In the past, energy use in businesses was taken for granted and went largely unmanaged. However, as energy costs have continued to rise, there has been a shift in mindset. Today, the need for better energy management is increasingly discussed in boardrooms.
However, it is often difficult for internal advocates to justify the ROI of such projects due to the insufficiency or inaccuracy of the data available. So much so that Gartner suggests that ROI and conflicting priorities are seen as the top two challenges faced by over 40% of cases.
The move to green
Of course, in addition to wanting to reduce costs, one of the major catalysts for better energy management is the desire for businesses to be seen to be green. Environmental accountability is now top of mind for more than two-thirds of business leaders, with almost eight in ten (79%) saying they have either already entered into a renewable energy power purchase agreement or plan to do so within the next two years. And for good reason. It attracts increasingly eco-conscious clients and helps staff retention.
As well as moving to greener energy tariffs, I fully expect organisations to increasingly move towards using energy at cheaper times of day. In fact, we are already seeing savvy manufacturers aligning manufacturing processes to times of day when prices are lower and there are a higher number of renewables in the mix.
A three-step strategy
Unfortunately, almost half (46%) of organisations admit that the availability and cost of energy has caused moderate to significant disruption to their business activities during the previous year. Whilst three quarters admit that they have been being primarily focused on short-term energy demand reduction optimisation strategies, a longer-term view is preferable.
For those looking to improve their energy management, there should be a three-step strategy. Firstly, the business should look to reduce their overall load as much as possible. Then they should look at what proportion of their load is fixed and variable. Before finally looking at how they can move the load to cheaper times of day.
Need for the right data
Whatever the catalyst is to better energy management, data is often the proof point required to get the project off the ground. While digital technology is not seen as a major barrier, data visibility and reliability often is. Whilst there is more data than ever before, it is about producing the right data to support ROI calculations and gain boardroom buy in.
But how much onus should be placed on the business to establish the effective modelling strategies required to generate the requisite data to prove ROI and environmental benefits, and how much should be the energy supplier?
For me, it is important that the industry does what it can to provide accurate energy consumption data and information management strategies that will support a business to deliver its cost reduction programs and environmental management goals.
How technology can help
Luckily, the latest technology suppliers can help. Through the advent of artificial intelligence and machine learning, it is easier than ever before to see when and where a business uses energy and how much they could save by moving this load to a different time of day.
The act of better balancing load is a big focus for the energy industry right now. Energy behemoth Octopus is currently undertaking real-time trials to discover how moving energy demand out of peak times can help balance the power grid and reduce costs. The scheme will help inform the National Grid Electricity System Operator (ESO) for its plans to run a zero-carbon grid for certain periods by 2025 and a fully decarbonised one by 2035. It will also provide insight into how customers could play a role in reducing the costs of balancing supply and demand and ultimately save themselves money on their electricity bills.
Time to align
Whilst energy prices have thankfully started to come down, they are still significantly higher than they were in 2022 and continuing to expose businesses to serious financial and operational challenges.
The desire to reduce energy usage and improve sustainability goals has led to a significant shift in attitude with businesses changing their behaviours and strategy through a diverse set of long-term investments and activities to manage energy consumption. So much so, that three-quarters say they have already started reducing their energy usage through optimisation activities. Another 19% plan to do so within the next two years.
Yet, businesses wanting to make a change are still facing significant hurdles internally. It is important, therefore, that the industry does what it can to align itself with organisational priorities so that they can help them execute at a lower cost point and unlock additional opportunities.
