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How to create competitive advantage through energy cost reduction

By 29th April 2012February 15th, 2022No Comments

 

 

Posted by: Paul Foster

Significant increases in the cost of energy is a compelling reason for any organisation to reduce energy consumption. The good news is that energy cost reduction is relatively easy to achieve and can lead to significant bottom-line benefits.

Energy consumes 5 to 20 percent of overhead costs. This is spiralling upwards as tariffs continue to increase in 2012 and beyond. Organisations MUST therefore find a way of mitigating this in order to remain competitive.

Wake up ….you must pay attention to energy efficiency!

The trend is towards a cheaper, greener more sustainable future and you need an active corporate energy strategy.  If you don’t adjust, you may not survive as profits decline and you will find many clients who demand environmentally friendly products just going elsewhere.

Energy management is a serious issue

According to the Deloitte resources 2011 US Study, 90% of companies have set goals regarding electricity and energy management practices. 76% have goals related to reducing electricity cost/consumption and 71% have goals targeted at improving the efficiency of the building in which they operate. These goals are significant, typically aiming for an average of 25% in electricity or cost reduction, most often with a 2–3 year time horizon. 56% of the companies have goals aimed at improving profitability through electricity reduction.

What have you done?

Energy strategies are about hard-core business decisions and not fluffy green issues. You need to understand how to compete in a rapidly changing world, better asset utilisation, smarter use of technology and much tighter management of the entire supply chain.

Your future depends on it!

If you have an energy policy and strategy document, that’s a great start. You need to understand how to transform your organisation and have a plan in place to achieve it – otherwise you may not be around tomorrow.