Energy consumption

Energy consumption measures the energy an organisation uses during a defined period. Tracking it supports cost control, operational resilience and environmental improvement, especially when absolute use is paired with an activity-normalised measure of energy intensity.

When to use it

• Answer the key performance question: “To what extent are we reducing our energy consumption?”
• Assess this KPI within the Corporate social responsibility perspective.
• Plan data collection, formula use, reporting frequency, and data-source requirements for this KPI.
• Compare results against the targets, benchmarks, examples, or trend guidance available for this KPI.

Origins

Organisations began accounting for energy as industrial metering and national energy statistics developed. Fuel and electricity were initially monitored mainly as operating costs; supply shocks, environmental policy and climate commitments later made efficiency and source mix strategic concerns. Modern energy-management systems formalise a cycle of baselining, setting objectives, measuring results and continually improving performance. The KPI has no single inventor.

What it is

Perspective: Corporate social responsibility perspective.

Key performance question: To what extent are we reducing our energy consumption?

The measure totals purchased or otherwise consumed energy over a stated boundary and period. It may include electricity, gas, fuel, steam and self-generated energy, converted into compatible units where necessary.

Absolute consumption shows the organisation’s total demand. Energy intensity divides use by a relevant activity measure such as units produced, floor area, occupied rooms or service transactions. Both are needed: absolute use captures total impact, while intensity helps distinguish efficiency from changes in output.

A historical UK policy example required businesses consuming more than 6,000 megawatt hours a year to participate in a carbon-related reporting and trading scheme. Requirements change over time and by jurisdiction, so the current legal boundary must be verified separately from the management KPI.

How to use it

Measurement