3 Trends to Watch in Strategic Energy Sourcing

Ma-Keba Frye  |  March 13, 2020   |  Energy & Sustainability  

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As energy prices continue to rise, strategic energy sourcing is both critical to manage and is constantly changing. As energy procurement professionals look ahead to the future, here are three industry trends that will impact their roles: 

Importance of peak demand

Peak demand charges typically make up more than 30 percent of a company’s total electricity bill. This proportion is expected to increase; many organizations are seeing peak demand make up more and more of their monthly bills each year. To make matters more complicated, peak demand hours are also changing. In California, due to the advent of solar energy, peak periods have shifted from 11 am – 6 pm to 4 pm – 9 pm. 

Strategic energy sourcing managers need to stay on top of these changes in order to keep costs stable. Unfortunately, depending on how they track energy consumption and spend, they may not have the visibility they need. Without line-item detail from utility bills on on-peak, off-peak, and mid-peak charges, energy procurement professionals can’t continuously monitor peak demand – and find ways to reduce it.  

Read more >> 7 Reasons You Need More Granular Energy Data

Electrification

By 2040, EVs could make up more than 50 percent of passenger car sales. Companies are also beginning to make the switch to electric vehicle fleets, as pressure from consumers and local governments begins to mount. EVs are an important piece of many companies’ sustainability strategies; according to the EPA, transportation currently accounts for almost 30 percent of all greenhouse gas emissions in the U.S. 

By 2040, EVs could make up more than 50% of passenger car sales.

Industry leaders like UPS and Amazon have placed large orders for EVs to reduce both operating expenses and emissions. When other businesses take on the challenge of electrification, they’ll have to reassess how they source energy, too. To have enough capacity to charge EVs, and ensure that capacity is used during off-peak hours (or with alternate power sources), energy professionals will need a comprehensive plan in place. 

Renewables commitments

In the U.S., more than 150 cities, states, and territories have committed to a 100 percent renewable energy target. Companies across the globe are following in their footsteps: Apple has met its target of 100 percent renewable energy, while Facebook and Amazon have surpassed their initial goals of 50 percent and are now aiming for 100 percent renewable energy. 

The “Greta Thunberg effect,” combined with pressure from employees and investors, is expected to cause more corporations to set similar renewable energy targets. But as many energy professionals know, half the battle of 100% renewable energy is reducing overall energy usage. 

What does this mean for strategic energy sourcing?

Altogether, these trends mean one thing: energy procurement professionals need granular data to track these changes and successfully capitalize on them. As the director of facilities procurement at a large package delivery company said: “If you want to perform an accurate ROI calculation, but you can’t get to the actual bill increments and understand what you’re doing relative to that, you can project a return of 3 years and not get it until 12 years. You need that level of billing detail to understand what it is you’re trying to get a return on, whether it’s an LED upgrade, solar installation, or any energy efficiency effort.” 

“If you want to perform an accurate ROI calculation, you need to get to the actual bill increments and understand what you’re doing relative to that.”

Sustainability and renewable energy have become the standard for the world’s largest companies. To meet these tough targets, having the best quality information will be critical. Granular energy data plays a pivotal role in helping strategic energy sourcing managers stay on top of renewables targets, navigate peak load management, and meet the demand for electrification. 

 

Power your strategic energy sourcing with data you can trust. Speak with a utility data expert today to learn how to improve the quality of your energy data.

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About Ma-Keba Frye

Ma-Keba Frye is a Content Marketing Associate at Urjanet, assisting with content development and execution. When she's not writing, she enjoys reading, listening to music, and volunteering.


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