Ashley Phillips, Sales and Marketing Director at Orsted Sales UK
A record level of change in our UK energy marketplace is forcing energy users of all types and sizes to sit up and take notice. Managing rising costs is always a key area for focus. But today’s energy managers already have a deeper understanding of the changes afoot and will be taking a more nuanced approach. One that takes commercial resilience into account, along with the more immediate impact on their bottom-line.
The changing role of an energy manager
The scope and breadth of an energy manager’s role has changed dramatically. It’s all thanks to our evolving energy infrastructure, shifting regulatory obligations and changing technological landscape. The changes we’re seeing across our energy infrastructure are incredibly positive ones, that support our nation’s move towards a cleaner, greener energy future that is stable, sustainable and cost-efficient for us all. Nevertheless, across the board, the already multi-faceted role of energy manager seems to be expanding in the face of decreased team sizes and tightening budgets. Add to this the fact that a strategy for managing energy spend, which accounts for a significant proportion of annual running costs, is often now integrated into a wider business strategy and it’s easy to see why the UK’s energy managers are increasingly important and increasingly busy. Never has the need to be proactive and well informed been more crucial; never has the balancing act between budget, carbon targets, stakeholder expectation and resources been more acute; never has the need to interact with the marketplace – rather than remain a passive consumer – been more critical. In short, the pressure is on.
Help is at hand
So, as an energy manager in 2018 you are likely to be time-poor and have a wide and growing remit – but what can you do to ease the pressure? Many of those with responsibility for managing energy in their organisation are beginning to seek out ways to reduce their day to day burden as their responsibilities rise, as well as plan for a commercial and financial future which might currently seem quite difficult to predict. Thankfully, help may be easier to come by than you think.
As energy management increases in its complexity, some forward-facing energy suppliers are taking a more collaborative approach with their business customers. The provision of a range of different products and services that complement procurement strategies is helping businesses take their energy strategy to the next level; with increased involvement that goes far beyond a typical added value contract. Done well, this new approach to energy as a service can help organisations make light work of energy and sustainability goals. In the simplest terms, it’s about outsourcing some of the growing demands of energy management to industry experts. With a little help from their supplier, energy managers can plan better, optimise their assets and innovate more – without the need for more people or investment.
What is ‘Energy as a Service’?
When a customer chooses to use Energy as a Service, our first step is to work closely with on-site energy managers to gain a full understanding of their energy ambitions and unique challenges. From that we create a tailored, integrated solution that’s designed around their specific business needs. This could be a combination of energy efficiency measures and sustainable energy sourcing, or it might also incorporate flexibility, optimisation and embedded generation. The overarching aim will be to help businesses get maximum value from their energy assets, identifying revenue creation opportunities where possible. We can place a commercial value on the opportunity, providing the data energy managers need to get full buy-in from the board.
Tailoring the options
As part of Energy as a Service, we offer Energy Risk Management, using the unrivalled market knowledge from our trading team. We’ll also implement all energy management systems (EMS) to monitor energy efficiency. In addition, we offer bespoke tools such as Site Optimisation, to make sure operating plants run to the most cost-efficient schedules, and help customers unlock value from flexibility with Renewable Balancing Reserve (RBR). RBR helps businesses create new revenue, by participating in the imbalance market. For some, it may be the first step towards fuller participation in Demand Side Flexibility (DSF) programmes – the newer term for Demand Side Response (DSR) programmes.
For those businesses who want to develop on-site generation or have other energy projects in the pipeline, Energy as a Service can provide upfront investment, meaning that spend can come from OPEX budgets over time, rather than already stretched CAPEX. We can also project manage these initiatives, from planning through to installation and ongoing maintenance. The amount of control you hand over is up to you, but handing over more control also means handing over more of the accompanying headache.
Benefits for your business, the UK and the planet
The collaborative and supportive approach we take with Energy as a Service is one that we developed after talking to customers about their obstacles to smarter energy management; most often cited as lack of expertise, headcount and CAPEX. It’s the kind of solution we hope more suppliers will prioritise in the months and years ahead, because working together will be the best way to keeping growing economically and achieve a sustainable energy future for us all.
Collaborating with your energy supplier to create a fully-integrated energy strategy brings a host of wide ranging benefits for you and your organisation. Reduced costs are ever-important and can be delivered by combining energy efficiency with trading expertise and flexibility. You’ll also save on time and resources, by handing over responsibility for installing, operating and maintaining energy solutions and getting to be as hands-on or hands-off as you like. Risk can also be reduced when you don’t need to invest capital upfront. As well as handing over the funding responsibility to your supplier, it may be possible to hand over operational, regulatory, market and asset risk. Those are the kinds of risks we shoulder for our customers, to give them complete peace of mind and let them get on with the important task of running their business.
Last but certainly not least, collaborating with your supplier to create an integrated energy strategy can provide an important boost to your CSR credentials. By installing and optimising the right generation and consumption assets, and buying renewable energy, you can reduce CO2 emissions and more easily meet your sustainability targets. Sustainability is becoming increasingly important to customers, stakeholders and supply chain partners alike. Our recent survey provided an interesting insight into changing attitudes towards green energy, telling us that 86% of consumers believe it’s worth buying products made using renewable energy from retailers consuming renewable energy. Alongside our smart, green energy solutions, we’ve been providing businesses with 100% renewable electricity without any cost premium since 2016. When green is a commercially sound decision as well as an environmentally sound one, that seems like one less decision for busy and overstretched energy managers to make.