Fereidoon Sioshansi | Feb 21, 2017
Commercial and industrial businesses in the U.S. spend around $260 billion annually on electricity and natural gas alone. Of this, as much as a third may be wasted or not optimally used to deliver the desired products or services they need. While the exact scope of the energy wasted varies from one C&I customer to another, the total wasted energy bill may be as high as $80 billion per annum, according to the same study.
A recent survey revealed that the overwhelming number of C&I customers acknowledge that:
- They have not exhausted all opportunities for capturing energy efficiency savings;
- Only a quarter of those surveyed knew how much they were spending on energy; and
- Nearly half said they lacked a trusted partner who could assist in making prudent energy efficiency investments.
A number of barriers explain why as much as $80 billion in potential energy saving opportunity remains untapped including:
- Lack of expertise and/or the necessary bandwidth to take on energy efficiency solutions;
- Increased complexity of buying, contracting or otherwise acquiring energy given the myriad available options;
- Lack of energy focus and/or access to funds; and
- Concerns about the risks associated with major energy efficiency investments, payback period and the impact of change on day-to-day operations
What is the best way to actively engage C&I customers to capturing energy efficiency opportunities? The answer, according to Saverio Grosso, vice president at ENERActive Solutions, an Edison Energy company, starts with identifying the extent of cost-effective energy savings in their business. They would develop a roadmap that identifies the necessary steps needed to capture the savings that will lower energy bills, create a more efficient operations and lower carbon footprint
Grosso says, “Calculating the energy savings potential during a study can be challenging due to the vast number of variables that can impact implementation; both known and unknown.” He said that 15-20 percent of savings can be achieved through low-cost solutions with a payback of less than 3 years.
Deciding how to buy and use energy wisely was never easy, but it has definitely become more complex and risky, particularly when a company’s operations are spread across a wide geographic footprint each with different tariffs and regulatory policies.
The key to using energy efficiently is to focus on energy as a service rather than energy as a commodity. For many large C&I customers, the best way to address these issues are to redefine the relationship between the energy user – the customer – and the energy provider. While the former is focused on achieving its operational goals and profit margins the latter is procuring and delivering the desired energy services to meet the customer’s total needs.
The goal is to simplify the management and use of energy for large energy users by focusing on services they need to achieve their operational goals while allowing the service provider/integrator to deliver results.
Fereidoon Sioshansi is the founder and president of Menlo Energy Economics.