THE EVOLUTION OF ENERGY MANAGEMENT: ENERGY ADVISORY SERVICES
Technology has changed the way companies can monitor, control and conserve energy. While energy management is one of the
Technology has changed the way companies can monitor, control and conserve energy. While energy management is one of the
Technology has changed the way companies can monitor, control and conserve energy. While energy management is one of the most cost effective ways to improve a company’s bottom line, many organizations are either unaware of what steps to take to take control of their energy consumption, or unable to enact new processes and procedures due to budgetary concerns.
So how do you go about identifying, and solving these issues without wasting more time and money on them? The first step is to recognize where your company is vulnerable, and what cost efficient solutions are available to you to correct or improve these issues.
In the 1980’s, energy management meant paying your bill on time, and remembering to turn off the lights when you leave the room. In the 1990’s, energy deregulation ushered in a new way for businesses to affect their energy budget. For the first time, commercial and industrial customers (C&I) could shop for the price they would pay for each unit of energy they consumed. The advent of the internet started a boom of rudimentary ways to monitor how much energy everything in your building was using, however they provided no solutions to help you on how to correct or prevent waste. Now in the new millennium, technology has helped evolve programs and projects so the mid-sized C&I customer could now have the transparency and visibility that only the largest corporations have enjoyed.
Gone are the days where commercial customers were solely focused on savings. Reducing your energy cost is always important. However, many companies are unaware of how many ways they can affect the bottom line of their energy budget. If your organization does not have a professional energy manager on staff, you probably have challenges that you are not even aware of.
So, that brings us to today. 75% – 95% of large commercial energy users utilize the expertise of an energy manager, outside consultant, or third party supplier to help with their energy management. Of course, large energy users usually have the resources to have this done for them. So, what is the solution for everyone else who doesn’t have a stock symbol on the NYMEX?
The answer may surprise you.
There are a handful of elite energy consulting firms that have built a network of suppliers, vendors, contractors and technologies, that enable them to provide services to mid-sized commercial customers, without any out of pocket expense. Now, this doesn’t mean they will retrofit your building with new led lights for free. What it does mean is that they can provide you education on which programs, projects and vendors will be the most cost effective way for you to handle your energy needs. These companies take an unbiased approach to finding these solutions, because they are compensated equally from the solution provider you choose. This takes the haggling, and endless hours of research off your plate, when you have a knowledgeable and reputable energy consultant in your corner. Your consultant can handle the vetting, organizing, communicating, and compiling of the different offers available to you. This allows you to stay focused on your day to day operations, and simply make your decision once you have all the information.
Source: DNV GL
DNV GL polled end users of electricity last year to discover their priorities when making energy choices. As you can see above, there are many different reasons that customers are utilizing energy advisory services. Energy price is the primary objective for only one in five organizations. Today, companies understand that consumer education on available options, coupled with a consultative focus on risk management is every bit as important as price per unit. After all, what good is it to reduce your energy cost by 15% if you are wasting 20% of the energy you are consuming?
This dilemma is central in the process for customers to achieve availability, sustainability, and profitability. Quality control is not just making sure the power is not running when it is not needed, but more so that you are using energy efficiently, and that you are out in front of any potentially costly repairs and or replacement of failing and inefficient machinery and HVAC units.
The good news is that now, a quality energy consultant, armed with your utility data, can identify, analyze and manage your companies risks, even before they occur. This is made possible through technology, and an energy consultant that is focused on long term energy management.
We are going to focus on a few of the ways businesses can affect their energy budget, by using an energy consultant, instead of hiring an expensive “specialist”, or chewing up too much of your valuable bandwidth to handle these challenges head on.
What Can an Energy Consultant Provide Your Organization?
Energy Strategy: The first step to taking control of your energy is to build out a comprehensive strategy. Using historical utility data, along with reviewing your companies processes and procedures, your consultant can determine a lot about your energy consumption. This will uncover what types of rate structure and service class would be the most efficient and cost effective plan for how you use energy. The right consultant will try and balance your desire for short term savings, with your need to manage risk long term. Once your consultant determines your organizational goals and objectives, they should be able to make recommendations based on energy market data, current utility tariffs, and data driven projections to find the proper blend for your individual energy needs.
Procurement: Your energy consultant will identify if you are in an area that allows you to make decisions on who you buy your energy from, and which company would be the best fit for yours. They can educate you on what is transpiring on the energy landscape, and provide you data to back up their recommendations. Your consultant will also be able to advise you on exactly when to execute an energy buy. When it comes to buying energy, timing is everything. Your consultant will also be able to negotiate the language you need in an energy agreement to minimize risk based on how you operate your business.
Now that you have been advised on which type of product you should be on, who you should buy from, and when you should purchase, it is a safe bet that you can decrease your current supply cost by anywhere from 15% to 25%. This will be a tremendous help, but it is not necessarily the end of your process. The next step is to determine what the next step is. This is where most energy consultants fall short. Many do not have the expertise, or even a working knowledge of additional ways to provide you guidance on what else you can do to manage your energy.
A quality energy consultant will also be able to provide you with:
Curtailment Solutions: Most organizations are unaware of demand response programs that are available to them that will provide electric grid operators the ability to better manage their energy grid, while providing substantial financial incentives to commercial customers for reducing, or shifting their electric usage during peak times. In most cases, companies are incentivized large amounts of money just to be on standby, when in fact there is rarely an event that the customer is called on to reduce consumption.
Energy Efficiency: This type of solution comes in many different forms. Many companies that try and “go it alone”, find out after the fact that the plan they came up with seemed like the right one at the time, only to discover that it either didn’t move the needle that much, or didn’t address the real energy issue they were facing. Your consultant can explain the monetary impacts you could expect from a lighting retrofit. They can provide you with solutions that will help you with benchmarking equipment, power factor correction, and preventative maintenance. With so many choices, your organization will be best served by utilizing a professional to vet your different options, and obtaining quotes to find the best fit.
Renewable Options: If you are interested in solar, wind, or geothermal energy, a consultant should have the resources to help you decide which will be most efficient, have the quickest return on investment, and what rebates and incentives you qualify for to minimize cost. In many cases, a consultant will be able to find a solution that requires no out of pocket expense, and make you cash positive almost immediately.
Onsite Generation: Many facilities can benefit from onsite generation. Whether your interest is simply reliability, cost effectiveness, or to participate in a curtailment solution, your consultant can bring these options to the table. A combined heat and power system can generate electricity as well as thermal energy in a single integrated system. Energy storage units can allow you to participate in wholesale energy markets by charging batteries when prices are low, and discharging when prices are higher, which will directly affect your cost per unit. There are limitless solutions for any company’s needs.
Energy Intelligence: Have you ever wondered how much energy it costs you to make one of your widgets? Have you been paralyzed by lost man-hours or production time due to a motor failing or AC unit faltering? Energy Management software can help you manage your energy, and even your employees more effectively. Basic energy analytics can help your organization have an increased awareness, and the data to back up how to optimize your machinery, systems, and workflow so you get the most you can out of every energy dollar spent. By choosing the right platform, your return on investment can be almost instantaneous. The wrong one can provide you little insight, without a solution to the issue. Utilizing a quality consultant, can provide you with a well thought out plan that will accomplish exactly what your business needs to increase your operational efficiency.
So now that you can see that there are many layers to effective energy management, how do you decide which ones are right for your organization? Each service and product listed above are not mutually exclusive, but a piece to a bigger pie. For some companies, it would be prudent for them to explore each of these. For others, they will only need one or two. Every company uses energy differently. Every organization has different directives and risk tolerances. Having an on-call energy manager to answer questions, vet opportunities and make recommendations help remove the trepidation of exploring these options.
Whether you are a family owned lumber company, or a national conglomerate, there is an energy strategy that will find the right blend of products and services that balance your company’s goals and objectives, while managing your energy cost. Remember, the two largest expenses in most businesses are people, and energy. That is true of a manufacturing plant, as well as retail store. Through technology, all types of businesses can achieve efficiency, and quality, without disrupting their day to day operations. The biggest hurdle is knowing where to get started.
Technology drives the way we live, work and play. It has changed the way we learn and the way we communicate. (remember when doctors were the only ones with cell phones) The times have changed and the business community has changed with it. Sophistication doesn’t need to mean complication. You simply need to find the proper blend.
If your organization has not taken the steps to create an effective energy management strategy, or do not have on staff someone who can implement this plan, now is the time to open that door. You cannot choose with utility company provides you your energy services. Your utility company has a monopoly on providing you delivery service. You can choose to take many different approaches to educating your organization on how you use energy, which in turn will help you control, and reduce your overall spend.
To find out more on how you can put a team of energy professionals to work on your organizations energy needs, or to start on a free energy strategy, contact us today.
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