The business of energy data

Energy efficiency—and the new products and analytics powering it—is on trend. Since 2009, the U.S. Department of Energy issued 34 new or updated efficiency standards covering more than 40 products. Late last year, California passed into law The Clean Energy and Pollution Reduction Act of 2015, calling for a 50 percent increase in building efficiency by 2030. California Assembly Bill 802 aids this effort by requiring utilities to deliver benchmarking data to building owners and operators. The latest White House initiative by The Better Building Program adds more fuel to the fire. It states that 18 utilities nationwide, serving more than 2.6 million commercial customers, will provide access to energy data building owners by 2017. 

Information is power, and is key to increasing awareness and meeting environmental goals along with cost-cutting measures. Greenwashing, in which U.S. companies have benefited from the PR of doing the absolute minimum to meet sustainability goals, is now out of favor. Companies and their customers want real action and measurable results. Industry and government-led programs are leading to a future where large buildings in this country by de facto are approaching LEED standard. American companies are starting to look more competitive to corporations in Europe, Australia, and other parts of the world which have a considerable head start on sustainability practices. 

For the U.S. business community, growing attention to energy efficiency will help on two fronts in the near term: better traction with sustainability goals and cost savings. In the long-term, more strategic use of energy data could deliver a real competitive edge in some markets. Getting access to reliable and consistent sources of utility usage data is an important first step. 

Finding the data

If your company files sustainability information as part of its annual report, you’ll need to include measures of carbon emissions, which can be derived using free tools that look at your various utility providers to compile the consumption data and calculate a score. The truth is it's a lot harder than most people assume it is to get good information from utilities, analyze and compare the data and build a single reliable baseline every year. If your company is global, it gets even more complex, as standards for meter reading can differ from region to region. 

Like everything else, the world of big data technologies is starting to ease this pain.

New technologies offer the promise of streamlining data collection, which has historically been a manually-intensive process. This is a boon to the sustainability reporting team who must otherwise gather the data separately from other departments or each utility and then manage that data in complex spreadsheets. Now, analytics software can take automated feeds streamed directly from the utility, aggregate it and normalize it to produce a single and clean stream of energy consumption data across multiple facilities. This shifts the conversation from “how can we get the data” to “what does the data mean and how can we leverage it to improve our organization’s sustainability performance?” 

Beyond compliance

Once you’ve achieved a baseline for energy consumption across your company, useful for financial and industry reporting needs, it’s time to look at how else this data can help your business. First, with an accurate baseline, you can create a working budget and forecast needs appropriately. But that’s just the first step. Now, you can begin to analyze all of your facilities to see if there is room for improvement in terms of building relocation, redesign and/or renegotiation of plans with utilities. 

You may find that some facilities look very efficient, and others less so. Categorize your buildings from a usage intensity perspective so that, moving forward, you can compare apples to apples. It may be possible, for instance, to re-locate departments with the highest or unpredictable energy demand and usage to facilities where the power is markedly cheaper.

The analysis can cut many ways, through looking at differences in facility consumption by region, design, and/or business purpose. You can begin to ask questions, such as, are there some markets from an energy perspective that are much less expensive? Are there designs that are much more efficient?

Suddenly you have project ideas and improvement ideas. You have best practices and worst practices. With further analysis, you can find ways to save energy and money on an ongoing basis. Analyze the results of your energy profile against your business profile and customer needs. If your business is such that it can exist anywhere, consider if moving to a different region can make a measurable impact. 

Pricing can differ drastically from area to area: You could pay four cents per kilowatt hour (KwH) in one region and 34 cents in another. Take a look at basic metrics such as demand values and load factor, not just price per unit; no matter your situation, most companies can lower costs and usage by 3 to 5 percent a year with a modest amount of effort.  

And that’s just the start. Let’s say you look across your portfolio, and for 150 locations in North America you have 90 different tariffs. That wide variation in tariff profiles might be appropriate if all of your facilities are different in terms of role and functionality.  There may be manufacturing assets, distribution hubs, data centers, Class A, B and C office space, and so on. On the other hand, if you have more uniform function across your enterprise you should see similarity in best-fit tariffs across regional lines, and overall less variation. Furthermore, facilities and assets that are functionally similar but differ in age (10 years to 30 years old) may offer opportunities in tariff matching as newer engineering designs, standards and equipment are applied as part of modernization.

We are just at the cusp of understanding the power of energy data. As more and more types of data flood the market, with increasingly better tools to analyze that data in real-time, companies will at last get a better handle on how to manage consumption for both business needs and sustainability goals.

Sanjoy Malik is CEO of Urjanet.