Studies
show that companies actively pursuing a renewable energy strategy appear to be
financially more profitable than their competitors. Companies that have a
balanced and integrated approach to energy procurement will be better able to
balance cost, risk and reliability while meeting their sustainability goals. To
steer the effort, a renewable energy sourcing
strategy
is an integral component to any sustainability program. While most companies
know they should have such a strategy in place, many may not know what goes into
developing and implementing it. For instance, 48 percent of Fortune
500
companies have sustainability goals, but do they know what it takes to meet
them?
Getting started
A simple, one-size-fits-all approach to sustainability will not work for all
companies — an organization may have multiple sites in different locations that
might not be suitable to sustainability efforts such as sourcing from a single
solar or wind farm. Conditions at every site are unique, with different
consumption patterns due to age, design, equipment, install and replacement
strategies. Facility managers don’t apply the same strategy to each of their
facilities for operational repairs or equipment replacement; and similarly, it
wouldn’t be effective to take a blanket approach incorporating renewable energy
options into their energy-management solutions.
So, how can companies get started developing their renewable procurement
strategy? It requires taking a holistic approach to their overall
energy-sourcing strategy, combined with a practical application of that
strategy. It’s a balancing act to combine traditional procurement of fossil
fuels-based energy, renewables and distributed generation based on their larger
organizational goals. Companies should start with these five steps to begin
developing their strategy:
1. Conduct an energy consumption analysis
First, companies should conduct an analysis of energy consumption at their
sites. The analysis can confirm what their energy footprint looks like, what
business operations contribute to energy consumption and where these
activities occur. Companies can learn whether they control the usage
processes impacting their energy footprint and can help influence their
plans to change wasteful processes, business focus and facilities
management.
2. Understand the key renewable energy factors
When companies begin to build their renewable energy procurement strategy,
they need to understand their company’s energy footprint and current
sustainability goals, and map to them about what’s important to their
business such as marketability or credit rating. Companies typically look at
12 key factors when making renewable procurement decisions:
Different renewable solutions will have different implications for each of these
factors. When sustainability managers better understand the implications, they
will improve their position to develop the right strategy for the near and long
term.
3. Ask for help
Companies should look for help from outside experts. Renewable solutions in
the market are varied, and new
solutions
are being launched all the time. This means sustainability managers need to
navigate the market for solutions that can obtain executive support and
still have manageable risk down the road. It might require working with
experts who are knowledgeable across regulated and deregulated markets, as
well as different technologies and how to contract for those solutions.
4. Listen to customers
In its 2019 Retail and Sustainability
Survey,
CGS — a global provider of business applications, enterprise learning
and outsourcing services — found that more than two-thirds of respondents
consider sustainability when making a purchase and are willing to pay more
for sustainable products.
5. Ensure strategic alignment
It is important to have a renewables strategy and implementation aligned
with the company structure and decision-making model. Companies with a
centralized structure can closely track the sustainability impact across
multiple sites but run the risk of having one rigid plan that might not work
across different locations, or companies with a decentralized structure
might execute one plan with a high-level of autonomy for individual
locations. Both paths are valid if the larger organizational level metrics
are defined and monitored closely.
5 processes to guide the strategy implementation
Once companies have their strategy and plan outlined, they can use the following
processes to begin implementation:
-
Data — Reviewing internal consumption data can help sustainability
managers get a clear picture of consumption at each site level across their
portfolio.
-
Execute on strategy — Running an unbiased process of evaluating RFPs;
developing external relationships that help vet partners who can further the
company’s renewable strategy, pursue near-term wins that capture the higher
value, higher visibility characteristics of the renewable strategy; and
sharing with executives or strategy sponsors to try to align with resources
to execute against the larger strategy goals.
-
Monitor and measure — Continually monitoring progress and measuring
success allows companies to be nimble and adjust strategy midway through
implementation.
-
Collaborate and learn — Sustainability managers will benefit from
participating in industry or trade organizations that are also prioritizing
renewable energy procurement to continue to learn and collaborate about
procurement strategies.
Every company’s renewable energy strategy should focus on setting goals that
best achieve the intention of the strategy. It is a rare company that only has
one interest driving its strategy to source renewables — because price, term,
volume, operational requirements and market availability of renewable solutions
based on geography and capacity are all likely considerations of an effective
procurement strategy. While the timing to move to procuring renewable energy may
be right due to customer demand, potential government incentives and having the
resources to help, companies should understand that it’s okay for companies to
take the time they need and make small changes to their processes at a time to
make a big impact.
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Director of Product Management, Energy Intelligence Services
ENGIE Impact
Published Aug 8, 2019 8am EDT / 5am PDT / 1pm BST / 2pm CEST