When it comes to the energy crisis, we’re all feeling the heat. Not literally, of course. Far from it, in fact. But while millions of homeowners are wandering around with hats and gloves on inside, simply turning down the thermostat is not an option for many of Europe’s companies as they dig in for a hard winter.
With energy prices soaring to unprecedented highs after Russia’s invasion of Ukraine, the next few months have become a matter of survival. But it’s not all one-way traffic to darkness and despair. Instead, some businesses are turning to coal and other fossil fuels to get them through the winter, while others talk optimistically about the green revolution that the crisis is spurring.
It’s a scenario that has driven alternative approaches to energy management to the fore and the reason we’ve created our most recent white paper on Smart Energy Management.
Panic Has Galvanised Governments
The energy crisis has quickly risen to the top of the European ‘to-do’ list. While still divided on the issue, the EU is seeking to coordinate action on gas price caps, and nations across Europe are taking what they deem as being the most appropriate route through the crisis.
Germany and the Netherlands have reached gas storage targets set ahead of schedule. Italy and France have turned to Algeria to diversify their supplies. The UK has given its major gas supplier Centrica permission to reopen a North Sea storage facility. Earlier this month, the European Commission president, Ursula von der Leyen, proposed offsetting the hit by capping revenue from low-cost electricity generators and forcing fossil fuel firms to share the profit they make from soaring energy prices. As this academic observes, panic has at least galvanised governments into action.
And not a moment too soon. High prices are starting to bite businesses, which will inevitably have a trickle-down effect on us all. Some are closing or reducing production as a result, leading to job losses. For example, industrial production in the euro area fell 2.3% in July from a year earlier, the biggest drop in more than two years. Indeed, the Bank of England recently went on record to suggest the UK is about to enter “the longest recession since records began.
Necessity is the Mother of Invention
It’s painful, expensive and incredibly damaging on every level but… what is it they say about necessity being the mother of invention? In the face of such relentless pressure, there are businesses out there finding ingenious ways to reduce energy use.
French carmaker Renault, for example, is reducing the time it keeps paint hot — a process that accounts for up to 40% of its gas demand, as reported in the Financial Times. Pelliconi - an Italian company that manufactures 35 billion bottle tops a year for companies like Coca-Cola, Heineken, and Guinness - stepped up production of energy-intensive semi-finished goods, invested in solar panels and commissioned a prototype of a new digital printer for metal sheets that did not require gas ovens.
These are just two examples of many. And whatever and however businesses are coping, the objectives are the same:
- To find ways to maintain operations now
- To reduce exposure to energy volatility, and;
- To invest in tools and technologies to prevent a similar situation from arising again
No Silver Bullet Solution
To meet these objectives, users, business leaders and shareholders must understand the opportunities that will come from:
- Clean technologies
- Adoption of effective energy management processes, and;
- Evolving interactions with electric utilities and the grid.
When it comes to effective energy management, there is no silver bullet or one-size-fits-all approach, but a series of fundamental elements that the most effective strategies will include.
What Organisations Must Do to Succeed
This includes initiatives to stabilise prices. This will require organisations to examine their historical consumption, costs, emissions, and other data to establish a baseline from which they can improve performance. It will also require that they define their mission, set targets, and continuously measure progress toward those goals - all part of a long-term smart energy management plan.
At the same time, businesses must accelerate efforts to decarbonise. Many organisations have committed to carbon-neutral goals but implementing changes quickly will mitigate exposure to expected price increases in the short term while safeguarding against volatility in the future.
These changes are both technically and financially attainable, though they will require aggressive schedules, reallocation of resources, and prioritisation for the highest-impact energy efficiency projects.
Smart Energy Management System is Central to Success
Central to all of this is a smart energy management system. This can help organisations monitor, measure, and optimise energy consumption in their buildings, factories, or facilities. It can accomplish this by connecting all electricity-consuming systems -- like manufacturing equipment, storage units, offices, meters, and lights – to sensors and other devices that will aggregate and analyse the data.
As well as centralising energy data to identify and lower areas of excess consumption, the right tool can also monitor and target energy consumption to help meet carbon neutral goals and combat rising energy costs. Using this as a base will also improve overall energy management strategies.
Effective Energy Management is More Attainable Than Ever
Energy management is no longer a nice-to-have for modern organisations – it is a have-to-have. It is key to remaining competitive, reducing costs, maintaining resilience, and meeting ESG goals in the face of unprecedented price surges, sustainability pressures, and difficult-to-achieve digital transformation goals.
The good news is that effective energy management is more attainable than ever thanks to Industry 4.0 technologies, smart energy management systems, and emerging opportunities in the renewable sector. This, combined with a keen understanding of the current energy landscape and what strategies must be implemented, will be the key to effective operations in 2023 and beyond.
For more information, you can download the report here. Alternatively, get in touch with a member of our team who will be able to guide you through your energy management journey.
