How to Effectively Manage Your Natural Gas Strategy
4 min readToday, energy managers are challenged with maintaining the reliability and affordability of their businesses’ energy while also making efforts to reduce carbon emissions. Natural gas continues to help meet demand as the nation addresses the challenges of the energy transition to a carbon-free future. The use of innovative technologies in low carbon intensity solutions enables us to have reliable access to energy sources while simultaneously reducing emissions associated with natural gas usage. This approach helps bridge the gap in achieving rapid carbon emission reduction goals without compromising on reliability or affordability.
Navigating the Energy Landscape
At Constellation, we are committed to advancing clean energy initiatives to accelerate the transition to a carbon-free future. While sustainability is a top priority, ensuring reliability for the customers we serve is also important. There can be challenges when it comes to producing renewable energy from solar farms and wind turbines, as weather conditions can affect power availability. By offering a nuanced approach with a diverse portfolio that includes both renewable and reliable options, Constellation ensures that customers can power their operations 24/7 while serving the current energy landscape.
Natural gas is still an affordable, versatile and reliable energy source that complements renewables in our transition to a low-carbon future. With a large customer base of gas consumers, supported by our gas-fired power plants, Constellation can provide flexible baseload power that fills in the gaps when renewable energy fluctuates in reliability.
Energy managers can use various strategies to ensure the reliability and affordability of their natural gas supply while also making strides to decarbonize their supply and work towards a more sustainable future.
A Managed Approach to Natural Gas Purchasing
Many businesses and organizations have shifted their focus from more than just price. Strategic risk management of both NYMEX and basis costs helps support long-term budget certainty and protects against price volatility. Constellation’s Managed Portfolio Service (MPS) is a targeted approach that helps customers manage their basis price risk through modified-cost averaging and pooling. Basis can vary widely based on location due to local supply and demand factors. The program can cover all or just some of the total usage volumes at a facility. This type of purchasing strategy is ideal for organizations looking for innovative ways to manage and diversify their purchasing risk. Options include:
- Management of Total Usage: Allows the program to take care of any changes in usage, even when usage exceeds monthly nominations.
- Management of Specific Nominations: Allows the customer flexibility to decide what volume will be run through the program and what volume they will manage on their own.
- Management of Incrementals: Allows customers to lock in basis costs; MPS can help manage incremental costs.
Natural Gas Sustainability
For businesses looking to decarbonize their current natural gas supply, Constellation can help you achieve long-term sustainability goals by seamlessly integrating carbon offsets or Renewable Natural Gas (RNG) into your natural gas procurement strategies.
Carbon offsets are a low-cost option for businesses looking to start their sustainability journey that may lack the capital to implement full-scale carbon-reduction projects. Carbon offsets represent a verified reduction in emissions of carbon dioxide, or other greenhouse gas emissions, made elsewhere through forestry, energy efficiency, industrial process improvements and carbon capture and sequestration projects.
On the other hand, Renewable Natural Gas (RNG) is physical pipeline-quality natural gas derived from the decomposition of organic matter plus associated environmental attributes. It begins as raw biogas which is then purified to meet applicable pressure, quality and heat content requirements before being injected into a pipeline, like regular natural gas.
The environmental attributes associated with RNG, which include reduced carbon emissions as compared to fossil-derived natural gas, can be paired with end-users’ natural gas consumption to allow end-users to make renewable energy claims associated with natural gas use. Specific sustainability claims and emission reduction levels will depend upon the specific end-use of the natural gas and the chosen GHG emission reporting standards. A business’s purchase of RNG attributes may also reduce Scope 1 carbon emissions replaced by biogenic sources, without the need to modify existing infrastructure.
Shaping the Future of Energy
Constellation continues to provide low-carbon intensity solutions that bridge the gap to the future as we address net-zero emissions goals. Governments are putting in place more legislation supporting low carbon fuel standards (LCFS) and accelerating both innovation and affordability.
Looking ahead, we envision renewables and natural gas continuing to work together sustainably. Our strategy involves expanding renewable energy capacity while investing in gas infrastructure upgrades and emissions reduction technologies. This balanced approach navigates the energy transition while upholding environmental stewardship.
Comprehensive Energy Solutions with Constellation
Constellation is committed to offering a mix of solutions to help customers meet their energy goals. Constellation provides a range of offerings, from supplying power and natural gas to a suite of sustainability projects and reporting solutions.
With Constellation, you gain more than just an energy provider. You have an integrator who can manage all aspects of your energy needs, empowering you to focus on your core business while we help you navigate the complexities of sustainable energy solutions. Explore our comprehensive product mix to address these challenges and help your business achieve its goals.
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