Strategic Energy Review
That energy is essential is a given-without it no company would be in business. Thus all businesses must manage energy to an extent, if only to ensure its availability. Beyond that basic need, decisions relative to energy options and opportunities will depend on how significant the cost and environmental effects of energy are to business operations, broader business strategy and positioning considerations and, for some, new market opportunities
From the purchasing department to the board room, businesses today are more focused on “managing” energy than at any other time in recent decades. Energy is increasingly seen as a strategic business concern, whether it be:
- Guaranteeing a reliable supply to support critical business processes ranging from manufacturing operations to assuring the integrity of key company data;
- Maximizing efficiency to reduce use, cost and environmental impact; or
- Developing new products or services to take advantage of a dramatically changing energy marketplace.
Energy Group designs, implements and evaluates energy efficiency and energy management programs for the public and private sectors. We promote the efficient use of energy through strategic energy management and continuous improvement processes.
in the energy efficiency and manufacturing fields, we leverage diverse backgrounds and unique expertise to offer clients effective energy efficiency programs focused on the commercial and industrial markets.
Core Services
- Energy efficiency program design and implementation
- Program impact and process evaluation
- Development of continuous energy improvement business management systems
There are four steps in the overall process:
Step 1: Initial Assessment.
This first step involves a thorough, organization-wide assessment of the importance of energy to the company in relation to its overall needs, risks, goals, image and reputation, and of potential business opportunities through energy-related products or services. Properly implemented, the assessment can provide clear direction as to the potential inherent in a strategic approach to energy planning and management.
The key question posed by the assessment process is “what are the business opportunities related to energy?” This framework provides the context for evaluating energy as more than simply a cost of operation. Companies that have embarked on such an evaluation have asked themselves very fundamental questions about how energy relates to:
- Potential business opportunities:
- Most efficient use
- Supply/price management
- Opportunities to sell energy products, services, credits, etc
- Potential business risks;
- Supply reliability
- Key Fuel Availability
- Regulations
- Geopolitics/terrorism
- Others
- and the overall “positioning” of the company
- What kind of company are we?
- Where do we stand on key issues
Step 2: Design the Process.
The design and planning process begins with an assessment of a company’s actual energy needs versus “business as usual” practices and an investigation into the most promising solutions for meeting those needs. Taking this approach-asking the fundamental question of “how much energy do we need?”-encourages thinking beyond the familiar and the comfortable and exploring possibilities for innovation.
It is important that process design and planning consider all factors that could inhibit success, from corporate culture to appropriate scale to resources, funding and organization.
Key questions to consider:
- At what scale should we initially approach energy management: a single facility or division, or enterprise wide? This decision is driven by the potential for success in the early stages and consequent sustainability of the overall management process.
- What technical and financial resources are available (this is closely related to the scale question): are they internal, external, or both? What are the competing priorities for these resources?Are there programs or processes already in place. These and other questions frame the overall approach that a company will choose and can greatly influence the chances for early success, which is critical to establishing a sustainable management process that will maximize potential benefits.
- How much Energy do we need? What is the best way(s) to meet this need?
Step 3: Evaluate Opportunities
Create Inventory of Opportunities and Energy “Baseline”
- Decide Scale of Initial Efforts • Prioritize Opportunities Etc.
- Efficiency Measures Supply Options Products & Services
This step is the “nuts and bolts” of the energy strategy and management planning process because it is where real opportunities can be realized. It is where the “real work gets done,” but because of its potential size and complexity, especially in larger, diversified and energy intensive businesses, if not well mapped out and systematically approached, significant opportunities may be missed, or momentum may be lost that will be difficult to regain.
Essential to this third and crucial step in the process is a baseline that reflects the types, quantities, and costs of energy used in each significant component of the business. Ideally this will include facilities, operations, transportation and distribution, and in some cases even the energy consumed by the product itself, especially if that issue is increasing in importance in a business sector.
Also, for certain companies, this will include an assessment of new or expanded energy-related products and services that may benefit the company.
Opportunities fall into three categories, although not all will be relevant for all companies:
- Energy efficiency reduces the amount of energy used, reducing both cost and environmental impact.
- Energy supply management can help to control costs and assure reliability.
- Energy related products and services can help existing products to be more competitive in the marketplace or create new markets.
At any point in time, in addition to the cost of energy, a range of factors influence the opportunities that are available.
Factors Influencing Energy Opportunities at a Given Point in Time
- Opportunities at a point in time
- Business possibilities
- New market and facilities
- Equipment processes
- Capital
- Existing products
- In place reward systems
- Work practices
Because these influencing factors, including energy cost, are dynamic, a strategic approach to energy planning and management must be dynamic and iterative rather than static. Only in this way will opportunities be continuously identified and realized.
Step 4: Implementation and Efficient Energy Implementation Survey
This fourth and final process step follows a classic management system model and involves determining and setting in place an organizational structure that will ensure that the program is integrated into the overall company management culture and that the new energy management goals are achieved. Regardless of the framework decided upon, certain management principles and tools must be in place to achieve significant results. These include:
- Leadership at the very top of the company with a clear commitment to results;
- Clearly stated goals and measurable objectives at appropriate levels;
- Clear accountability for results, whether in a single or multiple executives;
- Sufficient resources to enable achievement of the objectives and goals;
- Periodic review and updating of goals, objectives and resource commitments; and
- Recognition of progress and reward for achievements.
For more information regarding our SER and EEIS services, please feel free to contact us.
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