For many businesses, energy can make up a large portion of the cost of doing business however in many cases it is not subjected the same level of scrutiny that other expense areas do. Often getting a better price through procurement is seen as good enough or all that can really be done when it comes to managing energy as businesses are so focused on their core purpose or there is not an available resource to execute an energy management plan.
Retail pricing is increasing
Over the last 12 months or so we have seen over the counter retail pricing slowly increasing. The 15-20% energy savings of 2 or 3 years ago are now a distant memory however customers are still able to contract similar or slightly improved pricing compared with their expiring agreements.
What can be done? It’s like the old saying, give a person a fish and eat for a day, teach a person to fish and they can eat for a lifetime.
Long-term energy savings
Energy management can be seen in the same way, getting a better “deal” is only a short-term fix and should be part of a much wider strategy. Understanding how and where energy is being consumed, measuring and reporting on energy, understanding how energy use is impacted by changes in production and or environmental conditions can lead businesses to make informed strategic decisions about their longer-term goals so that these align with their wider business plans.
In our experience, customers who understand and measure where energy is being used to instigate change can achieve savings of 10% or more.
More detailed analysis can be done that will identify cost-effective savings in the range of 20-25%, and total savings of up to 40% including large capital measures. Once implemented, these savings can be forever rather than just for a 2 or 3-year energy retail contract term.
Measurable energy efficiency drives results
While many businesses track their site level energy costs and kWh volume, and have a fair idea about what systems are the most energy hungry, many customers cannot point to concrete data that underpins their view.
In a recent survey conducted by IPSOS on behalf of EECA, respondent businesses stated that energy efficiency is not seen as a top priority, however I would ask, what risk are you taking if the competition takes a different view?
The top 6 priorities were listed as:
- Employee Safety
- Achieving Growth
- Brand Development
- Employee Relations
Around 50% of respondents said that improving energy efficiency would have a direct impact on the above.
If we apply the principle of Moore’s law (computer chips will run twice as fast and halve in price every eighteen months) to energy, technological advances will bring product efficiencies in time but at this stage replacing a HVAC system or production line like we would replace our iPhone every couple of years remains out of the question. But that’s changing fast.
Smart energy monitoring is here!
The Internet of Things gives us the ability to assign a unique internet identifier to a virtually unlimited number of devices anywhere in the world. That means we can monitor the performance, or activity, on a unit by unit basis: collecting device-level energy data is much easier and more affordable.
Smart energy metering has now mostly been rolled out in New Zealand so customers can access half hour meter reads. While this provides a plot summary it cannot deliver the whole story.
A common barrier for businesses implementing an energy management strategy is that measuring consumption behind the revenue meter and at a high level of granularity has in the past been expensive and relatively difficult.
With the Internet of Things beginning to enter the large commercial and industrial space this is a thing of the past. Total Utilities can provide Panoramic Power’s nonintrusive, cost effective, and scalable metering solution along with a range of consulting services based on an OPEX pricing model.
Safer, cheaper, better — with the Internet of Things
Gaining visibility of device level behaviour leads to a better understanding of usage cycles and patterns. It can also change the way in which regular maintenance is carried out. While the change to preventative maintenance is a huge improvement on responsive maintenance this still leaves a lot to be desired in terms of cost management and efficiency.
Benchmarking similar pieces of equipment, systems or comparable locations can be a good way to understand when maintenance should be carried out however a device level data lead model of predictive maintenance can be adopted if customers can measure granular energy usage and operational up / down time.
A data-led energy strategy may lead to;
- Real and measurable long term energy savings.
- Improved environmental conditions.
- Increased staff productivity.
- Improvements in health and safety through predictive maintenance.
- Reductions in insurance premiums by monitoring energy intensive equipment that stores perishable or fragile products.
- Marketing value for green credentials.
Having an energy management strategy could be the difference in making more profits than your competitors, winning more competitive contracts, or securing longer term tenants through a lower delivery cost, a more productive work force or a more comfortable environment.
So, what can you do?
Total Utilities can be your virtual energy manager providing a pragmatic and full end to end approach in helping your business transform energy from just a cost of doing business to a strategic and competitive advantage.
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