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Start realizing untapped savings opportunities and tame volatile energy costs. Although many organizations have implemented short-term measures to address energy costs and sustainability commitments, these efforts are largely falling short.
Energy and utilities represent a significant and highly volatile area of expenditure for most businesses. However, traditional energy management approaches frequently fail to deliver sustainable results. Corporate management teams are feeling relatively helpless because of the perceived inability to proactively manage regulated energy costs and are therefore exposed to risk.
In this article, Accenture looks at why traditional approaches are failing, and outlines an active energy management approach that changes the game and generates sustainable energy cost reductions.
Our benchmark data and research indicates that for most organizations, 50 percent of their initial energy savings disappear within the first six to 12 months due to lack of continuous monitoring, analysis, and corrective action. However, significant opportunity to deliver value remains. Analysis from the U.S. Department of Energy indicates that organizations that embrace continuous monitoring and active energy management practices can capture 15 to 40 percent energy savings.
A review of more than 100 organizations and their practices reveal that most take three common actions to address the energy management challenge:
Conduct an energy audit: To establish an energy consumption baseline—a basic requirement for successful energy cost optimization— organizations deploy monitoring devices to measure energy usage from the facility level down to the machine level.
Implement audit recommendations: After assessing energy consumption levels and trends down to the machine level, managers can implement process changes to optimize energy consumption. Actions may range from policy formulation (shutting down computers at night, turning off idle equipment, etc.) to automation (automatically turning off lights) to equipment optimization (changing set-points on heavy machinery and equipment).
Invest in high-efficiency equipment: With a full view of the energy consumption and equipment efficiency profile of the enterprise, organizations can strategically invest in high-efficiency equipment. These capital upgrades can lower energy consumption and may also qualify for rebates and incentives that can significantly enhance potential return on investment (ROI).
Accenture recommends that organizations recognize where initiatives fall short, apply integrated Active Energy Management to stop the bleeding and address traditional energy management shortcomings:
Get persistent: Apply “Active Energy Management” and take monitoring from a onetime activity to an active, ongoing analytical competency.
Go deeper: Use machine-level consumption data to drive sustainable process optimization.
Leverage insight: Use energy demand insight to enhance capital investment decisions and capture incentives and rebates to drive higher ROI.
Many managers consider high energy spend as an area that cannot be addressed due to market regulations and commodity volatility. However, with continuous monitoring and Active Energy Management programs, leading organizations can obtain substantial energy cost savings through better energy demand management, sustain those savings through ongoing monitoring and optimize energy purchases with deep market intelligence.
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