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How Energy Demand Management Drives Business Value
Most of our customers spend hundreds-of-thousands – if not millions – on their energy usage every year. Energy is among the biggest cost categories for companies—along with people, product costs, and equipment—but it’s often the one category that’s not tracked and managed carefully. Without a solid Energy Demand Management strategy, you’re likely leaving huge savings on the table and missing an opportunity to reduce risk and maximize overall revenue.
CFOs and financial leaders are taking notice of this opportunity to create more value for their facilities and are moving towards developing a holistic approach to reducing their energy costs and improving facility operations. However, many companies lack good systems for accessing energy and operational data quickly or in a form that provides actionable information.
The right Demand Management solutions let you:
- Manage volatile energy prices to control price spikes
- Turn energy into a competitive advantage
- Generate revenue for your business
Take Control of Surging Energy Costs
Energy and production data provides a lot of information about how your business uses electricity. However, taking this knowledge a step further provides critical information that can help you make decisions on how to manage your investment through energy Demand Management (or shedding energy load during times of high demand from the grid).
The Electric Reliability Council of Texas (ERCOT) reported having a record-breaking peak electric demand on Sunday, June 12, 2022, of 74,917 megawatts, breaking the previous all-time peak of 74,820 MW that occurred on Thursday, August 22, 2019. The demand for more power – in large part from extreme heat and weather conditions – results in huge price spikes for businesses. These price spikes can wreck your bottom-line.
Energy Demand Management offers several options to control your total electricity costs, generate revenue, support grid flexibility, and enable your sustainability goals.
Ndustrial has a portfolio of Demand Management solutions to help you manage your load:
- Time of Use Pricing – All industrial customers are on some form of time-of-use rate, which means your electricity is more expensive during certain periods. It’s important to know when rates may spike or when there’s an opportunity for savings. Your monthly utility bill is not a fixed cost – you can make operational and investment choices to lower what you pay. Some examples include:
- Day-ahead pricing – where prices are only known one day ahead
- Real-time pricing – which can be determined on an hourly basis or even 15-minute increments.
- Demand Charges – Demand charges alone can account for 30-70% of an industrial utility bill. That means if you’re focused only on energy efficiency, you’re missing out on huge potential savings. Every industrial facility is charged not just for the amount of energy it uses, but also for the rate at which it uses. Demand charges apply to the user’s highest power demand in a given month.
- Coincident Peak (CP) Charges – These charges account for the utility’s periods of highest stress on the grid. A good CP solution can predict periods of grid stress 2-3 days in advance, giving users a chance to shift their usage accordingly. Doing so can save up to 30% on a user’s bill, plus it helps keep the grid stable for everyone else.
- 4CP Charges – Texas does everything a little differently, they have their own version of Coincident Peak called 4CP. The main distinction is that their charges are based only on the 4 hottest months of the year (June, July, August, and September). Read more about Texas’ 4CP program here.
- Demand Response – DR is when a 3rd party, known as an aggregator, asks a facility to curtail load during periods of especially high grid stress, typically no more than 12 times a year. These events may be concentrated in a peak period like late summer, or they may be more spread out.
- Check-out how we increase load shedding tenfold with our Automated Demand Response solution by shutting down refrigeration controls in an unprecedented ten minutes.
Ready to Get Started
Sometimes the biggest hurdle to begin saving is recognizing that energy is not a fixed cost that can’t be managed! There are significant costs at stake and developing a Demand Management plan to reduce your energy costs is a great place to begin.
If you’re ready to avoid price spikes, coincident peak charges, and demand charges, we’d love to connect. You can also learn more about Ndustrial’s capabilities here.
