Top five tips for an integrated energy strategy in 2015

by Sarah Samuel. Published Mon 12 Jan 2015 14:46
Five top tips for how energy managers can improve their energy strategy

Sarah Samuel, energy strategy advisor at Utilyx, explores the outlook for 2015 as business leaders grapple with the uncertainty of energy prices and supply:

We know that energy has risen up the business agenda in recent years, and now firmly holds its position as a key boardroom issue.

This increased focus on energy as more than just an operational cost is no doubt a result of the increasing uncertainty across the industry. While the cost of energy remains an important issue, wider market volatility, the security of the UK’s energy supply and the growing focus on reducing carbon consumption have all contributed to the need for a more strategic approach to energy planning.

The fact is energy can no longer be addressed in isolation. It’s an issue that affects the whole business, from finance and compliance to supply chain management, employee engagement and how the business is viewed externally.

Research from Mitie’s 2014 Executive study of FTSE 250 executives found that there continues to be a general disconnect between FM, procurement and energy teams in many businesses – despite evidence that a joined-up approach with shared goals could deliver significant savings.

Looking at the year ahead, Independent energy consultancy Utilyx and parent company Mitie have identified five top tips for how energy managers can improve their energy strategy.

1. It’s all about consumption – knowing when, where and how your energy is being used. It sounds obvious but, according to Mitie’s study, four out of five organisations capture only the most basic consumption information. What’s more concerning is that even fewer analyse and act on this data.

In 2015, the most forward thinking business will focus on addressing the issue. Using sophisticated monitoring and targeting systems, this will not only help them to gain insights but also save as much as 30% by reducing consumption.

2. Buy smarter – understanding what your organisation needs and negotiate the best deal. Right now, the range of energy contacts is more diverse than ever. To get the best deal, energy managers need to consider which contracts best suit their business.

Whether you have an appetite for risk, a need for more flexibility or if you prefer to use power purchase agreements (PPAs), all can provide benefits. Whichever you choose though, the increasing number of new entrants means that you are in a strong position to negotiate!

3. Efficiency, efficiency, efficiency – the key is reducing demand. The launch of the latest government regulation – the energy savings opportunity scheme (ESOS) this year means many businesses are already looking at how they use their energy. In fact, Mitie’s research found that 100% of responds cited carbon reduction as a key factor in their energy strategy planning.

With increasing cost and carbon reduction pressures, it’s crucial that energy managers consider all of the energy savings measures available and identify the ones that will have the best ROI for their business.

4. Empower FM – taking an integrated approach when it comes to facilities management. While many organisations have already recognised the benefits of co-ordinating with their FM team there is still some way to go.

Mitie’s research showed that FM is starting to be viewed as a strategic enabler to business, with more than half of respondents citing energy optimisation as a service they saw FM increasingly involved in.

This year, we’re likely to see even more businesses change their perception of their facilities management team. Energy managers can benefit by providing clear FM performance measures, helping to reduce consumption and improve efficiency across the business.

5. Generate – we already know that on-site generation has the potential to save businesses £33 billion by 2030. As we enter a new year, energy mangers need to ensure they are choosing the right technology for their business.

Careful attention needs to be paid to how a project will be funded, whether an independent or third party generator will be used and where on-site generation fits with other energy sourcing options from green tariffs to power purchase agreements.

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