Case Study

The energy challengeHow Hitachi bends the energy curve

Hitachi Consulting helps companies by providing an innovative and results-oriented approach to reducing energy expenses through Energy and Environmental Efficiency solutions.

Introduction Increasing energy rates are decreasing corporate profits; the International Energy Outlook 20161 predicts that global energy consumption will grow by 48 percent between now and 2040. This immense increase and constrained supply will impact energy reliability and price rate volatility. In response to these challenges, C-level executives are treating energy as an important aspect of business that impacts bottom-line results.

Like many global companies with a significant facilities footprint, our case study organization forecasted a significant and exponential increase in energy expense, which impacted its bottom-line profitability. At the same time, energy rate volatility and anticipated increases in energy consumption were forcing this global organization to focus on controlling the energy expense line item. The company worked to honor the commitments that it was making towards environmental sustainability.

1 International Energy Outlook 2016 was prepared

by the U.S. Energy Information Administration, the statistical and analytical agency within the U.S. Department of Energy.

Challenge: Energy expense growth outpaces the organization’s ability to address it The organization had implemented a number of energy initiatives and had succeeded in holding energy expenses flat over several years. However, it had become more and more difficult to identify new projects, of the appropriate scale, with an attractive internal rate of return, that could be addressed. Energy expense growth was beginning to outpace the organization’s ability to address it. Without near-term action, the organization would see upwards of 20 percent increase in a billion dollar energy expense line item.

Businesses across the international land-scape are faced with rising energy rates, climbing consumption, and increased local government regulations. Coupled with the climate change agenda, these factors are driving corporations to take a harder look at their corporate energy strategy. Companies are investing in energy reduction initiatives to keep energy costs flat and consumption low, but are often faced with several challenges. First, finding these energy reduction opportunities can be difficult.

Many times, it takes the combination of hundreds of energy projects to bend the energy curve. Many companies also have capital constraints, aggressive rates of return for project funding, and a lack of sufficient internal expertise, experience and resources to manage projects of this size and scope. Hitachi Consulting provides companies with an

Challenges n Immense energy consumption

growth combined with constrained supply is impacting energy reliability and price rate volatility

n Finding energy reduction opportunities is difficult

n Many companies have capital constraints and aggressive rates of return for project funding, and they lack sufficient internal expertise, experience and resources to manage projects of this size and scope

Solution n Reduce energy expenses with no

upfront capital investments

n Pair cutting-edge technologies with an end-to-end service model

n Turn energy savings into a commodity that can be purchased through existing utility budgets

Benefits n Measurable and sustainable

energy savings

n Elimination of barriers to performance improvement

n Improvements to environmental sustainability

n Innovative and results-oriented approach allows companies to successfully bend the energy curve

Hitachi helps businesses achieve

its energy-saving goals.

innovative and results-oriented approach that allows reductions in energy expense with no upfront capital investment.

Our solution Hitachi was instrumental to the success of this client’s energy program. Our team collaborated with the organization and the greater Hitachi companies to identify, fund and deliver on energy initiatives that would have been unachievable with conventional funding. Our experienced professionals were able to supplement the organization’s existing resources and fill gaps in expertise and scale in order to allow for central management of these initiatives. Initiatives implemented over a five-year period are yielding hundreds of millions of dollars in savings, and today this company is ranked as one of the top corporate citizens for environmental sustainability. With a value-based model, the organization is about to manage its investment expenditure according to the savings accrued. clients to evaluate the existing energy

performance of their portfolios, identifying opportunities and conducting financial analysis. Armed with a comprehensive understanding of their actual energy performance portfolios, engineers identify specific energy opportunities where investments can yield considerable results.

The team then identifies technologies that can be retrofitted across the company’s entire real estate portfolio, and designs projects around each initiative. These may include Hitachi products and solutions as well as energy savings in areas such as:

n Full-facility lighting optimization, including retrofits, high bays, exterior and smart sensor controls

n Large tonnage heating, ventilation and air conditioning (HVAC) system remodel and optimization, covering chiller plant (air and water chilled), motor, fan coils and pumps

Hitachi provides an innovative and results-oriented approach that allows companies to reduce energy expenses with no upfront capital investments. By bringing together the breadth of Hitachi, Ltd., capabilities and solutions, these solutions pair cutting-edge technologies with an end-to-end service model that allows companies to successfully bend the energy curve.

Our approach cuts through the complexity and offers measurable and sustainable energy savings. Designed in partnership with our clients, the strategy and services are geared entirely toward eliminating barriers to performance improvement. Our approach is not about selling equipment or making bets on energy futures; it is focused on turning energy savings into a commodity that our clients can buy through their existing utility budgets.

When embarking on an energy assignment, the project begins with the identification of energy performance measures. Consultants work with

Our impact n 100 million: number of square feet

improved across 3,300 facilities

n US$217 million: total cumulative savings for our clients in past five years

n 1B kWh: total energy savings delivered at a major telecom provider through project management of energy conservation programs. These savings are equivalent to:

– 703,000 metric tons of CO2 emission reduction

– Removal of more than 148,000 cars from the road each year

– The amount of carbon sequestered from 18.2 million tree seedlings grown for 10 years

© 2017 Hitachi Consulting Corporation. All rights reserved. www.hitachiconsulting.com

n Small-unit HVAC optimization and replacement, including variable frequency drive (VFD), variable refrigerant flow (VRF), wall package units and spot cooling units.

n Standalone cooling units, including com-puter room air conditioner (CRAC) and computer room air handler (CRAH).

Benefits: Solution exceeds business goals, optimizes resource consumption and controls costsThe reception at the client has been phenomenal, and the creative methods of achieving cost reductions have generated much interest within and external to the client. The organization has achieved results beyond its original goals, plus generated improvements to environmental sustainability without upfront investment.

About Hitachi ConsultingHitachi Consulting is the global solutions and professional services organization within Hitachi Ltd., a global innovation leader in industrial and information technology solutions and an early pioneer of the Internet of Things. Hitachi Consulting is a business integrator for the IoT era and a catalyst for digital transformation. Using our deep domain knowledge, we strategically collaborate with our clients to help them innovate faster, maximize operational efficiency and realize measurable, sustainable business and societal value. As a consulting-led solutions company, we can help you leverage data as a strategic asset to drive competitive differentiation, customer loyalty and growth. To learn more, visit www.hitachiconsulting.com.

The team provides a value-based sevice model through which service fees are based on savings achieved. Through careful monitoring and metering, both our client and team tracks avoided kilowatt hours, giving a real-time understanding of the actual energy saved. Clients can then achieve cost savings by paying for these avoided kilowatt hours out of their existing utility budgets.

ConclusionHitachi leverages decades of deep industry experience to provide practical business strategies and technology solutions. Our collaborative, pragmatic approach enables superior operational performance, positive business change, and consistent, measurable results. With the Energy and Environmental Efficiency solutions of Hitachi Consulting, we continue to find ways to help our clients eliminate barriers to their success.

Our clients speakHere’s what large telecommunications companies are saying about Hitachi solutions:

“They were truly experts in their subject matter, they knew how to adapt to our style and needs, they kept pushing forward to make the program a success, and they were a pleasure to work with, even in difficult circumstances.”

“They are very hands-on and practical, with clear, distinct outcomes. I didn’t expect that level of support.”

“Outstanding! … you really knocked it out of the park … more than I was expecting …”

“They work in a very common-sense way. They give you things you can do right now to get results.”