October 31, 2017
The New Business Model for Energy Management
Organizations are changing the way they perceive and approach energy management, thanks to four external factors: new utility business models, technology advancement, investor pressure and sustainability trends.
New Energy Management: Utility Business Models & Technology Advancement
In the past, utilities limited access to potential alternative sources, as the utilities were the sole power provider. Today, it’s a brave new world of choice in commercial energy. Shifting utility business models and technology advancements in distributed and renewable energy along with battery storage offer companies a variety of ways to source or produce power.
Investor Pressure Changes Energy Management
Investor pressure to follow and disclose organizational corporate responsibility and consumer interest in sustainability has lead organizations to look much more closely at the source of their energy, and buy and manage it differently.
In this new environment, it is no surprise that corporations are changing their internal energy management structure and teams. Decentralization of energy managers and energy management teams across an organization obscured a strategic view and links with finance or sustainability teams. The energy manager only interfaced with the utility.
Requirements for New Energy Management
Today, progressive organizations have evolved to a centralized energy management team that takes measures to reduce energy spend and usage.
But, more work is required to open companies up to even greater levels of energy efficacy and sustainability. Limited goal alignment with the larger organization still exists. Energy management teams are not responsible for, nor are they capable of, a company-wide view of risk and resilience or the market, technology and policy changes that could affect energy price and supply.
Edison Energy believes the future will require organizations to evolve their energy strategy around four areas:
- Understanding and mitigating risk,
- Developing organization-wide energy goals,
- Adopting a holistic view of energy, and
- Making data-driven decisions about energy programs.
Some changes are already happening, as organizations change their internal structure to meet today’s challenges. Companies are increasingly adding the Corporate Energy Manager role to their organizations to increase visibility of energy use across all locations, taking a portfolio view of energy.
Furthermore, energy procurement is being seen as a strategic decision rather than a common procurement issue. And organizations are learning to view energy as a cost that can be managed and not simply a fixed expense.
Future trends we expect to see include coordinated goals and metrics across energy teams and finance teams; strategic decision making jointly by the sustainability teams and energy teams; and the organizational leadership gaining a comprehensive understanding of opportunities, risks, costs and best outcomes across the energy portfolio.
Edison Energy’s expert team can help your organization develop a modern energy practice with independent, comprehensive, expert and data driven energy solutions. For more information, contact Edison Energy today.
