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ISO 50001, SEP Certification Costs $319,000 per Facility on Average

Linda Hardesty

factory Energy ManageThe Department of Energy (DOE) and the US Council for Energy-Efficient Manufacturing (CEEM) are implementing the Superior Energy Performance (SEP) Program to increase the energy efficiency of industrial facilities through the ISO 50001 energy management system standard.

The SEP program was opened to widespread participation in December 2013 and has more than 40 facilities participating in a national demonstration program. Seventeen of those facilities have already received SEP certification.

Researchers from Lawrence Berkeley National Laboratory collaborated with colleagues from Energetics and the DOE to assess the costs and benefits of industrial facilities being certified to the SEP program, and to examine the business value of SEP and ISO 50001, according to a blog posting from Berkeley Lab.

The researcher’s paper, “Assessing the Costs and Benefits of the Superior Energy Performance Program,” found that the average cost of implementing ISO 50001 and being certified to SEP came to $319,000 per facility, with fully loaded costs ranging from $207,000 to $498,000. This includes all internal staff time related to energy management, including staff already on payroll, which was the largest implementation cost. Implementation costs were relatively constant, regardless of facility size.

All of the facilities invested in outside support, to conduct training and to get the ISO 50001 and third-party certification up and running. Costs for that external technical support averaged $58,000 over a very wide range – from $26,000 to $167,000. However, the facilities reported that expert assistance was crucial, since the concepts of an integrated energy management system were new to staff, as was the software.

Facilities also reported that costs associated with external technical assistance will be greatly reduced as ISO 50001 and the SEP program is implemented in other facilities within the same parent company.

Photo: Factory via Shutterstock



2 comments on “ISO 50001, SEP Certification Costs $319,000 per Facility on Average

  1. The average payback is 1.7 years which is worth pointing out also. The costs included metering which all facilities point out would have a long term benefits with low maintenance costs.

  2. The headline and focus of this article is very misleading about the real value of the original Berkeley, Energetics and DOE research paper, “Assessing the Costs and Benefits of the Superior Energy Performance Program”.

    This excellent piece of research work very systematically works out the real costs and benefits of adopting the SEP/ISO 50001 way of working. This kind of real-world benchmarking is very difficult and is only possible through the very careful “before and after” measurements and surveys done by the research team.

    As a former academic, I consider that the work has been carried out in a very rigorous way. It is fair and balanced in the way that it adds up the real costs, including the cost of the staff already employed at the facilities. The research team should be congratulated on this landmark work.

    The biggest problem with the Energy Management Today article is that the focus is all on the downside: “the costs and effort invested”; with no reference to the benefits. By referring to the original research paper, one could also truthfully have the following titles:
    “An average SEP facility will save almost $2 million over the next 10 years”.
    “An average SEP facility will save almost $200,000/year with a once-off investment of only $100,000 in external costs.”

    However, a more balanced title is:
    “An average SEP facility will save almost $200,000/year with a 1.7 year payback on investment.”

    When a facility manager realizes that 67% of that cost is the time of people that are already employed at the facility, the ISO 50001/SEP proposition becomes very compelling. What the top-down ISO 50001/SEP approach achieves is the deployment of these staff members in the way that is most cost-effective in driving down energy costs.

    Furthermore, it has been clearly stated that these figures have been generated in the pilot program for SEP. Implementation costs will be less in future:
    • as noted in the research paper, the facilities agree that the implementation cost will reduce by 20 or 30% for their other sites;
    • software and other IT-based support will further reduce implementation costs as the ISO 50001/SEP approach becomes more mainstream

    In closing, it should be noted that all the existing facilities were already well engaged in energy management. Their average quarterly energy cost savings jumped from 3.4% to 11.3% when they moved from their previous way of working to the ISO 50001/SEP approach. This shows how the best can continue to get better!

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