ENERGY S SET TO INCREASE
react effectively and manage their exposure to these risks as they evolve. There are five key ways that businesses can seek to improve their energy management strategy: • Assign clear roles and responsibility, and set target for energy management, energy consumption and energy efficiency
• Make energy and carbon a board-level or senior management concern
• Take advantage of energy management services and products offered by the market
• Conduct an energy audit to gain a head-start on energy efficiency
• Explore the possibility of, and any available government incentives for, renewable energy production on-site.
HOW YOUR SUPPLIER CAN HELP Clearly there is much that businesses need to do to manage the risks they encounter as a result of energy use; but the responsibility for the solution does not solely lie with them. Energy suppliers will be called upon to help businesses face an increasingly complex energy environment. No longer can we just simply supply energy; suppliers now need to help businesses to manage their consumption and procure energy in as cost-effective way as possible – to ensure their survival. This is a journey that npower is already on. We view ourselves as our
customers’ energy consultant, not just their supplier. We provide many products and services to help us broaden our ability to act as an energy supplier, adviser, market expert and risk consultant. Our r3 (risk, review, respond) risk- management programme offers a tailored approach that helps organisations to make better and more informed energy buying decisions. For example, our Policy Shaper service helps energy managers understand their company’s risk profile and the market conditions in which it operates, enabling it to deploy best practice risk management techniques. While our Optimisation Desk service provides flexible contract customers with access to an experienced and dedicated team, who can assist and support them in formulating and operating their individual risk management strategy.
Through our m3 (measure, monitor, minimise) programme we can help businesses define their priorities, and then support them on the journey towards long-lasting and sustainable carbon and cost reduction. Our encompass service gives companies accurate and timely information on their energy consumption, providing them with the data they need to implement cost and CO2
reduction
policies. In addition, CRC Assist offers a full service provision. Covering everything from compliance to implementing a full energy management strategy, for organisations or companies affected by the CRC.
Most importantly, we can help businesses develop an integrated energy policy that brings together energy management and procurement. We are committed to assisting both departments in developing a collaborative strategy to manage energy consumption and purchasing, as both are intertwined and one affects the other.
THE FUTURE OF ENERGY RISKS The key thing to take away from this new white paper is that the risks associated with business energy use are increasing. Energy prices are becoming more volatile and increasing regulation is placing further administrative burden and reputational risk on businesses. As a result it is more essential than ever that organisations take action to manage energy risk. To ensure they are best-placed to manage energy risk, businesses need to make energy a board- level priority and work to develop an integrated strategy. This will be a step- change for many, but it is crucial that the different people and departments that are responsible for energy work collaborate and take advantage of the products and services from suppliers that are available. It is crucial that businesses do this now so they can take advantage of cost and carbon savings and the reputational benefits of successful regulatory compliance and energy management. The white paper – Energy Risk Management for UK Business – can be downloaded at
www.npower.com/whitepaper
as planned, and electricity prices become more volatile as a result, then the pay offs from these forms of purchasing could become much more attractive.
Utilities Water companies, which are heavy users of power, like to match their five- year regulated prices with similar terms of energy contract. One of their aims is to anticipate future price changes when, in a couple of years’ time, they start to negotiate future water prices. Water companies also hold a lot of power generation assets
themselves.They have the opportunity to manage all these generation assets and some fixed and variable elements of power and heat
demand, in what becomes a complex energy and carbon management operation. Some water companies may be large enough to tackle this task themselves, but others may prefer to outsource it to their suppliers.
Like water companies, telecoms firms may discover opportunities for load management and provision of short-term operating reserve, because both have on site generation. The water industry also has further flexibility in its demand profile which could also be a source of value.
Public sector
The public sector is facing tremendous budgetary pressures and has been re- organising its energy contracts using more
centralised and collective purchasing. Some public sector organisations may review their preferred supplier and be seeking out best energy purchasing practices as a way of finding cost savings. The public sector places importance on achieving budgets, using hedging and risk management strategies to give certainty to expenditure. In this regard, it is perhaps more risk averse than the private sector. Since the public sector is mainly a service provider, there is little scope for load management, although on-site generation provides opportunities for additional revenue generation and cost control, and renewables feed-in tariffs may offer an opportunity for positive investment.
SUSTAINABLE FM | NOVEMBER 2010 |47
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