Businesses have a responsibility to get more engaged with energy use than they are. This ties into their bottom line.
Responding to changing daily pricing of energy would allow businesses to cut costs and deal with the growing gulf between the price of peak and off-peak energy – and that existing and emerging technology will be key to making this happen.
Even without investing in new technology, simply being more aware of tariffs could help save huge amounts for heavy users of energy during peak times.
The cost of energy at peak times, such as early evenings, is increasing faster than that of energy used at other times of the day. Businesses could take advantage of the gap between the tariffs by using on-site sources of power to fit demand more closely. They can also enrol in demand-side response schemes to earn new sources of revenue by selling their flexibility back to the system as reserve capacity.
Often overlooked or underappreciated, conservation efforts can create the most substantial cost reductions. Many companies do not take a calculated and objective approach to addressing the number of kilowatt hours absorbed by their operations and are missing out on big opportunities to lower costs. Energy efficiency technology and approaches continue to evolve even though many of the enhancements such as improved automation, lighting, HVAC, and refrigeration may require upfront investment and the business case might struggle to meet the corporate internal hurdle rate. Employing third-party energy consultants with a touch of basic financial engineering can work to turn a capital-burdened project into a contracted, reduced operating cost.
With the European energy policy push for both economic and environmental efficiency, utilities are incorporating more and more dynamic energy pricing. With cheaper and more widespread deployment of smart meter technology, utilities often will charge different rates based on the variation of consumers’ usage throughout the day with time-of-use pricing—a major advantage for those with relatively flat or non-peak demand. In this situation, companies should look to “load shift”—that is, to move their consumption away from peak price times. For example, factories, which use the most electricity when machines are turned on, can create significant savings by taking operation away from peak grid hours.
Some utilities will also pay energy users to decrease consumption with demand response. During power shortages, companies commit to reducing energy by an agreed amount for a certain time and, as a result, receive a substantial credit, either immediately or against the monthly bill.
Simply put, businesses are not powerless when it comes to their energy bills. If they get engaged there is a lot they can do already, with low impact on their core operations.
We at Focused Hub are here to help traverse this complex landscape.