and automation

With our in-house control specialists, we have undertaken countless controls reviews, delivered upgrade and alteration projects.  Our team monitors and reviews, remotely monitoring plant controls and performance through various controlling platforms.

Change and use of a building

We work on behalf of a number of blue-chip clients acting as their expert consulting engineers.  We review building alterations and modifications to ensure control strategies, service layout and plant operation have not been compromised or hindered.  We are often asked to provide a license for modifications / alterations on our client’s behalf.

Knowing how much it costs to run and operate

We have project managed and delivered sub-metering strategies throughout the UK and Ireland on extensive portfolios of 600+ properties.  Furthermore, we can undertake bill validation and recharge on behalf of managing agents for multi-tenancy buildings using bespoke energy monitoring and analytical software.  Our team monitor and provide analysis on half hourly data for over 1000 properties.  We have a team of experts, Chartered Energy Managers, Chartered Energy Engineers and Chartered Engineers that are energy management practitioners and understand all aspects of building operations and efficiencies.

If you would like advice about improving operational efficiency and reducing your capital expenditure, contact us on 0117 379 0850 and speak to one of our Senior Consultants.

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