Escalating Energy Consumption– Are You Planning Ahead?

Electricity use is projected to steadily and substantially increase over the next 25 years.  This will not only impact your business bottom line, but also how your business operates.  You need to start taking steps today in planning for this eventuality.

Don’t be fooled by the temporary decline in electricity demand as we make our way through the worldwide recession.  Electricity demand, tied directly to economic growth, is projected to reach pre-recession levels by 2012 as economies rebound.   Consumption of electricity is estimated to almost double by 2035 from levels experienced in 2007.

What is driving this explosion?  Industrial consumption will grow in proportion to post-recession industrial output.  Consumer electronics consumption is projected to increase threefold over the next 20 years.  Electric vehicle adoption will develop a new electricity consumer.

Utilities are trying to delay the eventuality of building expensive new power plants.  Capacity must increase to meet future demand.  Steps are being taken today to curb long-term peak demand.  Utilities are educating customers on conservation, providing incentives for energy reduction, and moving to demand-based pricing schemes to drive reduced peak demand.

Organizations working in partnership with their utilities can actually reduce their electricity expenses, while organizations not working in concert will experience significant cost increases.  Utilities with demand-based pricing models charge different rates to customers based on their usage profile: overall consumption level and when electricity is consumed.

What you should be doing

  1. Audit Consumption – Learn where you are consuming electricity in your business.  The three largest consumers of electricity are HVAC, lighting, and office equipment.  Utilities and ESCOs (Energy Service Companies) offer programs to assist in this analysis.  For a do-it-yourself approach, purchase an inexpensive meter and check your office equipment.  You will be shocked.  Electricity cost is approximately $1/Watt/Year (at 11.5¢/kWh).  A desktop computer with monitor and full accessories consumes approximately 250 watts annually ($250/year).
  2. Eliminate Unproductive Consumption – Walk around your office and do a quick assessment.  How many lights are on during non-business hours?  How many are on in unoccupied meeting rooms and offices during business hours?  How many computers and monitors are fully powered during non-business hours or when the user is away from their desk?  Reduce unproductive consumption by using available automation to control office equipment and lights. Significant energy is consumed without business productivity.
  3. Utilize Remote Workforce – Encourage employees to work from a home office when feasible.  This is an employee benefit and a huge potential business savings.  Eliminate wasted electricity to power excess computers, office lights, and HVAC.  Office space requirements may also be reduced as a by-product, resulting in large additional savings.
  4. Shift Work Schedules – Review work schedules throughout your organization.  It will become increasingly advantageous to reduce your peak demand and electricity use during peak demand hours.  Is it critical that all departments work the same business hours?  Is it critical that everyone in a department work the same business hours?  Moving toward a flatter demand curve and use of electricity outside of peak demand hours will lower your electricity rate.
  5. Reduce Internal Servers / Data Centers – Maximize the use of newer technologies such as cloud computing and server virtualization for sizeable energy savings.  Outsource your data center as an option to reduce energy costs. On-premise servers represent a significant cost to the organization for hardware, maintenance, and additional HVAC.
  6. Rebates/Rebates/Rebates – Take full advantage of utility rebates before they expire.  Rebates are available for efficiency upgrades in lighting and HVAC.  Rebates for PC power management are also available from many utilities.  Utilities promote energy demand reduction through rebates.  Many rebates go unused and programs expire.  There is no guarantee that a particular rebate will be available in the future.

The bottom line is to create a plan to systematically transform your business into one that is less sensitive to future electricity price increases and demand-based rate models.  Some improvements require business process change, while others require capital investment.  Many, such as PC power management, require no investment and save electricity costs immediately.  The key is to start taking action today because implementing all measures simultaneously will be unfeasible.  Start with actions that have immediate payback and use savings to pay for additional improvements.  Don’t be the organization scrambling in crisis mode once new rates take effect.

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