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An Integrated Approach to Energy Management

As energy and climate concerns continue to rise, companies are changing how they buy and use electricity, natural gas and other resources. And, as they embark on the journey to more efficient, sustainable operations, three requisites have emerged: cutting carbon emissions, decentralizing electrical systems and embracing digitization. This is the active energy management movement, and
the trends driving its growth are universal and impact businesses in all sectors.

It starts with smarter data collection and access to more real-time information. It also includes increased automation and control, and predictive analytics to optimize hardware, as well as onsite and offsite renewable energy, microgrids for increased resiliency and much more.

Organizations often have managed related initiatives independently due to legacy departmental divisions. Those divisions have held companies back even as they attempt to move forward.

The major shift is that traditionally disparate decision-makers from across the business are now discussing procurement, efficiency and sustainability strategies at the same table—and the whole will ultimately deliver greater returns than the parts.

A false sense of security
So where are many businesses on the convergence continuum?

Schneider Electric recently partnered with GreenBiz Research to complete a study on the current state of corporate energy and sustainability programs. The survey of almost 240 large corporations ($100 million or more in revenue) from around the globe revealed that most organizations feel prepared for a decentralized, decarbonized and digitized future, but many are not taking the necessary steps to integrate and advance their energy and sustainability programs.

Get Active An Integrated Approach to Energy Management By Bill Brewer, Schneider Electric

This revelation can be attributed to the finding that most companies still take fairly conventional approaches to energy management and climate action. These gaps in innovation are further complicated by limited coordination between procurement, operations and sustainability departments, as well as inefficient data collection and sharing.

Eighty-five percent of respondents said their company is taking action over the next three years to keep carbon reduction plans competitive with industry leaders. The projects that have been initiated or are in development, however, skew heavily toward energy, water and waste conservation. Outside of renewables, few organizations represented in the study are implementing more advanced technologies and strategies to manage energy use and emissions.

To be competitive with the carbon-reduction efforts of industry leaders, companies must develop and deploy a variety of projects, including microgrids, combined heat and power, energy storage and demand response. The ability to both consume and produce power—act as a “prosumer”—will enable companies to build more sustainable, profitable operations and reduce reliance on the traditional electricity grid.

Understanding the obstacles to success

A primary barrier to progress may be internal alignment. Sixty-one percent of respondents said their organization’s energy and sustainability decisions are not well coordinated across relevant teams and departments, which is particularly true for consumer goods and industrial businesses. In addition, the same number of respondents said lack of collaboration is a challenge.

Regardless of industry, companies are taking a proactive approach to collecting energy and sustainability data. Education is leading the way, with 87 percent of surveyed companies stating that related projects are planned or underway, closely followed by service providers and industrial companies. Health care was least proactive—though at 73 percent, this still indicates a dedication to action.

Respondents from larger companies had higher rates of data collection. Eighty percent of companies with annual revenues over $1 billion are collecting data. Companies in Europe reported the highest data collection rates at 81 percent, above the global average of 79 percent.

The discovery of widespread data collection, however, was offset by how data is used within a company, another obstacle for integrated energy and carbon management. When asked how broadly energy and sustainability data was shared throughout their companies, less than half (41 percent) indicated that this information was shared globally across their enterprise.

A full 33 percent reported that data was managed at a local level, and an additional 14 percent said data was managed regionally or within business units. Decentralized, local data can be helpful for individual facilities, but the absence of broader sharing limits the ability to pinpoint and capitalize on savings opportunities, as well as manage programs in a coordinated, efficient fashion.

Leading the clean energy transformation

Opportunities abound for companies to profit and succeed over the near- and long-term by adopting and implementing integrated energy and sustainability initiatives. With the falling price and increased effectiveness of efficiency, cleantech and renewable energy technologies, financial and environmental considerations don’t have to compete.

In addition, energy efficiency and sustainability are inherently complementary. Improved efficiency, for example, pays dividends by trimming consumption and costs. But it has secondary benefits as well, such as environmental sustainability, which the International Energy Agency said can deliver as much as 2.5 times the value of reduced consumption. Companies that recognize this connection and operate related initiatives in tandem improve productivity, maximize impact and see greater returns.

Businesses can’t afford to wait; they must take this opportunity to facilitate efficiency, support innovation and increase renewable and distributed energy adoption. Rather than looking at a carbon-neutral world as a barrier to operations, organizations should focus on the advantages and strategic value active energy management brings. Those that fail to act will be left behind. | PGI

Bill Brewer is vice president, global supply and sustainability operations, for Schneider Electric. He is responsible for the operations oversight of Schneider Electric’s energy and carbon management, resource efficiency, and cleantech and renewable energy services. Previous experience includes working as a natural gas and electricity wholesale trader for Merrill Lynch and Allegheny Energy. Brewer also has an extensive background in electricity risk management, and the underlying fundamentals that influence and shape the energy markets. Brewer has also been called as an expert witness for Federal Energy Regulatory Commission proceedings. Connect with him on LinkedIn.

Bill Brewer is vice president, global supply and sustainability operations, for Schneider Electric.

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