Many companies do not realize the high cost of energy for their operations impacting their bottom line – not just the direct costs, but also money spent indirectly for energy in the supply chain and for outsourced work. Yet many firms approach energy as merely just another cost to be managed. Get the bills, pay it, and little else. This bypasses opportunities to reduce cost significantly and, also reduce risk and improve resilience.

While that alone is moving energy up many corporate priorities, recent strong social and environmental trends, such as recent Climate Change-related disasters, are bringing this issue to the table. Adding on the vageries of availability of some energy sources, greater scrutiny about corporate carbon footprints and environmental performance, and innovations in energy technologies make corporate energy policy more important and provides the opportunity to outshine one’s competition and create value.

Is this real or just nice talk? One example is Microsoft. As written by several writers. Electricity used to be an afterthought for Microsoft. Turn the PC on, and it goes on. Turn the data center on, and it goes on. But with the growth and complexity of systems, Microsoft realized that electricity was critical in its operations and products, particularly its availability and price volatility. As their systems grew, Microsoft realized it was one of the biggest electricity users in the country. Under growing pressure, it developed and implemented firm-wide goals on energy efficiency and on moving toward renewable sources, saving it lots of cost and placing it as a perceived environmental leader.

OK, so your firm is not Microsoft. What can you do to manage your energy use and maximize the opportunities?

1. Let Energy Be Heard. It is impossible to make or implement a beneficial energy policy without the clear-cut structure of a group and direct involvement from the CEO. Experienced professionals need to be engaged (from the outside or within) and get support from many throughout the organization, most important the CEO who can ensure that goals move forward. Goals must be formulated and communicated and accountability ensured.
2. Don’t Skip The Basics. There is a tendency to want to get the answers first. But it’s important to define the questions and get basic answers first. How much energy does the company use, how much does it cost, and which areas use the most? A thorough energy audit should be conducted early on to answer these questions. Then you can tackle the questions of how to best reduce energy usage and cost, where can the use of renewables make sense, and how do these align with company expectations? Or, in other words, understand your risk factors and opportunities for gains.
3. Develop Comprehensive Goals. Once you understand the company’s full energy profile, now you can develop an action plan to ensure fuel availability at lower costs and how that will impact one’s carbon footprint. You can focus on the areas deemed most inefficient. However, one important tip is do not ignore the rest of the operations, the parts that do not appear to need upgrading. It is also important to manage your entire operations, especially growth in business areas doing well. While you may get savings from upgrading inefficient portions, the savings could be short-lived and balanced out by growth in areas that are efficient. Be aware of and account for overall future growth. Don’t forget to consider opportunities for your suppliers to reduce energy usage, which you pay for indirectly.
4. Shift To Renewable Or Flexible Energy Sources. The group’s analysis should also look forward at your current energy sources and determine will they still be available 10, even 20 years in the future or might changes happen that will reduce its availability or raise its price. Try to analyze which fuels are anticipated to be available and plentiful and build operations to use these so the company is not painted into a corner in the future. And consider renewable technology, such as solar, wind, and geothermal, where the source is free and the costs have dropped markedly.
   CCES has the experts to help your firm analyze your energy profile – to perform the energy audit to create a full understanding of your energy usage and demand and to evaluate and develop robust, long-term strategies to reduce energy usage and cost and maximize opportunities for growth. Contact us today at 914-584-6720 or at karell@CCESworld.com.