4 Steps to Developing an Integrated Energy Management Strategy

Nearly 80 percent of businesses view reducing electricity costs as essential to staying competitive, according to a 2015 Deloitte survey of more than 600 decision makers.

Most of those decision makers would say they are taking steps to control costs, but for many, the efforts are disjointed at best. At worst, they can actually be counterproductive.

That’s because each effort is often implemented at a different time, by a different department, and measured by its own metrics, rather than as part of the bigger picture.

These efforts may even be competing for resources in a struggle that resembles a tug-of-war. Consider a mid-sized university in the Midwest with a $15 million annual campus utilities budget. A purchasing manager with an accounting background secures the gas and electric contracts, trying to negotiate for a better deal every few years.

Meanwhile, two facilities managers are tasked with improving energy efficiency by replacing outdated heating and cooling systems and upgrading indoor and outdoor lighting.

Another staff member with a background in electrical engineering implements a building automation system. Then, after the university administration decides it’s time to get serious about sustainability, it begins working with several contractors to build on-site solar generation. This comes at a substantial cost, forcing the university to divert money and staff efforts away from its efficiency upgrades budget to make it happen.

If all these efforts had been developed and executed together through a long-term, integrated energy management strategy, the university could have funded its efficiency upgrades from the money it saved each year by generating its own solar power.

Developing such a strategy requires time and planning, but once your organization’s leadership has committed to it, you’ve already overcome the biggest hurdle. Here are four steps to take next.

1. Analyze Your Needs

Meet with your leadership team to determine the most important priorities for the project.

• Is it improving operational efficiency by driving down the cost of your systems and processes?
• Reducing operational costs through energy savings?
• Reducing your carbon footprint to improve the public perception of your company?

Whatever your goals, be sure they are specific, measurable, attainable, realistic and time-oriented.

2. Develop a Customized Strategy

Once you have established your energy management goals, determine what elements you’ll need to have in place to achieve them. The most effective strategies use a multi-faceted approach that addresses all key areas of energy usage. For many businesses, this includes examining how you use:

• Water
• Power purchasing
• Technology (such as building automation systems)
• Solar, wind or other renewable energy sources (may be generated on-site or purchased from a third party, such as through Renewable Energy Certificates)
• Gas purchasing
• Sustainability
• Energy-efficiency measures (such as upgrading to more efficient lighting)

Depending on your needs, you may need to work with several experts who can provide recommendations for each area. Working with a provider that specializes in integrated energy management solutions can make this process easier by offering a single point of contact who can then pull from an internal team of experts as needed.

3. Execute

There are a number of products and services that can help you reach your goals without overwhelming your own in-house resources.

Constellation offers a full range of these solutions, from various energy purchasing strategies to on-site generation projects.

For instance, depending on where you live, your company may have the option to purchase your electricity in a way that is similar to diversifying stocks in your 401(k).

Constellation’s Minimize Volatile Pricing for electricity (MVPe) program allows businesses to buy a percentage of their energy upfront at a fixed price and purchase the rest over time, using an algorithmic approach that buys more when prices are historically low and buys less when they are historically high.

We also offer a number of options for funding your sustainability initiatives without making a large upfront capital investment. One of the most popular options is Efficiency Made Easy, a program that allows businesses to build efficiency upgrades into a power contract and pay for them over time, using the energy savings they achieve each year.

4. Analyze

Now that your project is up and running, take time to regularly review results and analyze performance.

Here are a few key metrics that can help you gauge the success of your energy management efforts:

• Reduction in total energy usage year-over-year
• Percentage of total energy usage generated from renewable sources
• Total energy cost savings
• Carbon emissions avoided (you can translate this into easy-to-understand terms using the EPA’s Greenhouse Gas Equivalencies Calculator.)

Make the information available to key stakeholders, including your executive team, facilities managers and anyone else invested in your energy management strategy.

You may even want to consider publicizing your project’s success through press releases, company blogs and on social media.

Developing and implementing an integrated energy management strategy takes more time and planning upfront, but it’s well worth the effort. When everyone within your organization is aligned on your energy management goals and what it will take to achieve them, you’ll begin to see progress much faster. Even better, you won’t have to play a game of “tug-of-war” each time someone decides it’s time to roll out a new initiative.

Constellation has helped hundreds of organizations reduce energy usage and increase profitability by implementing an integrated energy management strategy. To learn more, contact us today.