Energy Insights: How Consumer Trends Have Evolved Over the Past 10 Years
Incorporating sustainability as a high-priority item in a business model can reap benefits for many parties. It may attract the environmentally-friendly customer and investor, and more importantly, it can reduce a business’ carbon emissions and improve the air for local communities. Dino Caro, senior vice president of sales at Constellation, identified sustainability as one energy trend that continues to be the forefront of business energy strategies, at the North American Gas Forum in Washington D.C. in October.
Caro put the spotlight on four energy consumer trends that he’s discovered over his 28-year career. They include:
“The recognition that our climate is changing has really driven a new era of consciousness regarding sustainability,” said Caro.
This recognition often begins at a government-level, which then funnels to businesses who make commitments to reduce their carbon footprints. Several businesses are even committing to a zero-carbon future. These factors have catalyzed an unprecedented growth in renewable power generation from both wind and solar projects that are heavily supported through government-led incentives.
Constellation’s Offsite Renewables (CORe) solution allows businesses to make a strong sustainability statement by integrating renewable energy purchases from existing renewable generation into a load-following energy supply or by supporting the development of new renewable energy assets on their regional grid.
2. Energy Efficiency
There has been an increase in demand in efficiency. This trend has been made evident by several city-wide initiatives to improve the energy efficiency of buildings, such as in Chicago. Chicago recently became the first U.S. city to assign large buildings an energy performance rating with the launch of its Chicago Energy Rating System, in which properties are required to display their ratings in a prominent location and must share them when listing the property for sale or lease.
This initiative is becoming more commonplace across the country and has also been implemented in cities like Philadelphia, Washington D.C. and New York.
Constellation’s Efficiency Made Easy is one solution allowing customers to pursue efficiency upgrades like LED lighting, HVAC/heating, and building automation controls, without upfront capital.
3. Decline in Gas Prices
Ten years ago, we saw the sharp decline of gas prices that were routinely above $7/MMBtu (2005-2008) to $4/MMBtu (2009-2014) then further down to $3/MMBtu in 2015, and today lower even more. Much of this has been driven by significant new gas production from our shale regions in Ohio and Pennsylvania and is one contributing factor to the United States’ “net energy exporter” status.
Learn more about the drivers behind natural gas demand.
4. Energy Managers’ Roles are Changing
“We’re seeing [energy managers’] priorities shift from solely focusing on the price of a commodity to seeking a value-driving relationship with their energy supplier,” said Caro at the Forum. Traditionally, companies have been focused on selecting the lowest price through a request for proposal, however, there is a shift happening in the industry where energy buyers’ responsibilities are changing. Energy buyers are looking to their supplier to do more than simply provide gas or power.
Renewable energy has been growing at an accelerated rate and more companies are setting sustainability goals and taking action, but the path to achieving these goals isn’t always clear. In addition to being a national supplier of base commodity, Constellation has the tools and expertise to help customers identify alternatives and build an energy strategy. Ask yourself these questions to determine if it’s time to modify your business’ energy strategy.
Some examples of our customers evolving priorities include the following:
- Converting coal to natural gas, including interfacing with the utility and transporters to enable the conversion;
- Sourcing biogas on behalf of customers to meet renewable requirements;
- Offering on-bill financing to implement energy efficiency upgrades that reduce both power and gas consumption;
- Standing between customers and large wind projects by entering in to long term power purchase agreements (PPAs) and creating a much less onerous retail PPA for the end user; and
- Helping customers strategically purchase natural gas through innovative programs that leverage the same principles that are used in financial investing.
Constellation can work with you to respond to your business’ changing energy goals and priorities through an integrated energy management strategy. To connect with a Constellation representative to learn more about our natural gas and renewables solutions, visit our website.