The management of energy and improving energy efficiency has long been important for industry and commerce. In the 1790s Boulton and Watt’s steam engines produced competitive advantage because they were more fuel efficient – and indeed they charged a share of the fuel cost savings in a way similar to today’s energy performance contracts. In World War 2 fuel efficiency became vital to the war effort and many states in the world were set up to provide advice to industry on energy saving measures as fuel shortages continued in the post-war years. Energy management as a separate discipline, however, began to evolve after the first oil crisis of 1973 and really came into effect after the second oil crisis of 1979 when real energy prices rose dramatically.
With the first assessment report of the Intergovernmental Panel on Climate Change (IPCC) published in 1990, the following reports of the IPCC, the “Earth Summit” in Rio in 1992, and the adoption of the Kyoto protocol in 1997, climate change and thus energy issues came strong on the global agenda leading to a more favourable atmosphere for ambitious goals. More and more policy makers came to the conclusion that energy and climate challenges were of such a scale that solutions were not to be found on the nation state level.
After more than forty years it seems appropriate to look back at the evolution of modern energy management and energy efficiency. In looking back and current situation five distinct phases can be identified. Phase 1 called “Energy Conservation Focus”, between 1973 and 1981, was characterised by the “save it” mentality and a crisis response to sudden increases in energy prices and problems with energy supplies caused by the oil shocks, a result of geopolitical drivers. Energy conservation was the usual description of the activity. Phase 2 called “Energy Management Focus”, between 1981 and 1993, monitoring and targeting (M&T) began to be used much more widely. This was aided by the introduction of personal computers (then called “micro-computers”) in the early 1980s and the beginnings of the PC or IT as we know it today. Phase 3 called “Energy Procurement Focus”, between 1993 and 2000, where energy management as a discipline entered a decline which came about as a result of two factors, the reduction in real prices bought about by privatisation of the utilities, and general corporate down sizing. Phase 4 called “Carbon Reduction Focus”, between 2000 and 2010, where the climate change agenda became a major focus for individuals and organizations around the world. In phase 5 called “Energy Efficiency Focus”, since 2010, policy interest in energy efficiency started to grow globally. There was increasing recognition of the role that energy efficiency could play in meeting climate targets as well as the scale of the economic opportunity efficiency presents.