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How a Comprehensive Energy Strategy Raises the Bar on Savings

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Let’s start with the good news: businesses that boost their energy management programs get good results, according to our 2017 Energy Decision Makers Survey Report. Of the 300 business owners and energy decision-makers we surveyed across the U.S. and Canada, 94 percent are acting to reduce their energy use.  

That's an impressive number. Equally impressive is the financial gain their efforts netted. 85 percent of businesses said that their energy management practices lowered energy costs. And one-quarter successfully lowered energy costs between 11 percent to 20 percent. 

Given these results, it’s not surprising that companies are enhancing their commitment to energy efficiency. Many are taking actions to reduce energy usage, including:

  • Using monitoring technology – 47 percent

  • Promoting energy-saving practices – 65 percent

  • Making energy-saving improvements – 68 percent

But there is still room for improvement: only 6 percent of businesses take advantage of all 6 energy management best practices. 

six percent

As effective as the aforementioned measures are, they are best instituted as part of a larger plan. Companies that look at the big picture with a Total Energy Management approach position themselves to best take advantage of cost savings opportunities.

The Other Half of the Equation

Total Energy Management requires more than just looking for ways to cut energy use, or “demand-side management.” It also requires analysis of the “supply side” – a business’s energy purchases. By integrating demand- and supply-side planning, companies can see opportunities that might not otherwise be apparent. 

Focusing on one side and not the other may leave money on the table. Perhaps you focus on getting a good price when you buy your energy supply. If you don’t use that energy efficiently, your price advantage may erode. Conversely, if you focus on energy efficiency without carefully managing energy purchases, you can lose the money that you saved. Our survey looked at six basic energy management best practices:

Supply-Side Best Practices

  1. Work with a trusted independent energy supplier
  2. Explore a range of energy products
  3. Monitor the energy market for opportunities

Demand-Reduction Best Practices

  1. Deploy energy monitoring technology
  2. Optimize energy consumption schedules
  3. Identify opportunities to increase energy efficiency

Ninety-six percent of businesses reported that they use at least one of these energy management tactics. But did they bring all the savings home? No. Only about 6 percent of businesses implemented all six key tactics. By failing to combine multiple tactics in a Total Energy Management strategy, many businesses fall short. They may miss opportunities to achieve synergies on supply and demand.

Success Through Guidance

A key problem for businesses often is lack of trusted guidance. Our survey revealed that a higher percentage of businesses cut costs when they work with an independent energy supplier. In fact, 30 percent of businesses using an energy services provider lowered costs by 21 percent or greater. 

Energy markets are complex and unpredictable. Making the most out of them requires consistent monitoring, a service that sophisticated independent energy suppliers provide.

Fewer than half of businesses surveyed actively monitor the market to leverage the most advantageous pricing. That means they are likely leaving savings on the table, since our survey also shows that businesses that monitor the energy market reduce costs at a higher rate than those that do not.

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Change Ahead?

Businesses are not yet managing their energy supply holistically, but they are moving in the right direction. They do seem to understand that good energy management requires engagement on multiple fronts. Of survey respondents, 70 percent practice one or more supply-side and one or more demand-side tactic, and 32 percent practice two or more supply-side and two or more demand-side tactics. 

This year about one-third or more of businesses surveyed plan to:

  • Hire or contract with an energy management services vendor

  • Improve supplier and contract management

  • Use energy monitoring technology to pinpoint waste and inefficiencies

  • Enhance data analytics capabilities to optimize energy plans

  • Shift energy-intensive activities to off-peak hours

  • Purchase a mix of fixed- and variable-rate energy plans

What more can you do? Treat energy spending like an investment. Many factors affect the price your company pays for energy. Some you control; some you do not. By engaging in Total Energy Management, you can make the most out of the investment and raise the bar on energy savings.

Want to know how your energy strategy stacks up with other businesses? 

Download the 2017 Energy Decision Makers Survey Report

Posted: February 22, 2017