How an Integrated Energy Strategy Can Benefit Your Business
Many organizations use a siloed approach toward energy management. One department manages contracts. Another may work toward reducing usage, while another is tasked with accomplishing sustainability goals. There is no cohesive strategy for buying, managing and monitoring energy.
That’s what integrated energy management is all about—having a unified view of your organization’s energy and a plan for using it as efficiently as possible. It’s using a holistic approach to address all aspects of energy usage, from purchasing electricity to measuring the return on investment (ROI) of renewable energy projects.
This can reduce costs and improve your bottom line, giving your business a competitive advantage. Here are five other big benefits of an integrated energy management strategy:
1. Improving Organizational Alignment
Do you find yourself surprised by decisions made without your department’s knowledge? Do meetings tend to bring conflict? Do you hear inconsistent answers from employees depending on who you ask?
Answering “yes” to any of these questions may indicate misalignment within your organization. This is a common challenge when there are multiple stakeholders responsible for various aspects of energy management. Each may be operating in a silo, working toward their own perceived priorities. When an organization takes a comprehensive approach toward controlling energy usage and managing costs, all parties tend to work toward the same objectives.
2. Achieving Sustainability Goals
Of the 600 business leaders surveyed in a 2019 Deloitte report, 63 percent said they have formal sustainability goals. Those goals include reducing electricity consumption and costs and moving toward greater self-reliance when it comes to supply. Fifty-seven percent are now generating a portion of their electricity supply on-site, up from 44 percent in 2014.
An integrated energy management strategy can help companies make the most of their efforts by combining energy purchasing with energy efficiency. That might include building energy efficiency projects into power agreements so upgrades can be funded by the savings achieved over time. There are a number of options for funding sustainability initiatives, including government incentives, Constellation’s Offsite Renewables solution and Constellation’s Efficiency Made Easy program. When you’re considering all aspects of energy management, from purchasing to monitoring, you have access to a wider variety of options to help you meet your goals.
3. Mitigating Price Volatility
Over the past two years, we’ve experienced record cold temperatures and, more recently, one of the warmest winters on record. All this uncertainty, combined with other factors, can contribute to volatility in the energy market. Regardless of how you purchase power and natural gas, there is going to be some level of risk. However, when you purchase energy as part of a larger portfolio, there are various strategies you can use to minimize the risk of buying more when prices are high while allowing you to take advantage of market lows.
Think about the way you diversify assets in your retirement plan. Depending on your risk tolerance and when you plan to retire, you can adjust the percentage of higher-risk stocks and more stable bonds to meet your goals. When you have a combination of both, the result is generally more predictable and consistent growth.
You can use a similar risk management approach to buying energy, taking a more aggressive approach to buying gas when prices are low, for instance, and scaling back when prices begin to climb.
4. Improving Reliability
Just as diversifying your energy portfolio can allow you to mitigate risk, pulling from a diverse supply of sources can help you improve operational efficiency and reliability.
Having the ability to generate a portion of your power onsite means you’ll be less susceptible to large-scale issues with the grid. And by taking the time to consider what your company can do to reduce energy usage through efficiency upgrades, building automation and periodically scaling back during times when demand is historically high, you’ll be using your existing resources more effectively. This can lead to reduced maintenance costs in addition to enhanced reliability. Learn more about our Efficiency Made Easy solution to fund energy efficiency upgrades with no upfront costs.
5. Increasing Shareholder Value
Taking a more sustainable approach to using energy benefits more than just the environment—it’s actually a financial competitive advantage, according to nearly 86 percent of business owners who responded to a 2019 Deloitte survey.
As you improve operational efficiency and reduce the costs of running your business, you’ll add profit to your bottom line. Demonstrating a commitment to sustainability can also be enticing to investors who care about a company’s values and profits. In fact, about 50 percent of global consumers are more willing to open their wallet for sustainable products, according to a 2018 Nielsen report.
Developing an Integrated Energy Management Strategy
Integrated energy management is more than a buzzword. It’s a long-term approach that requires buy-in from key stakeholders, thoughtful planning and tapping into the expertise of professionals who have the ability to put your plans into action.
As a leading competitive energy provider, Constellation has the technology and expertise to help you develop a comprehensive strategy for buying energy strategically and using it more efficiently. Approximately 2 million residential, commercial and industrial customers, including two-thirds of the Fortune 100, rely on us for integrated energy management solutions. Learn more about our energy solutions by visiting our website.