In 2009, Ory Zik was in China, helping build a massive solar concentrator, a device with the potential to generate significant amounts of green energy. But then he started asking himself some questions.
It took energy to manufacture the steel components of the concentrator. China generates much of its energy by burning coal. How, Zik wondered, could he determine the net environmental effect the project would really have?
So he resigned from his position and started figuring out the answer.
“The biggest challenge humanity is facing is to get off fossil fuel,” said Zik, a serial innovator and entrepreneur. “The fundamental problem is that we don’t understand the numbers.”
Thus was born EnergyPoints, the Boston-based company he founded with the aim of harnessing the power of computer analytics and big data to help inform and improve business decisions about resource usage. And it might just be on the way to success. In the nearly three years since the company launched, EnergyPoints’s software platform has become popular with sustainability consultants and some of their biggest clients: approximately 50 Fortune 500 firms are using the tool in some form, Zik said.
The key to the company’s approach is the eponymous EnergyPoint, a single unit of measurement that allows direct comparison between electricity usage, waste, water consumption, and heating and cooling energy expenditures.
One EnergyPoint equates to the impact of using one gallon of gasoline. Zik chose this baseline because a gallon of gasoline – unlike a British Thermal Unit or a kilowatt-hour – is a unit understood by most people.
EnergyPoints software uses 1.8b conversion factors to translate other kinds of resource usage into this shared metric. The calculations take into account many elements to capture each resource’s total impact. Geography comes into play: Electricity generated in a region that has a high solar capacity might have fewer EnergyPoints than power that comes mainly from coal-burning plants, for example. For water usage, scarcity is a significant component of the calculation. A gallon of water in arid Las Vegas is likely to have a higher EnergyPoint value than the same amount in the rainy Northwest.
The software lets users enter their business’ usage data and then parse, filter and display the information in many different ways. Users can view cost and EnergyPoint usage across the whole enterprise or by location. Facilities can be compared by usage per square foot, revenue or headcount.
“EnergyPoints is a great way to be able to pull that information into a single portal and be able to identify that performance,” said Kreg Schmidt, a partner with Accenture Smart Building Solutions, which offers the software to clients as part of its services.
Even more important, however, are the system’s project planning features, Schmidt said. Users contemplating energy-saving projects can enter their plans into the system (or choose from existing project templates) to see cost and savings projections.
“It basically spits out the answer – what should I implement?” Schimdt said.
Once a project is chosen and started, users can track its progress on the software, comparing results to goals and to the expected status quo had no action been taken.
Consulting company SustainEdge offers EnergyPoints to its clients and uses the platform itself to determine how to target prospective customers, CEO Greg Stine said.
Because EnergyPoint calculations incorporate geographically specific data, SustainEdge can use that information to determine where businesses are most likely to benefit from improved energy efficiency, he said. In the US, the water and wind-rich northwest, for example, likely contains fewer prospects that the northeast, with its aging electricity infrastructure and high energy costs, he said.
“We’ll use that to focus on the most heavily energy-intense regions, because those are the companies that are going to be facing the most pressure, whether from their customers or regulators,” Stine said.
There is widespread agreement that corporate energy-efficiency initiatives, like those supported by EnergyPoints, have at least a theoretical potential to drive significant reductions in energy consumption. However, several factors may make it harder for this movement to live up to its promise, said Christopher Knittel, professor of energy economics at the Massachusetts Institute of Technology’s Sloan School of Management.
For example, energy-saving projects might have a hard time getting traction inside a company if incentives are not properly aligned – or if costs exceed the savings. A factory supervisor who receives a bonus based on production numbers is likely to resist a renovation that requires him to shut down operations for a few days, Knittel pointed out. And even successfully installed projects sometimes result in lower savings than anticipated, he added.
For Zik, however, the ongoing goal is to give corporations the numbers they need to make these decisions as effectively as possible and to grow a successful business of his own doing so. “We have a combination of a big idea and a very focused business,” Zik said.
This story originally ran on TheGuardian.com on December 12, 2013.