How to develop a comprehensive energy management strategy
The changing energy landscape
Whether your enterprise has one already or not, a comprehensive energy strategy is critical to success in the new energy economy. Once simply a proactive measure to enhance an organization’s reputation as forward-facing, it has now become a critical lever to make your organization more competitive, improve brand reputation, and increase the bottom line.
Despite the large impact energy has on strategic corporate initiatives, many enterprises lack energy management expertise and may have a tendency to simply toss money at the problem as an attempt at a solution. Going forward, this style of energy management won’t cut it. In the increasingly complex energy landscape, enterprise energy leaders should develop a comprehensive approach that incorporates flexible, software driven technology solutions that can adapt to changing conditions.
There are 3 key categories of energy management to ensure are incorporated into your strategy:
- Enhance building energy efficiency
- Procure renewable assets
- Make your energy infrastructure more adaptive and resilient
Leaving any one of these areas unaddressed keeps your enterprise at risk.
1. Enhance building energy efficiency
For the first decade of this century, enterprises were able to appease stakeholders in and outside the company with energy efficiency measures alone. Much of the energy savings to be had—prior to renewables becoming cost-competitive—came from LED-changeouts, smarter HVAC scheduling, and machine upgrades. These days, site engineers propose those upgrades as a matter of routine. The difference today isn’t that leading enterprises forego energy efficiency measures, it’s that they’re table stakes for a much more comprehensive set of energy management practices. They are still a key component of an enterprise energy strategy.
Here are some of the most effective energy efficiency tactics to include in your strategy:
- Getting an energy audit to assess overall energy use and identify ways to reduce consumption
- Upgrading to higher efficiency lighting, HVAC and machines
- Setting guidelines for behavior change around high energy consuming systems, e.g. Turning off lights overnight
- Installing a Building Automation System to automate efficiency
2. Procure renewable assets
Although they were by no means the first, Apple and Google won tremendous acclaim for their early adoption of renewables. In particular, Google’s financing of solar, wind, and biogas operations, beginning at their data centers and extending to their whole operations, made them the world’s largest purchaser of renewable energy, and a pathbreaker for the rest.
Nearly overlooked by the press, enterprises like The North Face and Cisco have been purchasing renewables since as early as 2008. It began with wind turbines at energy-intensive sites, then rooftop solar on buildings with large footprints. Utilities quickly caught on, and began developing Power Purchase Agreements (PPAs) with enterprises, enabling utilities to expand their renewable infrastructure at minimal risk and enterprises to “go green” without the upfront cost. Leaders like Nike and Walmart have embraced this model, which allowed the former to go 100% renewably powered by 2018, the latter by 2020.
Options for renewable procurement strategies include:
- Installing solar or wind generation at your facilities. In most states in the U.S., this energy can be consumed directly or sold back to the utility through a Net Energy Metering (NEM) policy.
- Procure renewables through a Power Purchase Agreement (PPA), which produces long-term cost savings at a fixed price of a long contract term, with no upfront capital or maintenance costs.
- Contracting directly with a renewable resource developer to build a solar or wind farm offsite, explicitly for your company.
- Purchase Renewable Energy Credits (RECs) to offset your energy consumption. Pay renewable electricity providers for the right to claim the provider’s electricity towards your clean energy goals.
3. Make your energy infrastructure more adaptive and resilient
Adaptive energy infrastructure devices give enterprises the flexibility to buy, store or generate energy at the most optimal times. They’re operated by software control centers flexible enough to adjust to deliver the most value at any given time, and this adaptation is the key to their value. During their typical 20-year lifetime, renewable asset utility rates will typically change 5 to 8 times impacting their value; but with adaptive infrastructures these assets are future-proof.
Adaptive energy infrastructure can deliver backup power during a grid outage or storm. Enterprises have realized the need to keep operations running during power outages and improve business resiliency and mitigate risk. Even a five-minute outage puts strain on equipment, spoils products mid-process, and kills worker productivity, disrupting operations and putting you in the red for the day. With power interruptions becoming far more frequent, backup power has become a necessary part of an adaptive energy infrastructure. Enterprises need to keep operations running during outages, since even short-term issues cause major disruptions to productivity.
Here are a few examples of adaptive energy infrastructure strategies:
- Pairing onsite and offsite solar projects with energy storage to future-proof and increase the value of solar assets
- Deploying an intelligent storage solution to participate in demand response and capture value from wholesale energy markets
- Procuring a clean backup power solution, such as energy storage, or developing a full microgrid solution to protect against power outages and improve resilience
Adaptive energy infrastructure presents the biggest opportunity for improvement
The electricity sector is undergoing major changes resulting from a confluence of factors such as increasing frequency of power outages and the global transition away from fossil fuels. This changing energy landscape has a major impact on businesses, and enterprises must have a sophisticated and comprehensive energy strategy in place. The private sector has made great strides through improvements in energy efficiency and procurement of renewables. The biggest area of opportunity to enhance energy strategies is with adaptive energy infrastructure, which makes energy assets more flexible, resilient and responsive to dynamic market conditions.