Follow the Money
Phil Adams | April 21, 2011 at 1:50 pm
Two recent articles highlighting strategic thinking about energy management caught my eye, and I wanted to share them with you. The first talked about how every company is an energy company, with the thesis being that with rising energy costs, opportunities for savings on pricing, ability to reduce quantity used, incentives proliferating in the smart grid and renewables spaces and expected regulation on carbon, companies can gain competitive advantage by looking at energy more strategically and holistically.
At World Energy, we couldn’t agree more. Our launch of a new virtual energy audit product and addition of demand response as a product on our World Energy Exchange® signal our move from just the pricing side of energy management to both the quantity and incentives sides, too. Our belief can be set forth in a simple equation.
Energy Costs can be represented by P * Q – i. Price times quantity used minus any incentives.
In addition to the Forbes post mentioned above, Bloomberg Markets wrote a compelling feature on how KKR is thinking along the same lines. They’ve hired an energy expert at their headquarters to optimize energy costs across their entire portfolio of companies. By breaking down the fiefdoms at each company, they’ll be able to leverage purchasing power and share best practices.
This is all great to see, and we wouldn’t be surprised to see more companies adopting this behavior.
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