Post by account_disabled on Mar 14, 2024 2:32:12 GMT -4
This is the first in a new series of articles on energy management, where I’ll share ideas from more than a dozen years in the deregulated energy market trenches and more than $ billion in successful energy commodity transactions.
Today, whether I am talking energy with the C-suite or the “E-suite” (think energy managers and procurement officers) – it doesn’t take long for the conversation to CG Leads land on the growing complexity of managing energy. Remember when energy was easy? You’d get a bill from the utility and pay it. That was energy management.
Then came natural gas and electricity deregulation; energy efficiency and performance contracting; all things “green”; curtailment programs like demand response; utility incentives; smart meters; and the prospect of a smart grid. And with each of these developments came a spate of new intermediaries pitching their wares, often without ever really having stopped to understand your specific energy challenges or how their solutions might work in tandem with your other initiatives.
I’ve come to learn through many successful engagements that energy management is situational. The best approach is the one that is right for you. The key to getting there is by cutting through the clutter of energy issues, programs and solutions competing for your attention to focus on what matters most: lowering your total energy cost.
And it’s really very simple. Here’s how:
In this clarifying equation, your total cost of energy (E) equals the unit price you pay for energy (P) multiplied by the quantity of energy you use (Q), minus any incentives (i) utilities, ISOs, and other agents may be willing to give you.
And while you likely have been approached by salespeople working their individual piece of this equation, offering you a good price for energy, or ways to help you get more energy efficient, or the opportunity to get you a “free check” for demand response, the key is to put each element of this equation into service of a master energy strategy that maximizes your total benefit. This requires a holistic approach to energy management.
Today, whether I am talking energy with the C-suite or the “E-suite” (think energy managers and procurement officers) – it doesn’t take long for the conversation to CG Leads land on the growing complexity of managing energy. Remember when energy was easy? You’d get a bill from the utility and pay it. That was energy management.
Then came natural gas and electricity deregulation; energy efficiency and performance contracting; all things “green”; curtailment programs like demand response; utility incentives; smart meters; and the prospect of a smart grid. And with each of these developments came a spate of new intermediaries pitching their wares, often without ever really having stopped to understand your specific energy challenges or how their solutions might work in tandem with your other initiatives.
I’ve come to learn through many successful engagements that energy management is situational. The best approach is the one that is right for you. The key to getting there is by cutting through the clutter of energy issues, programs and solutions competing for your attention to focus on what matters most: lowering your total energy cost.
And it’s really very simple. Here’s how:
In this clarifying equation, your total cost of energy (E) equals the unit price you pay for energy (P) multiplied by the quantity of energy you use (Q), minus any incentives (i) utilities, ISOs, and other agents may be willing to give you.
And while you likely have been approached by salespeople working their individual piece of this equation, offering you a good price for energy, or ways to help you get more energy efficient, or the opportunity to get you a “free check” for demand response, the key is to put each element of this equation into service of a master energy strategy that maximizes your total benefit. This requires a holistic approach to energy management.