Keeping a Lid on Energy Costs: Energy Management Firms Can Help
Energy costs can be among the largest — and the most unpredictable — category of operating costs, and keeping them under control is one of the biggest challenges faced by enterprises today.
Business owners and managers can try to tackle this formidable task themselves, or they can turn to energy management experts who specialize in identifying and implementing energy savings strategies for commercial customers.
Less than half of large companies use outside energy management experts, according to a survey by advisory services firm Edison Energy. But, many organizations are now concerned with rising costs and are learning that working with a specialist in this area can significantly reduce their increasing energy-related operating costs.
Energy Costs On The Rise
Factors driving up energy costs in Canada include population growth, industrial expansion, aging infrastructure and the shift away from coal.
Smaller businesses in particular are feeling the pinch. In Ontario, where 99 percent of businesses are small– or medium-sized, the province developed the Five-Point Small Business Energy Savings Plan. One of the five points promotes the use of energy managers to help businesses implement more effective energy efficiency plans.
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Energy Management: How It Works
The goals of energy management initiatives center around three areas, namely resource conservation, climate protection and cost savings for today’s businesses.
An energy management consulting company will perform an energy assessment and then develop a recommended course of action and a solution tailored to a company’s specific energy needs. Energy management firms will also work with businesses to determine its energy requirements, financial targets and risk tolerance.
These firms specialize in helping companies trim costs, often by cutting energy use during peak hours. A utility company will sell energy at reduced rates to a business that consumes less during peak hours. The benefits here are a two-way street: the company saves money and it helps energy suppliers decrease drain on the grid for all of its customers.
Energy management companies can negotiate more stable prices for their clients, eliminating some of the risk and unpredictability of volatile energy prices.
Firms like Active Business Services, an energy consulting and management company in Burlington, Ontario, typically work with clients by analyzing their historical consumption and then developing a cost-effective purchasing strategy for electricity and gas.
They negotiate different energy buying options based on the company’s needs and objectives. These can include fixed pricing plans, where the customer pays a set, predictable rate for a certain period, or variable pricing, which allows consumers to take advantage of lower market conditions.
Software Innovations
Energy management specialists use sophisticated data monitoring and analytics to deliver cost-saving solutions for companies. There is “a tremendous amount of innovation happening in software and cloud services for commercial buildings,” according to a Forbes roundup of top energy analytics companies.
Specialized energy management software programs like EnergyCAP and MACH Energy track and report usage data. They’ve streamlined the conservation process and can deliver cost savings for business.
There are a lot of firms competing in this specialized software market. Until recently, most have catered to larger commercial clients. But now, they’re starting to look at the underserved small and medium enterprise market.
