Executive Success: Eye for detail saving millions

Jeremy Allen has global ambitions for Energy Solution Providers. Photo / Chris Loufte

Former flyer's company takes guesswork out of tackling energy costs.

Jeremy Allen began his career winging into remote airfields in the Canadian wilderness. Years later, after a move into the energy business, he was startled to find many New Zealand companies were flying blind.

That was the catalyst for the creation of Energy Solution Providers - ESP - nearly 15 years ago.

ESP specialises in smart metering and energy audits aimed at cutting costs and energy waste for corporate customers, and Allen says it is nearly impossible to get a handle on where improvements can be made if the only clue to energy use comes from a monthly power bill.

"I was appalled with the lack of information to be able to do anything with it, especially from a flying background where you have all these gauges to be able to tell you exactly what's going on in the aircraft and you're able to cross-reference everything that is going on."

As a pilot, Allen says you're always looking for ways to make the flight more efficient and reduce fuel consumption.

The Kiwi-Canadian, who grew up between New Zealand's Far North and a family farm in Canada's grain belt, spent several years flying freight and passengers into First Nations communities in far-flung corners of Canada.

"In that environment I have all the information I could possibly imagine to do something with." Contrast that with the dearth of data he was able to uncover from his corporate customers.

"You've got 12 bits of information that you're trying to manage a multi-million dollar account with."

He says there would be a bill that told him how much energy individual sites were consuming, but didn't show when, where or what was using the power.

"So I thought this is just daft." Allen went out and talked to various retailers about diving deeper into the data by getting information that split out what was being used by computers, lighting, heating and cooling, refrigeration units and the like.

"They just looked at me and said 'you're out of your mind because our systems are designed to handle one value, once a month'."

ASB was the springboard for Allen, becoming a cornerstone client when he switched from managing major clients for Mighty River Power's retail arm, Mercury, to establishing ESP in response to clients who wanted independent advice on knocking back energy costs.

While he'd helped negotiate some sharper deals on energy costs, ASB's overall energy consumption had progressively crept up since Allen had been working with it.

"We could come up with all kinds of reasons as to why it was going up - they were getting bigger, they were working longer hours, they had more sites - there were all kinds of reasons we could legitimise the increase in usage but the reality was, between 2005 and 2008 their usage had increased by 28 per cent."

Boosted by support from the Energy Efficiency and Conservation Authority in 2008, Allen calculated that it would be possible to cut energy costs by 19 per cent per square metre with proper metering data and management.

Data from smart meters identified energy leaks - from air conditioning running after hours to lights left on when not needed - and through progressive fine tuning energy savings were made.

"Lo and behold, in six months' time we had a 19 per cent savings and now we're maintaining a 28 per cent reduction against that 2008 baseline.

"So $8.5 million in savings later it's been a huge success." That success has opened doors for ESP, with other major clients including Air New Zealand, Auckland Council, Foodstuffs, McDonald's, Bridgestone and several government ministries.

The company's 3100 metering points have helped save more than $16 million in energy costs.

"You don't necessarily need to be a massive, great big corporation to be able to save significant percentages," says Allen. "You can be any size, you just need good data.

"Because the interesting thing is, if you have a water leak everyone can see a water leak - a puddle has been created, there's a broken pipe or whatever - but you don't see that with electricity.

"There's no obvious puddle being created by waste energy."

Whereas ESP's competitors focus on selling meters, Allen says the data is at the heart of energy savings and is treated like a precious commodity.

He says it's just good business acumen - without data, you're relying on guesswork.

"Guesswork in any kind of business decision-making is never usually a good thing."

Allen has global ambitions for his business, selling a stake in the firm several years ago and bringing in external directors and an experienced chief executive to drive the next stage in the company's growth.

"I knew with having an entrepreneurial spirit you've got to realise where your limitations are." While Allen might not be captaining ESP he still has an eye on the gauges, taking on responsibility for the technical side of metering projects.