Seeing opportunity in volatility

Andrew Horstead -

The proverb that necessity is the mother of invention is being borne out by the innovative approach many organisations are now taking to energy. Rising bills, environmental concerns and greater volatility means energy is no longer just another business cost but a key risk which needs to be addressed.

The sessions Utilyx hosted at the Green Corporate Energy event recently highlighted some of the many solutions being explored and developed in response to the challenges faced.

We had posed the question : ‘Are you ready for a more volatile energy world?’ and looked to draw on the experiences of those taking part to identify the key measures that businesses can take to minimise risk and maximise opportunities.While the approaches being taken may differ from company to company, all were in agreement that organisations will have to deal with more volatility in the future.

International tensions, growing global demand and domestic policy upheaval were among the factors seen as contributing to that.

Although greater volatility does pose obvious challenges, it was interesting that those attending our sessions concluded that overall it was a positive development in that it would ensure energy was on the risk agenda for businesses and also encourage innovation.

The most obvious step identified to reduce the impact of volatility was to reduce demand and there were some compelling examples of the success that behavioural initiatives and energy efficiency can have.
Demand response is also seen as an important tool with many companies looking to develop solutions to meet their energy needs without increasing risk.

Examples cited included combined heat & power solutions using ground source heat pumps, energy storage linked to renewable generation and even hydrogen fuel cells. While demand response is generally seen as a positive approach, there were some concerns expressed over the carbon intensity of some of the back-up generation equipment in use.

The potential for advances in technology to help organisations get more from their energy is exciting but many at the sessions also stressed the importance of having the right data to be able to make an informed case for investing in them.

Accurately monitoring energy consumption across operations and being able to identify patterns and trends is vital. As The Energy Investment Curve tool launched at the event also highlighted, paybacks from different energy technologies in different scenarios can vary dramatically depending on many factors.

The sessions also highlighted the need for energy to be seen as an issue which increasingly impacts right across a business. Disruption from interruption to supply for example could damage brand and reputation. The lack of a sustainable procurement strategy could risk customer loyalty.

Rising to the challenge of a more volatile energy world will require buy-in from right across an organisation.Without proper staff engagement from the shopfloor up, energy efficiency measures won’t deliver on their full potential. And unless senior management are fully involved, backing for major capital investment in energy efficiency or onsite generation is unlikely.

Most of those in the audience at our sessions were managers on the frontline of dealing with energy within their businesses. It’s clear that the need for them to effectively communicate issues to colleagues, board members and shareholders will be increasingly important in a more volatile energy world.