ISO 50001: 5 Steps to a Successful Energy Management Program

How to create a durable competitive advantage through continuous energy improvement using the ISO 50001 standard

Energy efficiency is not a buzzword; it is a time-tested path to competitiveness. ISO 50001 (pronounced “ice-oh fifty thousand one”) provides a continuous improvement framework for establishing and maintaining an Energy Management System (EnMS). It outlines a structured methodology to help facilities optimize energy use and cut costs.

But it’s not just about costs. ISO 50001 has four major benefits:

• Cost savings: By rooting out waste, industrial facilities can significantly reduce operational expenses (OpEx), creating a sustained competitive advantage.
• Risk management: A robust energy management program mitigates the risks of fluctuating energy prices and regulatory pressures.
• Reputation: Compliance with international standards enhances marketability.
• Sustainability: ISO 50001 helps industries meet sustainability goals by reducing carbon emissions.

In industrial operations, energy efficiency and competitiveness go hand-in-hand.

ISO 50001: A System for Continuous Improvement in Energy

The International Organization for Standardization (ISO) outlines a systematic approach to energy management, including both managerial and technical aspects. ISO 50001:2018 is the latest internationally recognized protocol for developing organizational policies with respect to energy.

The ISO 50001 methodology is grounded in the PDCA cycle: Plan, Do, Check, Act.

• Plan: Establish an energy policy, define objectives, and identify energy uses and baselines.
• Do: Implement the plan by managing energy performance and setting action plans.
• Check: Monitor and measure processes against the energy policy and objectives.
• Act: Review and enhance energy management processes to achieve the desired results​​.

Embedded within this framework are five key steps to building a successful energy management program:

1. Appoint an Energy Team

Energy excellence doesn’t happen on its own. It requires a dedicated Energy Management Team composed of leadership, engineers, operators, and other key personnel. This team is responsible for implementing and sustaining the Energy Management System (EnMS).

A vital member of this group is the Energy Champion, the leader who ensures the certification process stays on track. This individual coordinates the team’s efforts, clarifies roles, and drives accountability. The team must assess current energy use, set objectives, and communicate progress across the organization.

Energy team best practices include:

• Clearly defining roles, such as identifying who is responsible for monitoring energy performance.
• Conducting regular team meetings to align on goals, review data, and identify improvement opportunities.
• Leveraging employee expertise to identify practical energy-saving opportunities.

2. Identify Significant Energy Users (SEUs)

The next step is to identify Significant Energy Users (SEUs)—systems, equipment, or processes that consume large amounts of energy or have substantial improvement potential. 

The SEU methodology makes it possible for companies to break down and understand energy management at large and complex facilities effectively.

SEUs vary by industry. For example:

• In cold storage, SEUs typically include refrigeration systems.
• In food production, process heating is often a key SEU.

Why SEUs matter: SEUs allow organizations to prioritize their efforts where the most significant impacts can be achieved. Teams should aim to identify the top 10 SEUs within their facilities and focus energy management actions on these areas.

To comply with ISO 50001, it’s essential to collect granular data. Submetering systems and establishing real-time energy monitoring tools help pinpoint energy intensity and usage trends. These insights enable better decision-making, such as scheduling energy-intensive tasks during off-peak hours to save costs.

3. Establish a Baseline

A reliable energy baseline is foundational to ISO 50001 compliance. The baseline reflects current energy consumption and performance, serving as a reference point for measuring improvements over time.

Creating an effective energy baseline involves:

• Gathering historic energy use data and normalizing it against variables such as production levels, weather conditions, or operating hours.
• Setting up submeters to monitor individual processes and equipment, ensuring data accuracy.
• Employing energy intensity metrics, such as energy consumption per unit of output, to contextualize performance.

Energy Performance Indicators (EnPIs) help track progress against the baseline. The most common EnPIs for industrial facilities include:

1. Energy consumption (e.g., kWh, kBTUs, or Therms)
2. Energy intensity (e.g., kWh/unit produced or kWh/ft^2)
3. Energy cost intensity (e.g., $/unit produced)
4. Carbon intensity (e.g., CO2e/unit produced)

A well-defined baseline enables teams to model the return on investment (ROI) of energy-saving initiatives, such as equipment upgrades or process changes.

4. Set Goals

Clear and actionable goals are critical to driving energy performance improvements. These goals should align with organizational priorities and leverage the insights gained from SEU analysis and baseline data.

Examples of effective energy goals include:

• Reducing energy intensity per unit by 10% over the next two years.
• Minimizing compressed air leakage to reduce operating costs by 15% within three years.
• Decreasing carbon emissions by 25% within five years.

ISO 50001 emphasizes the importance of setting SMART goals—Specific, Measurable, Achievable, Relevant, and Time-bound. Teams should document these goals in the Energy Management System and establish a plan to achieve them.

Energy management software plays a crucial role here. The right software should:

• Integrate all data needed to calculate the EnPIs selected above.
• Support the seamless rollup of EnPIs across disparate processes and facilities.
• Provide real-time insights to identify actionable opportunities.

5. Establish a Continuous Improvement Process

ISO 50001 is built on the principle of continuous improvement. Once goals are set, the organization must embed a culture of ongoing energy performance reviews to adapt to new challenges and opportunities.

Key actions for continuous improvement include:

• Regularly monitoring and analyzing energy performance data.
• Identifying deviations from expected results and implementing corrective actions.
• Reviewing and updating the Energy Management System to incorporate new technologies or processes.

Certification is an important milestone, but it is not the endpoint. Accredited auditors assess compliance during an on-site audit, evaluating the EnMS for effectiveness. Certification typically takes 3–6 months and must be renewed every three years. Organizations are encouraged to focus on continuous refinement beyond certification to maintain their competitive advantage.

Synergies with Other Standards (ISO 14001, ISO 9001, and more)

ISO 50001 overlaps with several other standards and programs, creating opportunities for broader organizational benefits:

• ISO 14001: Environmental management standards that help organizations address a wider range of sustainability goals.
• ISO 9001: Quality management standards that enhance operational excellence.
• Better Plants Program: A U.S. Department of Energy initiative that supports energy intensity reductions.
• ISO Net Zero Guidelines: A framework for achieving carbon neutrality.

Implementing ISO 50001 alongside these initiatives amplifies energy and sustainability benefits, positioning organizations as leaders in their industries.

ISO 50001 Readiness

Certification is not mandatory; organizations can benefit significantly from adopting the ISO 50001 methodology even without involving an independent auditor. By assembling a committed team and developing a process for continuous energy improvement, many self-driven organizations can save money and create a culture of Energy Intelligence™ with a very reasonable investment of time and money. 

How the Nsight Energy Management System Helps Organizations Meet ISO 50001 Standards

The Nsight® Energy Intensity Platform helps organizations meet ISO 50001 standards by providing robust tools for energy data collection, monitoring, and analysis in relation to production. It consolidates real-time and historical energy data into a centralized dashboard, enabling the establishment of energy baselines and the tracking of Energy Performance Indicators (EnPIs).

Through advanced analytics and AI, the platform identifies energy optimization opportunities and models the impact of energy-saving projects. It supports planning and implementation with project management tools and workflow automation while simplifying compliance through automated reporting and detailed documentation for audits.

Additionally, the platform fosters continuous improvement by enabling dynamic adjustments to efficient energy management system standards and practices based on real-time data trends, making it easier for organizations to achieve and sustain ISO 50001 certification.

Need help preparing for ISO 50001?

For more information on how the ISO 50001 methodology can transform your organization’s energy management, contact BusDev@ndustrial.io. Whether you’re looking to establish baselines, identify SEUs, or achieve certification, Ndustrial provides the tools and expertise to drive success.