Everywhere you turn, energy is in the news again. Recent fuel shortages and new geopolitical crises have raised the energy inflation ghosts of the 1970s. And as oil and gas prices spike, they pierce businesses and households alike, causing severe economic pain.
But today, we have more tools to respond. Energy management no longer requires large capital investments in engineering equipment to make significant savings in costs and emissions. Mature and proven digital solutions offer an alternative way for businesses to save costs and emissions quickly without using up scarce investment capital or enduring the lead times of a stretched supply chain.
In this article, we’ll explain how these digital tools can deliver by:
- providing insight into energy savings opportunities
- matching energy supply more precisely to demand
- operating existing equipment more efficiently
- helping consumers take more control by participating in the low-carbon markets of net zero energy systems
How much energy can be saved?
From today’s vantage point of soaring global energy prices, it can be hard to believe that energy has not been a focus for most industries. But the reality is that energy has not been a major cost for most companies for a long time. In a typical year, energy costs average just 5% of total production costs and so have received an equally small share of the investment attention. Over time, this trend has resulted in energy management receiving only a small share of investment attention.
But these are not typical years. Energy-saving projects in normal times reduce costs between 10% and 20%. Today these savings could amount to even more.
Climate and sustainability issues are also focusing the attention of companies on energy. About 80% of the world’s annual greenhouse gas emissions are related to energy use in some way. Companies seeking to reduce their direct emissions must make energy-saving projects the cornerstone of their reduction strategies.
The upside of this historical lack of attention is that many previously ignored opportunities to save are waiting to be found again. The opportunity for energy saving is so substantial that the International Energy Agency terms energy efficiency the “first fuel.”
What is different about digital energy management?
Just a decade ago, energy management was a highly manual process. Specialists visited sites to take measurements of operating equipment using handheld and temporary sensors. Data analysis was carried out in spreadsheets, and a static opportunities register was constructed. Even with these limitations, significant energy savings were achieved—but in a well-documented rebound effect, energy use at any given site would creep back up as behavioral resolve waned, organizational attention shifted, and equipment performance declined.