Energy suppliers can help businesses cut costs and adapt to changing energy management demands by offering energy as a service, explains Ashley Phillips.
04 September 2018 | Ashley Phillips
Aligning energy management with business strategy can be advantageous. A 'green' ethos through energy management could appeal to customers and stakeholders, and attract new recruits.
Operationally, it will streamline processes and maximise productivity. But business energy customers say the main obstacles to smarter energy management include:
- Lack of expertise;
- Headcount; and
- Capex.
Energy as a service (EaaS) addresses these challenges, and focuses on commercial resilience and immediate impact on the bottom line.
The ideal solution is tailored, accounting for your energy ambitions and delivering an integrated solution. This might include trading advice and risk management or flexibility solutions, alongside project management of energy efficiency or on-site generation schemes, as required.
How does it work?
EaaS allows organisations to hand over all or some of the risks of energy management.
A supplier might provide investment for energy projects or take on complete responsibility for planning, building and maintaining energy assets. Or it might mean relying on their trading expertise to get the best price for energy and generation.
The right EaaS provider will implement cost and carbon savings through efficiency projects or a move to renewable energy; identify revenue opportunities like flexible consumption; and initiate longer-term energy projects such as on-site generation - without additional resources or investment.
Here are five benefits of adopting an EaaS approach:
1) Cost savings
Savings can come through implementing flexibility solutions such as National Grid schemes or supplier initiatives such as the Renewable Balancing Reserve, or accessing trading expertise.
Energy flexibility may also earn revenue by turning use and generation up or down during times of imbalance on the grid.
EaaS in action
Milton Abbey, an independent school in Dorset. Aware of its environmental responsibilities, it needed to lower energy use, make energy savings and reduce its carbon footprint.
Ørsted has taken over management and maintenance of the school's heating system, including three biomass boilers.
The 18-year agreement includes sustainable sourcing, on-site generation and storage to optimise the school's energy estate.
The tailored EaaS solution has helped Milton Abbey use energy in a smarter way, optimising its heating system's performance by 35 per cent.
2) Minimise risk
If budget is a problem, your EaaS partner may be able to assist with upfront funding and take care of investment in energy assets and infrastructure to help customers reduce risk. Seek a supplier that can mitigate operational, regulatory, market and asset risk.
3) Meet CSR targets
Your EaaS partner can help to assess energy projects, select the most suitable and deliver value.
By installing and optimising the right generation and consumption assets, you can reduce CO2 emissions and meet your CSR targets.
If premium-free green is an option with your supplier, do this too. Sustainability is important to customers and stakeholders - our green attitudes survey showed 73 per cent of customers prefer to buy products from companies powered by green energy.
4) Save time and resources
Some EaaS providers can install, operate, own and maintain your energy solution (and equipment) and provide reports on the cost and carbon impact. This results in more time to focus on other business outcomes.
5) Invest for the future
Your supplier may be able to help shoulder the risk and reduce operational cost, which will contribute to safeguarding your business and boosting commercial resilience.
It will also mean that you stay ahead of changes in the energy marketplace and implement more sustainable practices as they arise.
Ashley Phillips is sales and marketing director at Ørsted UK.