Home Topics What is Energy Management? What is energy management?
Explore IBM's energy management solution Subscribe to Sustainability Updates
Illustration showing how energy management helps to monitor, control and optimize energy consumption
What is energy management?

Energy management is the proactive and systematic monitoring, control, and optimization of an organization’s energy consumption to conserve use and decrease energy costs.

Energy management includes minor actions such as monitoring monthly energy bills and upgrading to energy-saving light bulbs. It can mean more extensive improvements like adding insulation, installing a reflective roof covering or improving HVAC (heating and cooling) equipment to optimize energy performance.

Energy management also includes more elaborate activities, such as creating financial projections for commissioning renewable energy services and making other improvements for clean energy consumption and reduced energy costs in coming years.

More sophisticated energy management programs take advantage of technology. For instance, utility tracking software predicts future energy usage and plans energy budgets. Which help a company’s strategic decision makers ensure its energy management strategy correlates with its objectives and financial planning. Enterprise management software uses IoT, advanced connectivity and big data, allowing a corporation to take advantage of energy data analytics for better facility management, and helps with energy consumption and energy management challenges.

Delve into our exclusive guide to the EU's CSRD

With ESG disclosures starting as early as 2025 for some companies, make sure that you're prepared with our guide.

Related content

Register for the ebook on GHG emissions accounting

Why energy management programs are important

Around the globe, there is a great need to save energy, which impacts prices, emissions targets, and legislation that affects us all. Not only can energy management help reduce the carbon emissions that contribute to global warming, it also helps reduce our dependence on increasingly limited fossil fuels.

According to energystar.gov (link resides outside of IBM), energy use is a US commercial office building’s single largest operating expense. It represents about a third of an enterprise’s typical operating budget and accounts for almost 20% of the nation’s annual greenhouse gas emissions. Energy StarÒ says office buildings waste up to one-third of the energy they consume.

Energy management is even more important in Europe, where the energy supply (link resides outside of IBM) is especially vulnerable to cyberattacks. This is because, on average, EU corporations invest 41% less on information security than American companies. Therefore, European companies need more initiatives that implement energy security solutions and help them safeguard data, access, and networks.


How corporations benefit from energy management programs

In addition to helping mitigate global problems that result from carbon emissions, energy management programs also bring benefits to corporations.

Having energy management software in place helps control a corporation’s budget and reduce the risk that is associated with energy price increases that can impact a business’s ability to operate. Tracking utility costs and energy efficiency allows corporations to budget more efficiently and gain better insight into overall operational costs. According to Energy Star, decreasing energy use by 10% can lead to a 1.5% increase in net operating income.

Energy monitoring and management not only bring cost savings to a company’s bottom line through decreased usage and consumption but can also mean reduced reliance on sometimes volatile supply chains. Energy management programs can also help companies lower costs through competitive procurement.

Energy management and ESG

Having a strong environmental, social and governance (ESG) foundation helps companies save energy, increase transparency and work toward better sustainability goals.

Energy management solutions that use a single system of record to reduce energy use, cost, time, and the burden of reporting allow clients to manage the impact of environmental risks. While also, identifying efficiency opportunities and assess sustainability risks, thus focusing on ESG strategic outcomes.

Besides saving energy costs and lowering carbon emissions, reducing your company’s carbon footprint also shows the company’s commitment to the environment, which promotes an image of greater sustainability and advocating for green energy. Reducing greenhouse gas emissions leads to having, and being recognized for, greater corporate social responsibility.

A strategic approach to consulting with sustainability experts on your sustainability strategy and roadmap leads to the most effective energy and ESG management. In addition to other benefits, consulting on efforts that can include decarbonization and transition to renewables can also help your business attract new and often younger employees who value the optimization of sustainable energy and renewable energy use and take corporate social responsibility seriously.

Intelligent asset management creates energy efficiency for buildings, supply chain and manufacturing

Intelligent asset management can create energy efficiency for several industry use cases. Some of these include:

  • Buildings: Managing energy in your offices, factories and other facilities helps save energy and reduce carbon output in various ways. Intelligent asset management uses technology such as AI, IoT, and analytics to help you inspect and monitor a building’s efficiency, calculate potential impacts to the grid, anticipate failure, and better plan maintenance procedures. Companies that use this technology can increase their productivity and make their facilities more energy-efficient, reducing emissions, mitigating climate risk and extending asset lifecycles. They gain operational insights into clean energy sources, efficient waste management and decarbonization.
  • Sustainable supply chains: Using AI and blockchain, intelligent supply chain automation can help reduce the impact that current supply chain weaknesses are having on your business. A more resilient, sustainable supply chain allows clients to act quickly and confidently and mitigate disruptions. Measuring Scope 3 emissions—indirect emissions that are not caused by a company directly but occurring within its supply chain, from warehousing, transportation and waste operations, among other areas—gives companies a competitive advantage in terms of sustainability. While Scope 3 emissions are out of a company’s direct control, measuring them identifies emission problems in their supply chain and allows them to perhaps affect change. Compared to Scope 1 (direct emissions) and Scope 2 (indirect), Scope 3 emissions generally represent the highest levels of greenhouse gases.
  • Manufacturing: Manufacturing facilities burn numerous fossil fuels and are some of the largest energy consumers. Creating an energy management program to sustainably reduce energy use for manufacturing includes collecting and analyzing energy-efficiency data (from various meters, databases and multiple plant sites) and creating a project management plan. A more IT-based factory floor that uses the Industrial Internet of Things (IIoT) and analytics means better predictive maintenance and quality, which leads to smarter manufacturing. Case studies show that changing energy consumption patterns in manufacturing requires management personnel that are committed to reducing energy use because it requires change, infrastructure investment and possibly retraining.
The challenges of energy management

Energy management also comes with its own set of challenges. Some of these include:

  • Not enough data integrity, analysis, or clear benchmarks: Traditional building management systems and meters that collect data through manual energy audits don’t provide data that lets you see wasteful energy usage patterns. Using an energy management system makes it easier and more convenient to access and use more data about energy consumption. A strong energy management system automatically generates regular, reliable, and customized energy reports.
  • Faulty systems, incorrect settings, and poorly maintained equipment: Scheduled checks that are conducted too infrequently mean wasted time and money. Equipment that breaks down unexpectedly thrusts you into reactive maintenance, which can create challenges and unexpected expenses. In contrast, intelligent energy systems alert you to equipment breakdown and energy wastage immediately. They provide real-time information on energy consumption, and you can set energy KPIs for consistent results. Having a proactive maintenance strategy, with routine and preventive maintenance schedules, means that equipment is serviced regularly and has longer lifespans.
  • Failure to plan for energy upgrades: In-depth energy data lets you make smart decisions about energy retrofits or upgrade initiatives that bring cost savings and a good ROI.
IBM Solutions
IBM Maximo® Application Suite

Save energy and decarbonize with intelligent asset management.

Explore IBM Maximo
IBM Turbonomic Application Resource Management™

Reduce energy and carbon emissions with efficient data centers and more sustainable, secure IT operations.

Learn about IBM Turbonomic
IBM Envizi ESG Suite

Accelerate sustainability by managing all your environmental, social, and governance (ESG) indicators in a single platform.

Explore IBM Envizi
IBM TRIRIGA® Application Suite

Optimize your real estate and facilities management operations for higher efficiency and sustainability.

Learn about IBM TRIRIGA
Sustainability solutions

Boost your sustainability journey and energy management efficiency by charting a sustainable and profitable path forward with open, AI-powered solutions and platforms plus deep industry expertise from IBM.

Explore sustainability solutions
Resources Are Your Data Centers Keeping You From Sustainability?

Automating application resource management should be your first step in the sustainability journey.

Embrace Green IT

Learn how to minimize energy use and embed responsible computing across your IT environment.

IT sustainability beyond the data center

Enterprises that want to reduce their carbon footprint should expand their sustainability goals to include green IT and responsible computing.

Take the next step

Unlock the full potential of your enterprise assets with IBM Maximo Application Suite by unifying maintenance, inspection and reliability systems into one platform. It’s an integrated cloud-based solution that harnesses the power of AI, IoT and advanced analytics to maximize asset performance, extend asset lifecycles, minimize operational costs and reduce downtime.

Explore Maximo Book a live demo