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ENERGETSKI MANAGEMENT KOT SREDSTVO ZA DOSEGANJE ENERGETSKE UČINKOVITOSTI V PODJETJU KOPUN SIMTO d.o.o.

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(1)REPUBLIC OF SLOVENIA UNIVERSITY OF MARIBOR FACULTY OF ECONOMICS AND BUSINESS. THE MASTER`S THESIS. ENERGY MANAGEMENT AS A TOOL FOR ENERGY EFFICIENCY IN THE COMPANY KOPUN SIMTO (d.o.o.) Ltd. ENERGETSKI MANAGEMENT KOT SREDSTVO ZA DOSEGANJE ENERGETSKE UČINKOVITOSTI V PODJETJU KOPUN SIMTO d.o.o.. Candidate: Kaja Černjavič, univ. dipl. ekon. Student of Bolonian Masters Programme: Economics and Business Sciences Field of Study: Management, Organisation and Human Resources Mentor: Prof. Dr. Duško Uršič Co-mentor: Prof. Dr. Matjaž Denac Disposition proof reader: Sinja Leskovec, prof. ang. Master`sThesis proof reader: Aleš Černjavič, univ. dipl. ekon.. Maribor, May, 2013.

(2) PREFACE Organizations and countries around the world face tremendous economic and environmental pressures as being effective and competitive in the global marketplace means also being environmentally friendly and meeting all the required standards given by the governments. Reducing air and water pollution have to become one of the leading goals of every organization, private or public owned. A step towards environment conservation and reduction of energy is energy management; raising awareness about energy use among people and the use of energy in organizations. Nowadays more and more organizations will get the certification ISO 50001 or EN 16001, a standard which will help organizations establish systems and processes necessary to improve energy efficiency, which should lead to reductions in cost and greenhouse gas emissions through systematic management of energy. In the thesis we talk about managing energy in public and private owned organizations. From the Slovenian Statistical Database it is evident that there were 169.360 registered organizations in Slovenia in the year 2011; 46,94-percent of them were listed as legal entities. 94,88-percent of all organizations have micro structure, and fulfil at least two out of three main requirements, number of people employed below 10, generated revenues not exceeding 2,0 million euro and value of their assets below 2,0 million euro. A considerable amount of companies have the structure of a micro company. We decided to make a case study on an actual micro company showing the contribution to environmental and energy savings it can make by implementing and following the guidelines of an energy management system (EnMS).. 2.

(3) TABLE OF CONTENTS 1. INTRODUCTION. 7. 1.1. Defining the Scope and Description of the Research Problem. 7. 1.2. Purpose and Master`s Thesis Objectives. 8. 1.3. Master`s Thesis Research Scheme 1.3.1. Master`s Thesis Hypotheses 1.3.2. Research Realisation Steps 1.3.3. Anticipated Methods 1.3.4. Presumptions and Research Limitations. 9 9 9 9 10. 2. ENERGY PRODUCTION AND CONSUMPTION IN SLOVENIA. 12. 2.1. Slovenia’s Energy Balance Sheet. 12. 2.2. Production and Final Consumption of Energy in Slovenia. 17. 2.3. Air Emissions. 17. 2.4. Important Documents Concerning Energy in Slovenia. 19. 3. SUSTAINABLE DEVELOPMENT. 22. 3.1. Introduction to Sustainable Development. 22. 3.2. Sustainability and Supply Security. 23. 3.3. Slovenia towards an Energy Efficient Economy. 24. 4. ENERGY EFFICIENCY IN SLOVENIAN ORGANIZATIONS. 27. 4.1. Introduction to Slovenian Organizations. 27. 4.2. Energy Use in Organizations. 28. 4.3. Acknowledgements and Energy Management in Organizations. 29. 4.4. The Role of Energy Efficiency in Micro Organizations. 31. 5. MANAGING ENERGY WITH THE HELP OF ENERGY MANAGEMENT SYSTEMS32 5.1. From Environmental Management Systems to Energy Management Systems Development. 32. 5.2. Comparing Environmental and Energy Standards. 34. 5.3. Basic Principles of Energy Management Systems in ISO 50001. 36. 5.4. Results of Energy Management Practices in Buildings. 38. 3.

(4) 6. ENERGY MANAGEMENT IMPLEMENTATION. 40. 6.1. General Steps to Energy Management Implementation. 40. 6.2. Energy Accounting and Auditing 6.2.1. Environmental Accounting and Energy 6.2.2. Energy Audit. 45 45 49. 6.3. Software for Energy Management. 52. 6.4. Energy Management Standards in Practice. 53. 6.5. Evaluation and Energy Report. 53. 7. STUDYING THE CASE: INTRODUCTION OF ENERGY MANAGEMENT SYSTEM INTO THE MICRO ORGANIZATION KOPUN SIMTO LTD. 55 7.1. The Company`s Background and Introduction to the Problem 7.1.1. Company`s Background 7.1.2. Introduction to the problem. 55 55 56. 7.2. Energy and Investment Planning 7.2.1. Managing and Planning. 59 59. 7.3. Performing the Action Plan Activities. 61. 7.4. Energy Performance and Energy Management Calculations. 61. 7.5. CO2 Emissions in KOPUN SIMTO Ltd. 7.5.1. Oil Heater and Emission Results 7.5.2. Insulation and Other Improvements Results 7.5.3. Heat Pump and Emission Results 7.5.4. Regulation and Emissions Results. 70 70 71 72 73. 7.6. Results of Energy Management System Survey 7.6.1. Investment analysis. 75 75. 7.7. Case Study’s Summary. 82. 8. CONCLUSION. 84. 9. ABSTRACT. 85. 10. POVZETEK. 87. 11. LITERATURE. 92. APPENDIX. 1. 4.

(5) INDEX OF TABLES Table 1: Energy Balance Sheet of the Republic of Slovenia for the year 2011 Table 2: Energy indicators for Slovenia Table 3: Emissions per category (CO2 equivalent in Gg) Table 4: Emissions to air – calculation on NAMEA methodology in the industry sector, F, construction (F 41-43) Table 5: Emissions of CO2 equivalent per kWh Table 6: List of Slovenian companies in numbers of registered subjects Table 7: List of companies with environmental acknowledgements Table 8: Time-line of energy standards development Table 9: Comparison of environmental and energy standards Table 10: Action plan, practical example of key points Table 11: Structure of material flow balance (Jasch, 2009, 38) Table 12: IFAC cost categories, (Jasch; 2009, 38) Table 13: (Energy) Unified Accounting Plan for Companies Table 14: Sample of energy accounting form Table 15: Audit report tasks, Thrumann (2009, 19, 20): Table 16: Energy report, example of key points Table 17: Company data for the year 2009 Table 18: KOPUN´s SIMTO Ltd. action plan Table 19: KOPUN SIMTO Ltd, general information for further calculations Table 20: KOPUN SIMTO Ltd, Heat consumption and losses/Energy profile Table 21: Room 1 characteristics before and after improvements Table 22: Room 2 characteristics before and after improvements Table 23: Room 3 characteristics before and after improvements Table 24: Room 4 characteristics before and after improvements Table 25: Room 5 characteristics before and after improvements Table 26: Improvements in facilities Table 27: Improvements and regulation of temperature Table 28: Investment no.1 Table 29: Investment no. 2 Table 30: Investment no. 2 with the purchase of blue energy Appendix Table 1: Gross domestic consumption per energy source in structure (in TJ) Appendix Table 2: Slovenia and entrepreneurship (data for Figure1) Appendix Table 3: CO2 equivalent Appendix Table 4: Production of CO2 by sector. 13 15 18 18 19 27 30 33 34 44 46 47 48 50 51 54 56 60 62 62 64 65 66 67 68 69 69 79 80 81 2 2 3 4. INDEX OF FIGURES Figure 1: Gross domestic consumption of energy in Slovenia (TJ) Figure 2: Emissions by source for the year 2007 Figure. 4: Companies in numbers (statistics for the year 2011) Figure 5: Basic principle of an EnMS: Plan-Do-Check-Act Figure 6: Rogers five stages Innovation-decision process Figure 7: Annual energy costs in euros Figure 8: Tons of CO2 emissions. 17 19 28 37 40 83 83. 5.

(6) Mostly used Abbreviations and Units BTU. British Thermal Unit, traditional unit of energy equal to 1055 kJ, 0.293071 Watt hours, 253 calories. In scientific contexts the unit has been replaced by the SI unit of energy, the joule.. EUROSTAT. Statistical Office of the European Communities. g. Gram (mostly used Giga gram equal to 1.000.000.000 grams). ISO. International Organization for Standardization. W. The Watt is a derived unit of power in the International System of Units (SI). J. The joule is a derived unit of energy, work or amount of heat in the International System of Units (SI).. TEO. Tonne of equivalent oil. 1 teo is equal to 11,63 MWh, 41,87 GJ, 39.683.205,411 BTU. Energy audit - an inspection, survey and analysis of energy flows for energy conservation in a building, process or system to reduce the amount of energy input into the system without negatively affecting the output(s). Environmental friendly - also eco-friendly, nature friendly, environmental sound and green; are terms used to refer to goods and services, laws, guidelines and policies claimed to inflict minimal or no harm on the environment. Companies sometimes use these terms to promote goods and services by making environmental marketing claims and with eco-labels. Energy management - planning and operation of energy-related production and consumption units. Objectives are resource conservation, climate protection and cost savings. It is connected to environmental management, production management, logistics and other established business functions.. 6.

(7) 1. INTRODUCTION 1.1. Defining the Scope and Description of the Research Problem We are told that indigenous energy resources, providing us with energy, are running out by the time lifestyles’ demand on energy rises. This century is supposed to be characterised by intensified competition for energy and pushed-up prices. The European countries are aware of this problem, since Europe is an energy-intensive region and as a consequence heavily reliant on imports. The projection is that the needs for electricity are likely to increase in the next years and as the European Wind Energy Association predicts, by the year 2030, Europe is likely to import 70-percent (today 50-percent) of all needed energy1. Energy agencies today are facing the same problem as years before; they are aware that electricity consumption is rapidly increasing as the non-renewable resources are going out and the renewable resources producing energy with today’s technology are highly unlikely to produce enough energy for retaining a living standard we are used to. Because of the decline of non-renewable energy sources, “going green” became one of today`s topics in almost every organisation; government, business, or industry. Organisations and countries around the world face tremendous economic and environmental pressures as being effective and competitive in the global marketplace also means being environmentally friendly and meeting all the required standards given by the governments. Reductions in air and water pollution have to become one of the leading goals of every organisation, privately or publicly owned, where having an energy-efficient economy2 should be a goal of all the world`s developed countries3. The problem we refer to is great and tackles mostly uncontrolled energy consumption in the public and private sectors, not just in Slovenia but also in other EU member countries. Because of that, restrictions were met and new standards introduced as the European Union has to fulfil its commitments and obligations. It is believed that the standards will contribute and make the fulfilling of the demands easier. The environmental standard ISO 14001 was implemented in some Slovenian organisations, but as it was just partly covering the field of energy, a new standard was developed, recently. In 2009, the energy-related standard EN 16001 was introduced to the public, and in June 2011, the official version of ISO 50001 was published as an International Standard. The standards are usually used, implemented and later certified in organisations that are active in the industry; nevertheless, as we believe that each organisation can use its energy efficiently, we are pointing out the main advantages of energy efficiency. Having an energy-efficient business can bring a positive reflection on operational costs which are lower; therefore, a higher net income is generated and – not to forget – the organisation’s reputation increased. As today more and more consumers are seeking for products and services 1EWEA,. No fuel, February 2006, page 2 (http://www.ewea.org/fileadmin/ewea_documents/documents/publications/briefings/no_fuel_lo_res_72dpi.p df) 2 Related to energy-efficient economy. It tells how a country is at using its energy; it is presented in BTU (British Thermal Unit – the amount of heat energy needed to raise the temperature of one pound of water by one degree Fahrenheit) per US dollar of GDP. (Ukraine 138,000 BTU/$ of GDP; US 9,000 BTU/$ GDP, China 35,000 BTU/$ GDP; an energy-efficient economy has less than 7,500 BTU/$ GDP). 3 The criterion is GDP per capita.. 7.

(8) of certain organisations that have en energy-efficient business and whose products are environmentally sound. This also means a competitive advantage and greater reputation the organisation receives in the eyes of the consumers. We believe that today it is important to educate top managers and their employees about energy consumption and bring them to the level where they will strive towards having an energyefficient business. We believe that it is not necessary for an organisation to get certified, but it is necessary for it to implement the main objectives of energy standards and see for how much they can lower their energy demand and contribute to the overall savings and environment preservation by making adjustments. A practical example, a case study, is going to present and describe how the energy management fits in the structure of a micro organisation. We believe that each organisation, no matter its size, type or sector, can make adjustments and has a potential in energy savings if it is following the main objectives of energy standards and implementing them into the business. A micro company becoming energy efficient and having an energy-efficient business is therefore an example of good practice for all the other organisations. Hopefully, the reading will open a deliberation for managers of small, medium, and large organisations. 1.2. Purpose and Master`s Thesis Objectives One of our main purposes is introducing the energy management concepts and their positive influence on optimising operational costs related to energy consumption in every organisation. A practical example of a company that uses energy management concepts and made all the necessary adjustments should make an excellent example of how other organisations should act and react towards energy efficiency. Our belief is that with the use of the energy management concepts in all Slovenian companies, we would be a step closer to sustainable development in this field. Our main thinking is that an organisation does not have to get certified if this presents initial costs; it is more important that it implements the standards objectives and is willing to follow and achieve them in the long run. It is important that it teaches the employees, makes them desire changes and turns their acting towards making a contribution to overall energy savings in the business. Objectives in the theoretical part of our research:      . An examination of relevant available scientific literature referring to energy management; An examination of energy management systems; An examination of environmental key ratios/indicators; An examination of production and consumption of energy and dependence of energy imports in Slovenia; An examination of available software for energy accounting/environmental accounting; An examination of energy audit and energy reports.. Objectives in the practical part of our research:  Practical case study on energy management in a particular organisation.. 8.

(9) 1.3. Master`s Thesis Research Scheme 1.3.1. Master`s Thesis Hypotheses In the Master`s thesis, we are going to check the following hypotheses:  H1 – Energy consumption in Slovenia increased in the last years at the same pace as the EU’s energy growth rate;  H2 – In Slovenia, there are less energy certificates per capita compared to other European countries;  H3 – Based on the data of the last year’s energy consumption of the case company, we assume that there is no energy management programme or that the existing programme is set improperly;  H4 – Based on the hypothesis three we assume that there should be a long-term potential in saving up to 50-percent4 of the organisation’s energy consumption;  H5 – Managers in the case organisation are aware of the overall energy consumption in the company; however, they did not define what caused the biggest costs and where saving potential lied; up to now, no measures regarding energy savings were defined. 1.3.2. Research Realisation Steps 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14.. Defining and writing the content of the theoretical part; Scientific literature research about the energy management and related standards; Participation on conferences with related themes; Organisation’s research about the use of the standards in practice; Find examples of Slovenian organisations that implemented and were certified according to EN 16001; Gathering data with the support of annual outlooks and statistical data from various sources about the use of energy in organisations; Gathering data about the obligations set by the EU members about energy efficiency; Gathering data about the use of energy audit and energy accounting practices, as well as about the energy accounting software used in practice; Gathering the data for the study case; Organising the data and highlighting the focus of the study; Developing the case study’s narrative (writing the research purpose, background, and methodology about the collected and analysed data, defining limitations); Studying the general data, the data gathered with the analysis, making yearly comparisons within the organisation, testing hypotheses related to the case; Defining the approach and technology that suits the company’s needs and energy profile best (writing the recommendation); Summary. 1.3.3. Anticipated Methods. The anticipated methods used in the thesis will be: The U.S. Department of Energy predicts that, if widely adopted, the voluntary ISO 50001 standard could influence up to 60% of the world`s energy use across many economic sectors. Source: http://www1.eere.energy.gov/energymanagement/about.html. 4. 9.

(10)  The method of descriptive statistics will be used for writing and defining the content of the theoretical part related to energy consumption, general data about Slovenian organisations, sustainable development, and standardisation in general;  The data gathered from the Slovenian statistical database will further be quantitatively analysed; trends of consumption for Slovenia and EU have to be researched and analysed, so the hypothesis one and two can either be confirmed or refuted; moreover, the method of comparison is going to be used here, also ratios and coefficients about energy consumption and production will be analysed and tabularly or graphically presented;  For the study case, we need qualitative research to define the narrative and quantitative research for finding energy savings potential solutions; hypotheses three, four, and five are going to be proven; we will make trend analysis and growth rate of energy consumption, investment analysis, and the analysis of greenhouse gas emissions caused before and after the adjustments. 1.3.4. Presumptions and Research Limitations Presumptions:  P1 – Our presumption is that we will find enough appropriate and trustworthy literature about the energy management in general;  P2 – Our presumption is that we will find cases of organisations that are certified in accordance with the energy standards in Slovenia;  P3 – Our presumption is that we will find an organisation willing to collaborate and be a part of our research and that the organisation will be willing to make a contribution to the environment and lower their energy consumption, become energy efficient, and contribute to Slovenia’s sustainable development;  P4 – Our presumption is that the organisation will support and provide us with all the data necessary for further analysis of energy use in the organisation;  P5 – Our presumption is that we will find the best way of energy management practice and improvements which will contribute to savings of energy and related costs in the organisation. Moreover, we presume that the top management will be willing to carry all the costs that will arise and are necessary for making energy savings in the organisation;  P6 – Our presumption is that the main purpose of guidelines presented in EN 16001:2009 and ISO 50001:2011 can be implemented in all types and sizes of organisations, and as such also in the particular case organisation;  P7 – Our presumption is that this research could make a contribution to energy and related environment savings in green-house gas emissions in Slovenia, if other Slovenian companies would make similar adjustments;  P8 – Our presumption is that we will gather the needed data for emissions calculation by Slovenian energy companies and use the information of emissions production by source of energy in our case study. Research limitations:  L1 – Literature; the research and given knowledge is based on the given literature;  L2 – Business secrets; because of certain business secrets, we might be limited with the data gathered or the data that are going to be presented in the thesis;. 10.

(11)  L3 – Limitations connected to top management’s wishes and requirements; we have to find the best solution of making energy savings with adjustments in organisational practice, as well as in adjustments connected to investments into buildings, heating system, ventilation, etc. We have to take into account the investment and related costs that the top management is willing to spent.  L4 – Limitations connected to the accessibility of energy sources and infrastructure for the organisation, what technologies and infrastructure can be implemented in the company’s buildings, as there are certain boundary conditions which have to be accounted for;  L5 – Time limitations; there exists a certain time scale, a period in which the adjustments in the organisation have to be made.. 11.

(12) 2. ENERGY PRODUCTION AND CONSUMPTION IN SLOVENIA 2.1. Slovenia’s Energy Balance Sheet The Energy Balance Sheet of the Republic of Slovenia (see Appendix Table 1) is made by the Ministry of Economic Development and Technology based on the EUROSTAT concept and is therefore fully comparable to other member states’ (EU-27) Energy Balance Sheets. The methodological groundings of the analysis state the balances main purpose as an indicative representation of energy production and consumption in natural quantities (tons, cubic meters) translated in equivalent energy values as Joules. For our research the chapter of end use of energy will be the most important as it shows how the generated energy is used by sectors. The end use of energy in the Energy Balance Sheet of the Republic of Slovenia for the year 2011 is divided to sectors with the methodology of Standard Classification of Activities (SKD 2008), fully comparable to the International Standard Classification of Activities (EU NACE Rev 2); industry (section C, without C19, section B09 and section F), traffic, other use (households, services and other use).. 12.

(13) Table 1: Energy Balance Sheet of the Republic of Slovenia for the year 2011 EBRS (TJ) 1 GWh = 3,6TJ = 85,98 teo (tons of equivalent oil) Primary production Import Change in inventories Export (without 50% NEK to HEP) International sea storehouses GROSS CONSUMPTION TRANSFORMATION – ENTRANCE Thermo power plant – production of main activities Thermo power plant – single producers Nuclear power plant Heating station TRANSFORMATION – EXIT Thermo power plant – production of main activities Thermo power plant – single producers Nuclear power plant Heating station CONSUMPTION in ENERGETIC SECTOR LOSS BY DISTRIBUTION AVAILABLE FOR END USE Non-energetic consumption End use – energetic Industry B08 B09 C10 C11 C13 C14 C15 C16 C17 C18 C20 C21 C22 C23 C24 C25 C26 C27 C28 C29 C30 C31 C32 C33 F TRANSPORT Train Road Air OTHER HOUSEHOLDS SERVICES, COMERCIAL ACTIVITY AND OTHER CONSUMPTION STATISTICAL DIFERENCES NETO IMPORT DEPENDENCE OF ENERGY IMPORT %. 2009 REALIZATION. 2010 ESTIMATION. 2011 ANNOUNCEMENT 147.344 186.151 3.376 32.775 0 304.978 135.789 63.134. INDEX 2010/200 9 101,0 108,6 .. 123,4 56,0 102,0 101,2 103,8. INDEX 2011/201 0 98,6 87,4 .. 50,3 0,0 102,4 103,0 96,8. 148.026 196.222 2.052 52.797 1.303 292.200 130.187 62.869. 149.501 213.067 1.291 65.158 729 297.973 131.785 65.240. 2.366 62.605 2.346 50.821 26.590. 3.056 61.712 1.776 51.956 28.314. 3.109 67.708 1.838 53.575 27.983. 129,1 98,6 75,7 102,2 106,5. 101,7 109,7 103,5 103,1 98,8. 1.583 20.660 1.989 4.557 4.394 203.884 4.912 198.972 53.305 725 2 2.965 690 1.028 214 93 2.166 7.888 279 4.836 2.148 2.255 8.075 9.636 2.578 147 1.676 953 1.485 48 915 247 223 2.033 78.065 936 75.990 1.139 67.602 46.234 21.368. 1.188 20.365 2.089 4.260 5.025 208.610 5.527 203.101 54.663 749 2 3.044 694 1.033 218 98 2.266 8.028 291 4.974 2.215 2.323 8.155 9.914 2.662 156 1.771 997 1.536 50 961 257 231 2.040 77.416 1.155 75.194 1.067 71.022 47.404 23.618. 1.221 22.344 2.028 4.359 4.784 212.739 5.118 207.622 58.589 833 2 3.200 754 1.107 236 104 2.309 8.642 312 5.211 2.380 2.495 8.591 10.712 2.871 166 1.890 1.070 1.664 53 984 276 246 2.482 78.810 1.267 76.476 1.076 70.223 46.432 23.791. 75,0 98,6 105,0 93,50 114,40 102,3 112,50 102,1 102,5 103,4 104,6 102,7 100,6 100,4 102,0 105,0 104,7 101,8 104,4 102,8 103,1 103,0 101,0 102,9 103,3 106,4 105,7 104,6 103,4 102,8 105,0 103,9 103,4 100,3 99,2 123,4 99,0 93,7 105,1 102,5 110,5. 102,8 109,7 97,1 102,30 95,20 102,0 92,60 102,2 107,2 111,2 115,4 105,1 108,6 107,2 108,1 106,8 101,9 107,6 104,8 107,5 107,4 105,3 108,1 107,8 105,9 106,7 107,2 108,4 107,0 102,4 107,5 106,7 121,7 101,8 109,7 101,7 100,0 98,9 98,0 100,7 0,0. 0 143.517. 0 147.398. 0 153.053. 0,0 102,7. 103,8 101,7. 49,5. 49,5. 50,3. 100,1. Source: Ministry for Economic Development and Technology (Ministrstvo za ekonomski razvoj in tehnologijo (Ministrstvo za gospodarstvo), Energy Balance Sheet of the Republic of Slovenia 2011; http://www.energetikaportal.si/fileadmin/dokumenti/publikacije/Energetska_bilanca/EBRS_2011.pdf). 13.

(14) The statistics shows that the gross domestic consumption of energy, announced for 2011, is 304.978 TJ and hereby 2,4-percent higher compared to the year 2010. The end use of energy was for 2-percents higher as in the year 2010 and there was a 4-percent increase in CO2 emissions, however a decrease of 3-percent of SO2 and 1-percent of NOX were measured. Primary domestic energy production does not fully cover the consumption as more than 50percent of energy needs have to be covered with imported energy sources (estimation for 2011 was an import of 50,3-percent). The supply of domestic energy resources rests on lignite, brown coal, hydro energy, wood biomass and electricity generated from the nuclear power plant Krško (NEK). Not to forget the contract with Croatia, binding NEK exporting 50-percent of all generated electrical energy to Croatia; which was an estimated amount of 2.950 GWh in 2011 (Energy Balance Sheet of the Republic of Slovenia, 2011, 20). According to the Balance Sheet Slovenia’s gross domestic consumption (see Appendix Table 2) was in 2011 an estimated amount of 304.978 TJ by a primary production of 147.344 TJ, an import of 186.151 TJ and an export of 32.672 TJ (change in inventories is 3.375 TJ). The structure of gross domestic consumption per source of energy shows, that oil products have a leading share of 35,9-percent, followed by nuclear energy by 21,4-percent, solid fuel with 20,5-percent, natural gas 13,2-percent, renewable energy sources with 6,8-percent, hydro energy 5,8-percent, non-renewable industrial waste 0,3-percent and net import of electrical energy -3,6percent. With energy consumption emissions of harmful substances are being produced. The emissions of harmful substances were estimated to have risen in the year 2011 in comparison to 2010; overall CO2 production (transformations, industry, traffic, other use and desulphurisation) has risen for 4-percent whereas the production of sulphur dioxide has overall fallen for 3-percent compared to the year 2010. Table 2 presents some key indicators about energy in Slovenia. The analysis reference year is the year 2000 as some data for the prior years is not available. The data was wholly collected on the SI-STAT Database of the Statistical Office of the Republic of Slovenia and is presented as stated on their webpage.. 14.

(15) Table 2: Energy indicators for Slovenia UNIT. 2000. 2006. 2007. 2008. 2009. 2010. 2011. GDP per capita. Mio €. 21.699. 31.050. 34.594. 37.244. 35.556. 35.607. 36.172. GDP per capita. €. 10.908. 15.464. 17.135. 18.420. 17.415. 17.379. 17.620. DOMESTIC PRODUCTION ENERGY. 1000 teo. 3.152. 3.446. 3.456. 3.672. 3.541. 3.727. 3.763. ENERGY SUPPLY. 1000 teo. 6.487. 7.318. 7.336. 7.749. 6.990. 7.146. 7.192. FINAL USE OF ENERGY. 1000 teo. 4.638. 5.229. 5.189. 5.519. 4.891. 5.058. 5.003. ENERGY DEPENDANCE. %. 52,0. 52,0. 52,7. 55,3. 49. 48,6. 47,8. %. 71,5. 71,4. 70,7. 71,2. 70. 70,8. 69,6. ENERGY INTENSITY (ENERGY SUPPLY/GDP). teo/mio EUR 2000. 351. 312. 293. 299. 293. 295. 297. ENERGY INTENSITY (FINAL USE/GDP). teo/mio EUR 2000. 251. 223. 207. 213. 205. 209. 207. USE OF ELECTICAL ENERGY/GDP. MWh/mio EUR 2000. 577. 567. 533. 500. 478. 499. 526. ENERGY SUPPLY. teo/capita. 3,293. 3,640. 3,621. 3,813. 3,415. 3,490. 3,510. FINAL USE OF ENERGY. teo/capita. 2,354. 2,601. 2,561. 2,716. 2,389. 2,470. 2,440. kWh/capita. 5.413. 6.615. 6.584. 6.369. 5.580. 5.903. 6.204. t/teo. 2,3. 2,3. 2,3. 2,3. 2,30. 2,25. -. ktoe. 767,9. 737,1. 853,7. 1.011,7. 1.058,2. 948.9. -. ENERGY EFFICIENCY. USE OF ELECTRICAL ENERGY THE CONTENT OF CARBON IN ENERGY SUPPLY USE OF RENEWABLE ENERGY SOURCES. Source: Statistical Office of the Republic of Slovenia (SI_STAT) The main indicators show that there was an overall trend of growth in the GDP and GDP per capita until 2008, followed by decrease in the year 2009 and quite same levels afterwards. A. 15.

(16) strong correlation between the GDP indicators and energy indicators such as energy supply and the final use of energy is obvious. There was however a negative trend in energy efficiency over all the years. The difference between the energy supply and its final use has increased from 1.849 teo in the year 2000 to 2.189 teo in the year 2011 – energy losses have increased by 18,4 %. They’re a consequence of energy supply rising faster (10,9 % in the period 2000 – 2011) than energy final use (7,8 %). The energy efficiency ratio shows that Slovenia became energy less efficient. The energy intensity ratio compares units of tons of equivalent oil (final consumption, STAT SI, internet data) to the national GDP; the indicator has decreased in the period (Development report 2012) meaning that the unit of GDP output is less burdened by energy production and consumption. The levels are quite stable since 2009 however. The energy intensity is connected to a country’s economy structure, the share of services, energy intense industry, extent of traffic (Development report 2012) and the difference in energy intensity inside the industries. The use of renewable energy sources has risen over the years, it is a positive trend. A lot of companies as well as households apply and ask for financial support by the Slovenian Eco Fund fulfilling some criteria, they can get non-refundable financial incentives for their investments connected to energy efficiency and production or use of renewable energy sources. An excellent way of energy production from renewable resources is the generation of energy from sun, water and biomass. The research project5 (Černjavič 2009) has shown great potential in this field. Today there is a larger number of biogas works in Slovenia than it was a few years ago, nevertheless the companies producing energy from biomass are facing difficulties (high prices of natural resources corn silage, changes in national law, dissatisfaction of neighbours claiming smell). The Regulation amending the Regulation on support for electricity produced from renewable energy sources (Official Gazzette. RS nr. 43/2011) effective since 1.7.2012, demanding biogas works warrant to subsidy using just 40-percent of grain in the process, might be poor and “hit-and-missed”. Restrictions in this area have to be met since the food is becoming more and more expensive, but still a middle way has to be found suitable and good for all. One of the restrictions might be “use of grain in the process, which should not exceed a certain amount of grain produced in the countries rural economy”. For example; use 30-percent of the grain produced in a certain field for production of biogas, whereas other 70-percent should be intended and used for food products, and not wasted. Summed up, this would mean that 30-percent of grain produced on the fields of Slovenia would be used for the production of biogas. According to the 2011 Energy Balance Sheet of the Republic of Slovenia the production of energy from renewable sources was predicted to be 19.792 TJ and so lower for 2,4-percents as it was estimated for the year 2010. The amount of energy generated by hydro power plants was predicted to be 13.569 TJ, 1.547 TJ of used energy was coming from imported renewable sources. Hypothesis one was that Slovenia’s energy consumption increased in the last years at the same pace as the EU’s energy growth rate; according to the data gathered by the Slovenian Statistical Database and to Slovenia’s Energy Balance Sheet of the Republic of Slovenia, the energy 5. Recognized and rewarded by the Joseph Stephan Institute (2009).. 16.

(17) consumption – final use of energy has not increased but in opposite, decreased over the last years as did Slovenia’s energy dependence. The hypothesis one (H1) is false and can be as such fully rejected. 2.2. Production and Final Consumption of Energy in Slovenia The Statistical Office of the Republic of Slovenia reports a decrease of final energy consumption in the year 2011 compared to the year 2010 (Annual energy statistics, Slovenia, 2011 - final data). Half of the energy is reported to be spent in the form of petroleum products influenced by a higher consumption of diesel (11-percent), followed by the consumption of energy in form of electricity, natural gas and renewable sources as solar, geothermal, wood, waste and biofuels. The reported data shows a 39-percent share of energy production generated by the nuclear power plant Krško, followed by a 36-percent share of electricity generated by thermal power plants, 24-percent by hydro power plants and less than a percent by the photovoltaic power plants. According to the before mentioned report, the used energy in form of petroleum products has to be fully imported to cover the country´s needs, meaning further that almost 50-percent of energy has to be imported and only the electric energy use can be covered with domestic production. In Figure 1 gross domestic consumption of energy is presented proving the share of imported energy to be 50-percent (Energy Balance Sheet of the Republic of Slovenia 2011) Figure 1: Gross domestic consumption of energy in Slovenia (TJ) Domestic production. Import. Export. Change in inventories. 1% 9% 40%. 50%. Source: Energy Balance Sheet of the Republic of Slovenia 2011, 2011, 11 2.3. Air Emissions Air emissions are air streams contaminated with problematic levels of pollutants. Examples include emissions of energy combustion such as nitrogen oxides (NOx), sulphur dioxide (SO2), carbon monoxide and carbon dioxide, PM10 parts, particulate matter consumed and volatile. 17.

(18) organic compounds as well as other pollutants such as metal particulates. Air emissions can also include radiation, noise and heat. Waste heat and air emissions are typically estimated based on the type of energy, materials and processes used (e.g. solvents, cleaning agents). The fossil fuel energy (primary energy) used to generate the electricity purchased by an organization depends heavily on the local or national energy mix and technology used to generate electricity. Several countries publish national conversion factors for the corresponding primary energy input. The Kyoto Protocol (1997) covers industrial and energy linked global warming gas emissions. The main substances are carbon dioxide, nitrous oxides, methane, sulphur hexafluoride, perfluorcarbons and hydrofluorcarbons, resulting from fuel combustion, treatment processes in industry and households as well as reactions from different processes. The data for Slovenia for the production of CO2 by sector, published by the Slovenian Environmental Agency is presented in appendix table 4, whereas in table 3 we are presenting some selected sectors and their CO2 equivalent emissions production from The Statistical Office of the Republic of Slovenia. Table 3: Emissions per category (CO2 equivalent in Gg) YEAR ENERGETICS PROCESSES IN INDUSTRY AGRICULTURE. 2000 14.958. 2005 16.194. 2006 16.336. 2007 16.432. 2008 17.472. 2009 15.895. 2010 15.980. 1.063. 1.260. 1.300. 1.311. 1.186. 973. 971. 2.137. 2.006. 2.034. 2.092. 1.978. 1.963. 1.963. Source: SI-STAT Table 4: Emissions to air – calculation on NAMEA methodology in the industry sector, F, construction (F 41-43) YEAR. EMISSION. 2008. 2009. 2010. CO2 (Gg). 160,9. 127,5. 92,3. NOX (Mg). 1.428,7. 1.133,1. 736,9. SOX (Mg). 2,2. 8,9. 7,9. PM 10 (Mg). 90,9. 72,9. 55,1. F (CONSTRUCTION 41-43). Source: Statistical Office of the Republic of Slovenia The main but not the most influential pollutant and greenhouse gas is the carbon dioxide. We are operating with the results, presented by the Slovenian Environmental Agency for the year 2007. In figure 2 emissions by source are presented. In table 4 emissions to air based on NAMEA calculation methodology are presented as they define certain emissions by the source of pollutant in the construction sector.. 18.

(19) Figure 2: Emissions by source for the year 2007. Emissions by source 3%. 3%. 10%. 26%. 9%. 11%. 32% 6%. Traffic. Energetics. Industrial processes. Fuel in industry. Fuel in households and commercial use. Agriculture. Waste. Other. Source: Slovenian Environmental Agency Further we are presenting the data gathered from Slovenia’s energy distributors, Elektro Maribor and Energetika Maribor. The presented data includes the emissions caused by technology production and emissions caused by processes where the source of energy is transformed into electrical energy. Table 5: Emissions of CO2 equivalent per kWh Grams of CO2/kWh Coal 800-1050 Natural gas 430 Nuclear energy 6 Hydro energy 4 Wood 1500 Solar energy 60-150 Wind energy 3-22 Source: Elektro Maribor, Energetika Maribor The energy consumption does mainly not cause emissions; it is the production of energy itself. The production of nuclear energy and hydro energy has almost no emissions to air (by neglecting the emissions caused by waste). This data is important as it will be used in the case study’s calculations. 2.4. Important Documents Concerning Energy in Slovenia Each European country has its own legislation regarding energy and basic documents with guidelines for satisfying the targets set by the European Union (EU). The Slovenian parliament. 19.

(20) adopted different documents regarding the energy policy including the security, reliability and sustainability of energy supply and consumption. The most important documents in Slovenia are: - The Energy Act (Energetski zakon, 2007) accompanied by The Law of Changes and Supplementations of the Energy Law (Zakon o spremembah in dopolnitvah Energetskega zakona, last change in 2012) and the Construction Law (Zakon o graditvi objektov, 2002, last change in 2012); - The Resolution on the National Energy Program (Resolucija o nacionalnem energetskem programu; ReNEP, 2004) and the Green Book for the National Energy Program (made for public discussion and the National Energy Program for Slovenia; consultation paper supporting the creation of a new sector program document); - Operational Program, Reduction of Greenhouse Gas Emissions by 2012; - The Second Action Plan for Energy Efficiency (Drugi nacionalni akcijski načrt za energetsko učinkovitost za obdobje 2011-2016 (AN URE 2); - Environmental Protection Act (Zakon o varstvu okolja, ZVO-1, 2004 s spremembami in dopolnitvami v letih 2006, 2007, 2008 in 2010); - The Action Plan for Renewable Energy Sources for the Period 2010-2020 Slovenia (Akcijski načrt za obnovljive vire energije za obdobje 2010-2020 (AN OVE) Slovenija; Slovenia’s Energy Law has gone through changes for several times in the past years; the last modification, improvement was made in the year 2012. This Act provides conditions for the safe and reliable supply of energy services according to market principles, the principles of sustainable development, taking into account its efficiency, economical use of renewable energy sources and environmental protection conditions. It ensures competitiveness in the energy market by the principles of impartiality and transparency, taking into account consumer protection and enforcement of effective control of supply. The resolution of the National Energy Program for the period 2008-2016 was made on the basis of the Directive 2006/32/EC of the European Parliament and Council. The Directive 2006/32/EC on energy end-use efficiency and energy services is accompanied by directives as the Directive 2003/87/ES, establishing a scheme for greenhouse gas emission allowance trading within the Community and amending Council Directive 96/61/EC, the Directive 2002/91/ES on the energy performance of buildings, the Directive 2005/32/ES on setting a framework for eco-design requirements for energy-using products. The Resolution of the National Energy Program issued in 2004 and 2011 was the first out of all three (the last should be issued in 2014), prepared in accordance with the requirements of Slovenia’s Energy Law providing long-term development objectives and policies taking into account the environmental as well as technological criteria, the development of public infrastructure and infrastructure of national importance with the incentives and mechanisms to promote the use of renewable energy sources and efficient use of energy. The first main requirement of the EU Directive 2006/32/EC, concerning all member states and demanding to meet the total of 9-percent savings in energy’s end use in nine years (the period from 200820166). The period from 2001-2005 is taken as a starting-point for the determination of final savings in energy’s end use; an annual average for this period is taken but without the use of fuel in plants which are trading with the allowance of greenhouse gas emissions. The amount for this period is 47.349 GWh per year. 6. 20.

(21) The Second Action Plan for Energy Efficiency for the period 2011-2016 was made on the basis of the European Parliament Directive 2006/32/ES from 5. April 2006 on efficient use of end energy and energy services, nullificating the Directive 93/67/EGS. The Action Plan for Renewable Energy Sources is based on the European Directive 2009/28/ES from 23. April 2009 encouraging the use of energy out of renewable sources, and later changed and nullificated Directives 2001/77/ES and 2003/30/ES. European countries strive to accomplish the desired goals and required energy savings by having a sustainable and secure energy market. In the next chapter we are linking a countries sustainable development to its energy efficiency and energy use.. 21.

(22) 3. SUSTAINABLE DEVELOPMENT 3.1. Introduction to Sustainable Development “Energy efficiency is the cornerstone of a sustainable society.” (The European Council for Energy Efficient Economy).. The concept of sustainability is overall presented as the triple bottom line (short TBL), first presented and described by John Elkington in 1998, whereas the sustainability itself was defined by the Brundtland Commission7 (Gro Harlem Brundtland) in 1987 (Wikipedia, 2012). Today sustainable development is widely and mostly defined with its quotes “sustainable development is the development that meets the needs of present generations without compromising the ability of future generations to meet their own needs”. The TBL should be made up of social, economic and environmental aspects, whereas today there are different concepts of these threes. There is the 3Ps (people, planet, profit) made by Patrick Geddes and the 3Es (equality, environment, economy) (Wikipedia, 2012). In the thesis we are closer to the termin of sustainable development as a tree-dimensional concept referring to economic growth, social development and environmental protection as the definition of D.C. Momete (Momete, 2011, 5.222). Momete describes energy as a key issue in the pursuit of sustainability as major environmental damages are related with the extraction, production, distribution and use of energy. In her paper, Investigation of the Impact of energy dynamics on Sustainable Development, a bi-univocal relationship is presented as in the past there should have been an impact of energy on sustainable development, whereas today the forthcoming energy options strongly depend on the sustainability criteria. The exponentially increasing demand for energy requires a sustainable energy future, having an energy efficient economy can be the advantage, as it aids to the improvement in sustainable development, reduces energy poverty and subsequently raises access to education and health services, food security and rural development. Different energy options depending on the sustainability criteria are described (Momete, 2011, 5.225) as indicators that link energy with the three-dimensional concept of sustainable development together. These options refer to the development of the global energy market and its primary energy options; involve energy solutions in the way of energy savings, energy efficiency plans, and cost-effective technologies, as well as the use of new forms of energy and better technologies. We can see that energy in its wide concept is linked nowadays with the concept of a country’s sustainable development. The European Union (EU) and the European Council (Council) for an Energy Efficient Economy offer organizations, governments, research institutes and others knowledge and information regarding energy as it is important to reach some goals set in the past. One of their main driving factors is the signed Kyoto protocol and its obligations, having an energy efficient economy. In the past, the EU member states committed themselves to an 8percent reduction in greenhouse gas emissions by the year 2012, in practice it was a reduction of emissions by 20 to 30-percent compared to a business-as-usual scenario. Today we are in the second commitment period ending 2020. Formally the World Commission on Environment and Development (WCED), the Brundtland Commission's mission is to unite countries to pursue sustainable development hand in hand. 7. 22.

(23) Countries are striving to change and improve in the means of energy production, energy use and energy efficiency as it is told that “an increasing share of the energy supply must come from renewable energy sources” and “if energy demand keeps increasing, it will be virtually impossible to satisfy our needs with renewables alone. Energy efficiency is the cornerstone of a sustainable society.” (European council for an Energy Efficient Economy, 2012). The goal of our country is mostly connected to the demands of the Kyoto protocol (second phase bonds to year 2020) and the strategic goals set by the European Union related to energy policy. The Kyoto protocol states the binding targets in reduction of four greenhouse gases; methane, carbon dioxide, nitrous oxide and sulphur hexafluoride. By now, the second commitment period started (1 January 2013 to 31 December 2020) which demands a reduction in emissions by 18-percent below the level compared to their base year, 1990. The USA, Russia, Japan, Canada, China and India are not participating in the second phase. Slovenia signed the Kyoto Protocol on October 1998 and ratified it to the United Nations Framework Convention on climate change in July 2002 (UL RS, no. 17/2002) and so undertook the obligation of emissions reduction “20-20-20” as did many other European and nonEuropean countries. It is still present in the second phase (Kyoto Protocol Extension) and so obliged to the newly set emissions reduction. For the achievement of the Kyoto targets and a sustainable and reliable energy sector it is important to make positive changes, to promote energy efficiency, energy savings, to implement efficient technologies and policies regarding energy use in companies. We believe that a reliable and sustainable energy sector is essential for the countries’ sustainable society and economy, for the present and future generations. Managing it well is of significant importance and therefore energy management in companies is essential as well. 3.2. Sustainability and Supply Security Sustainability and supply security of energy is linked with the resources of energy, access of energy and the distribution of energy. It can be divided into short term and long term security, where long term security measures the raise of independence on imported energy sources, the increase in the number of national energy suppliers through the generation of renewable energy, the increase in the number of self-sufficient households and the reduce of overall demand on energy in all sectors. For a countries sustainability and energy security it is important to raise awareness about energy consumption, effective use of energy and the possibility of generating renewable energy with a goal of lowering the dependence of imported energy sources by becoming self-sufficient. For reaching all these, the need of managing energy effectively and lower the overall consumption, has risen. The European Commission expects that the import reliance will jump from 50 to 65percent by the year 2030, if no changes are going to be made today, the usual business with no changes would lead us, as well as other countries, to high dependence in energy imports in the next years.8 Changes are of imperative need and pivotal. Main directions for sustainability and supply security in the energy sector have to be made and further on followed; whereas it should not be 8. (http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:52007DC0001:EN:NOT).. 23.

(24) forgotten that consumers have to be taught the right way of spending the available sources. One of the driving factors is to present the changes in energy needs (especially lower the need for energy) and the importance of the use of energy management practices in businesses. As possible changes in energy use will bring positive results to the environment and later on prove management practices being good, every (small) business could make a contribution to overall energy security. Top managers have to widen their plans and include sustainable development to their business plans in the forms of managing energy and their business practices in an environment friendly way. A well standing company with enviable yearly profits should have a good and long term energy plan as it is most probably that such an organization, making goods or services with high added value, could last for many years and have an impact on the environment. Today management system standards are in use, providing a robust framework of good practices and help organizations adapt and evolve with a balanced approach in economic activity, environmental responsibility and social progress. All these should contribute to greater sustainability and supply security of a company and subsequently improve the country’s energy (in)dependence. 3.3. Slovenia towards an Energy Efficient Economy As the European Commission states, Europe`s energetic industry has faced some difficulties over the past years (volatility in oil prices, interruptions in energy supply, blackouts aggravated by inefficient connections between national electricity networks, and the difficulties of market access for suppliers in relation to gas and electricity markets, as other) and issues which became the driving factors for creating a policy, which should help all member countries to manage energy consumption, production and strengthen the economy. The European Commission adopted a communication proposing an energy policy for Europe with the goal to combat climate change and boost the EU’s energy security and competitiveness. This raised the need of setting up a new energy path which would lead the member countries towards a more secure, sustainable and low-carbon economy. (European Comission, http://epp.eurostat.ec.europa.eu/portal/page/portal/energy/introduction). Based on the European Commission’s proposal, in March 2007 an integrated approach was adopted, promising lower emissions together with boosting and increasing greater energy security as well as EU competitiveness. In 2009 the proposal became a policy package and a binding legislation with which following targets have to be met by 2020 (Government Office of the Republic of Slovenia for Climate Change, (http://www.arhiv.svps.gov.si/si/podnebni_ukrepi/podnebna_politika_v_sloveniji/evropska _unija): -. reducing greenhouse gas emissions by at least 20-percent (compared with 1990 levels); lower the end use of energy by 20-percent; raising the share of renewable energy to 20-percent; increasing the level of bio fuels in transport fuel to 10-percent.. The policy is believed to bring benefits to the energy market as greater choice of energy sources and the spur of investments in energy infrastructure should arise. The use of renewable energy sources is seen as a key element reducing the dependence on fuel from non-member countries, reducing emissions from carbon sources, and decoupling energy costs from oil prices. The. 24.

(25) second key element is constraining demand, by promoting energy efficiency; both within the energy sector itself and at end-use. The targets became also Slovenia’s goals, which have to be met by the year 2020. As the targets are expected to comprehend to sustainable development, greater energy security and increased competitiveness all this would comprehend to a more efficient economy, reduction in emissions production, improve energy efficiency, economic competitiveness, regional development, employment and other. For achieving all the targets, set by the EU and the Slovenian government, by individuals and in companies as well as in households it is good to have a program or project. The Government Office of the Republic of Slovenia for Climate Change presents (on its web page) a line of projects which are believed to comprehend to energy savings and to the promotion of energy efficient use as well as climate change. The programs are the Working conference on ecoefficient public administration, the Electricity car, the Demonstration project for battery electric vehicles and charging stations, the Action ecomobile, the Sustainability program of the value chain of wood, the Planet Earth: I understand and I act, the U4energy – the European competition for energy efficiency in schools, the Green Slovenia – a low carbon society and the project Slovenia is lowering the CO2. The sector for Energy Efficiency and Renewable Energy Sources of the Ministry for Infrastructure and Spatial Planning prepares a line of regulations as well. The regulations are believed to promote the use of energy from renewable energy sources and combined heat and power generation with high efficiency. Slovenia promotes also energy saving for achieving greater supply security through financial incentives that are available for households and organizations. Financial grants are given for the purchase of more efficient equipment for heating, investing in the building envelope etc. In buildings which have more users, costs for energy spent for heating have to be divided on the actual consumption which is measured and found out with help of heat meters in form of dividers or calorimeters. The heat divider is a device installed on each radiator in an apartment. It measures the energy spent for heating and reports its consumption which is further analyzed and calculated, divided on fixed and variable costs. Companies that have their head office in larger buildings might have a heat cost divider. Also they can for instance lower their energy spent for heating by closing the radiators they do not need. The above mentioned projects have shown positive results whereas other energy management projects of individual companies are today an example of good practice as they have been awarded not just in Slovenia but also in the EU. Both Menerga's project for Mercator's business and multi-purpose Center Pesnica, and the extension of the Elementary School of Brezovica have been awarded for an energy efficient project. Company Revoz d.d. has gained the title of energy efficient company by the readers of the newspaper Finance. As we see management practices improving energy efficiency and energy savings are put into practice in some companies. Programs are being made to show us where we are and where we want to be in the future. A company has to prepare a good energy program and long term plan concerning energy use as it guides it to a cleaner and energy efficient future. In this point energy management concepts, about which we will talk in the next chapters, can be applied and used. The main focus is on the. 25.

(26) establishment of a program designed for a specific company which will improve its energy efficiency, boost its sustainability, and lower the cost for energy and emissions to air.. 26.

(27) 4. ENERGY EFFICIENCY IN SLOVENIAN ORGANIZATIONS 4.1. Introduction to Slovenian Organizations In the last decades, humans and organizations producing goods or services became dependent on energy. Energy is the source, the power which is pushing and enabling organizations to work in the anticipated and desired way. The power of energy can be generated through different sources, finite or infinite, and as we are aware of, today it is still mainly the finite sources driving one country’s business. And as an organization’s need for energy supply depends mainly on finite energy sources and their volatile market price, it became even more desirable to manage its business in the way that its activities consume the minimum amount of energy at the least cost. We are going to analyse the background to organizational structures in Slovenia. How many micro, small, medium and large organizations do we have? How many of them follow environmental and energy standards etc. our presumption is that most organizations with the micro structure are not aware of the contribution they can make or think that the contribution would be small and insignificant, by following environmental and energy management guidelines. The Statistical Office of the Republic of Slovenia (available internet data) examines that in the year 2011 there were 169.360 registered organizations of which 46,94-percent were listed as legal entities. 94,88-percent of all organizations have the micro structure, meaning they are fulfilling at least two out of the three main requirements set by law, number of people employed below 10, generated revenues not exceeding 2,0 million euro and value of their assets below 2,0 million euro. According to the data collected, the majority of companies have the structure of a micro company and employ all together, most of the countries work force; therefore raising awareness in this segment is necessary (see figure 4). Table 6: List of Slovenian companies in numbers of registered subjects Legal entities Companies together. Other legal entities (State authorities and local communities, institutions, societies and associations, cooperatives) Natural entity Together. Micro Small Medium Large. Number of Subjects 54.707 48.218 5.025 1.216 248. Micro Small Medium Large. 24.914 22.989 985 846 94 89.739 169.630. Source: Statistical Office of the Republic of Slovenia. 27.

(28) Figure. 4: Companies in numbers (statistics for the year 2011). 500000 400000 300000 200000 100000 0 Micro. Small. Number of subjects. Medium. Income (mio EUR). Large Number of employees. Source: Statistical Office of the Republic of Slovenia. In 2011 there were 41.832 registered companies (38,49-percent) in the construction sector (F) with the micro structure, employing 0-9 people (Statistical Office of the Republic of Slovenia). This information is exposed as our case company is from this sector. We believe that small companies might not take initial steps to environmental friendliness or environmental soundness in a product or process as they might have other bigger investment costs with high return rates and they might not believe that they can make a significant contribution to energy and cost savings. Slovenia’s Environmental Public Fund, Petrol d.d. and other government incentives offer almost all the time programs based on non-returnable subsidies to entities and households encouraging business to energy conservation. We believe that Slovenian organizations with a micro structure, managing its energy consumption in the right way, can make a significant contribution to the environment and energy savings in general and be a good example to others, as it will be our case company in chapter 7. 4.2. Energy Use in Organizations Energy is mostly used for powering technology appliances, heating, cooling, ventilation, powering large machines, fuel for cars, power for computers and batteries, lighting and other appliances without which the usual business process would not work. Detailed consumption measurements and other concerns, were prior the “environmental awareness campaigns” mostly put a side. A small number of companies was actually tracking its energy costs and trying to reduce them. With the raise of environmental awareness as well as the increased need of cost reduction for lowering operational costs of energy consumption, its measurements became more important. For achieving greater energy efficiency and lowering energy costs a new way of management appeared, energy management, bringing some new standards into consideration. One of the first directly connected to energy was the Energy management systems standard, EN. 28.

(29) 16001:2009 Energy Management Systems Standard followed by the ISO 50001:2011 Energy Management Standard. Prior that, environmental standards as the ECO - Management and Audit Scheme and ISO 14001:1996 Environmental Management Standard, ISO 14001:2004 Environmental Management Standard covered the managing of processes, products and services in the environmental aspect. Some Slovenian companies have good energy management and are a great example to others. Mercator d.d., Kostak d.d., Krka d.d. and a line of public and private companies have up to now gained the reward for an Energy efficient company on the conference named Days of Energetics (Dnevi energetikov) organized by the newspaper Finance. 4.3. Acknowledgements and Energy Management in Organizations There are several acknowledgements for companies in use today; standardization, certification, labelling and accreditation (Wikipedia, 2013). Standardization Standards are defined by ISO as “documented agreements containing technical specifications or other precise criteria to be used consistently as rules, guidelines or definitions, to ensure that materials, products, processes and services are fit for their purpose” (ISO, 2013). The International Standards should ensure that products and/or services are reliable, with good quality and consumer safe. There are also business standards used as strategic tools reducing cost by reducing errors and waste and increasing overall productivity. For energy management there is the ISO 50001:2011 as Energy management systems standard and the EN 16001:2009 Energy Management Systems Standard in use today. On 1st of July 2009 the EN 16001:2009 Energy Management Systems Standard was published and later, on 1st of October 2009, it got a status of a national (Slovenian) standard (SIST EN 16001). Companies have got hereby their first standard systematically covering energy efficiency in the aspects of strategy development, defining goals and actions as well as organizational structures. Certification, Accreditation and Labeling A company can get a certificate, with which it gets a certification, acknowledgement or confirmation for certain characteristics of a product, personal certification for being able to fulfil a task, etc. It is usually provided by an external audit or review. Accreditation is further a process of certification, whereas labelling refers to the display of certain information on a product. The certificate is a confirmation that the system of energy management in the organization works by the time it is being checked; the certificate itself does not bring any major advantages and privileges. Following the organizations policy regarding energy, reaching goals and other is a good example of energy efficiency in micro organizations. In Slovenia companies can get different acknowledgements, but usually there are the large ones who take the step. Some acknowledgements referring to environment, ecology and energy are listed in table 7 on page 29.. 29.

(30) One of the certificates in use today is the EMAS or ECO Management and audit scheme is designed to encourage the use of environmental management practice, communicate with the public and inform it about the results of continuous improvement and the effects of a company’s activities on the environment. It can be a good opportunity for promotion and marketing as it gives a positive image. Table 7: List of companies with environmental acknowledgements ACKNOWLEDGEMENT Cleaner production Ecoprofit Responsible behavior Environmentally friendly company Environmental product of the year International Environmental Partnership Environmentally friendly process Energy-efficient company Energy Efficient Project. ECO - Management and Audit Scheme (EMAS). NUMBER OF SUBJECTS 32 20 18 12 18 3 7 12 7. Certified according to ISO 14001:1996 Environmental Management Standard Certified according to ISO 14001:2004 Environmental Management Standard EU Environmental Award – European flower Recognition of Green Logistics Certificate according to EN 16001:2009 Energy Management Systems Standard Certified according to ISO 50001:2011 Energy Management Standard. 6. 263 496 8 2 4 4. Source: Chamber of Commerce and Industry for Slovenia The Slovenian Chamber of Commerce and Industry has a list of companies, mostly legal entities, which have already an environmental recognition and a recognition regarding energy consumption. As the Chamber of Commerce and Industry for Slovenia lists all the organizations in groups, differentiating them by the type of the environmental acknowledgement, we are presenting the acknowledgements and the number of organizations in table 7. Depending on the data from table 7 we can see that there are not many companies with energy certificates in Slovenia and as we will see in table 9, those certified to it are bigger companies. In the nearest past the companies, which got a certification regarding energy management practices, the ISO 50001:2011 are ACRONI d.d., GGE d.o.o., HTZ Velenje, I.P., d.o.o., SG Automotive d.o.o. ACRONI d.d. is besides ISO 50001:2011 certified also to EN 16001:2004. According to the list with environmental acknowledgements issued by the Chamber of Commerce and Industry for Slovenia the ECO - Management and Audit Scheme (EMAS) certificate have 6 companies; Luka Koper d.d., LEK d.d., Gorenje d.o.o., Gorenje d.d., Cinkarna Celje d.d. and Medium d.o.o.. In Slovenia there is a significant amount of companies certified according to the international standard ISO 140001:2004 whereas the standardization of the EN 16001:2009 and the newest. 30.

(31) of all, ISO 50001:2011 have up to now made just four Slovenian companies. Companies already registered to some other ISO standards as 9001, 14001, 27001 etc., will hopefully see an opportunity and make all the necessary improvements for getting the latest standardization regarding energy supply and consumption. 4.4. The Role of Energy Efficiency in Micro Organizations In Slovenia there are 71.207 registered micro organizations and further 89.739 registered natural entities; their total number is far larger than the number of the small, medium and large organizations together (table 6). These numbers illustrate well the importance of learning and implementing good energy management in practice it’s important to cover the majority of all companies and teach a line of employees about energy efficient practices they might apply also at home. Energy efficient practices lower the cost of energy on a long term basis and consequently the total energy bill of a company, if they are managed well. Energy efficiency is connected with cost savings and environmental recognition a company might gain; and we believe that small companies are willing to listen and learn how to become more efficient.. 31.

(32) 5. MANAGING ENERGY WITH THE HELP OF ENERGY MANAGEMENT SYSTEMS 5.1. From Environmental Management Systems to Energy Management Systems Development The public is becoming increasingly aware of the issue of sustainable development as we enjoy a life style full of technological breakthroughs and other developments, which made our lives easier and more comfortable. The need of an environmental legacy has grown in the past century and the standard-writing bodies got many concerns and requests for producing a standard for managing the environmental impacts of an organization. The first result to all the requests related to environmental management in businesses was, when the world renowned institution, British Standards Institute (BSI) in connection with others, developed and issued the BS 7750:1992, which is today told to be the world’s first environmental standard. Nevertheless, this was not the first national standard, as other similar national standards were in existence in various countries. After publishing the world-wide demand getting accreditation and a certificate to an international standard, began to grow. Later the ISO (the International Standards Organization) established a new technical committee to develop international standards in environmental management. The need for the standard to be applicable to manufacturing and services industries has risen, as it was fulfilling the needs of all sizes of businesses. The need to avoid trade barriers, as well as different approaches to legal requirements and their enforcement throughout the world, demanded a generic approach. Today, one of the world wide known and used standards is the ISO 14001:1996 (ISO 14001:2004) environmental standard. In Slovenia more than 400 companies are certified to this standard. It was first published in 1996 and later reviewed in 2004. Seeking all the advantages standardization can bring to a certain company it went further, as unwanted environmental problems emerged due to high energy consumption and high electricity prices that had their side effects in emissions production. As a result of well-managing energy costs and emissions, amounts of spent energy generated from non-renewable resources decreased and the idea of an energy management system and standard arose. Sustainable development meant managing its business well, environmentally friendly with low energy consumption what caused the development of a new world standard according specially to energy (energy management), the ISO 50001:2011 which was issued in June 2011. In Europe, energy standards were introduced and brought into use first in Denmark; Denmark is considered being a pioneer in the sense of issuing a national energy standard. Many other European countries followed as soon as 2003, a Swedish standard was launched, followed by an Irish standard in 2005 and a Spanish one in 2007. A high level of participation was required for the development of these standards as standards require the consent and consensus of all parties concerned. The response to the standards in certain countries following their release was very high. The success of national standards led to the formation of a working group of the European Committee for Standardization (CEN) in 2006 to address this topic. Supported by the European Commission, which sees the standardization of EnMS as an important step towards increasing energy efficiency in European industry, EN 16001:2009 was compiled within a short time period under the leadership of Sweden. On 10 September 2009 the EN 16001:2009 was introduced to the public at an event in Brussels. Even before the official release of the new. 32.

(33) European Energy Management Standard, the first companies conforming to this standard were certified to EN 16001:2009. In the meantime, many other countries outside of Europe developed similar standards. The standardization process has since been initiated at a global level. The International Standards Organization got a request from the United Nations Industrial Development Organization (UNIDO, Win the Energy Challenge with ISO 50001, pg. 13) to develop an international energy standard by the time the need to an effective response to climate change expanded. A project committee named ISO/PC 242 led by the United States (American National Standards Institute – ANSI) and Brazil (Associação Brasileira de Normas Técnicas – ABNT) was created with the task to carry out the work. ISO specifies that experts from 44 member countries participated on it and further other 14 countries experts observed their work. With the wide choice of including the experts of numerous countries the reflection was the ability of the experts to implement or to take into account their own energy standards guidelines (including the ones developed in China, Denmark, Ireland, Japan, Republic of Korea, Netherlands, Sweden, Thailand, the USA and the European Union, (ISO, 2011, 13). Table 8: Time-line of energy standards development 2000. 2001. 2003. 2005. 2007. 2009. 2011. USA ANSI/MSE 2000:2000. DENMARK DS 403:2001. SWEDEN SS 627750:2003. IRELAND I.S. 393:2005. SPAIN UNE 216301:2007. SOUTH AFRICA SANS 879:2009. INTERNATIONAL ISO 50001. SOUTH KOREA KSA 4000:2007. CHINA GB/T 23331:2009 EUROPE EN16001:2009. Source: Umwelt Bundes Amt for our environment. DIN EN 16001: Energy Management Systems in Practice. Systematic energy management is used worldwide as good energy management identifies where the energy saving potential lies. There are great advantages of having or following the standards main guidelines in business as exploiting such a potential reduces administrative costs and increases one’s own competitiveness. The EN 16001:2009 is marked as an important starting point for the formulation of ISO 50001:2011; every company that is certified to EN 16001:2009 thus has a good basis for future international requirements on the ISO 50001:2011.. 33.

References

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