The maturing of energy deregulation is now allowing customers to drive market solutions. In Ohio, this story started in 2009 as customers found savings by leaving utility generation and going to third party generation providers. Now, in order to keep their customers, these providers are beginning to meet market demands for more innovation. Here are three recent trends.
Holistic Energy Planning
With a competitive market comes choices. These choices can be overwhelming especially in a space that can include everything from usage data collecting gadgets to on-site distributed generation. The energy space is highly fragmented with experts focused on their individual solutions and services. From a customer’s perspective it can be extremely time consuming and frustrating to weed through all the solutions, pitches and expertise flying at them to find the perfect fit for their company.
As a result, we are seeing more customers stepping back from the chaos and developing overall energy plans. In this approach, key stakeholders develop an energy vision and mission for their organization that will then guide actions and initiatives. Such a framework establishes budgetary and sustainability goals, evaluation guidelines for new opportunities, methods to prioritize projects and a plan to communicate these guidelines throughout the organization.
While it may sound like more effort and resources to put such a plan together, customers are finding – in the long run – it is more efficient. The plan keeps resources focused and on track even when team members move in and out of the organization.
Divesting Customer Energy Assets
What was once a far-out idea is now coming more and more into the conversation. Some companies are contemplating selling their energy systems (e.g. company – owned substations, HVAC equipment, energy distribution systems) to energy companies and those energy companies, in turn, providing supply arrangements.
Such a deal was recently executed on a very large scale by Engie and The Ohio State University. In its very simplest terms Engie purchased the steam, chilled water, electricity, gas systems from the university for a little over $1 billion. Engie will then optimize those systems and charge the university for energy and other services on a monthly basis over the course of the next 50 years.
Obviously, this is the King Kong of deals but this transaction can be scaled to meet the needs of manufacturers with aging energy infrastructure. This construct is getting the ear and interest of those in the finance departments who manage capital budgets. As with everything, the devil is in the details of these complex transactions to make them work for both parties.
Engagement Around Consumption
It is nearly impossible to measure program results without clean, consistent and accurate data. Sleek and frictionless energy platforms are challenging the status quo of data delivered on our energy invoices. Many customers are seeking alternatives to pdf versions of invoices, key punching data and tracking data through spreadsheets. This is even more critical when companies have ENERGY STAR® and sustainability goals that require benchmarking metrics.
Customers are now demanding platform solutions that will store, track and audit these data while seamlessly connecting with ENERGY STAR Portfolio Manager®. This type of solution allows the customers to finally have the reporting options they need to drive behavioral change, capital spending and project prioritization.
Additionally, some consumers are analyzing not just what happened in the past via their invoice but how can they impact consumption on a real-time basis. Customers who want to control not just energy peaks but find anomalies in consumption are moving to more real-time monitoring. Insights can be used to not only track the health of equipment but also of unexpected human behaviors impacting energy consumption.
We are past the tipping point with customer driven solutions and this market will continue to innovate to meet consumer demands.