3-PART BLOG SERIES
Supply-Side Energy Management Delivers ROI and Helps Companies Meet Corporate Sustainability Objectives
As climate change continues to dominate conversations from boardrooms to newsrooms, there is a growing expectation from shareholders, consumers, employees, and political forces that corporations invest heavily and rapidly in carbon reduction efforts. Climate change has become imperative that developing a corporate sustainability strategy is no longer optional for many industries as major businesses looking to clean up their supply chains mandate cleaner production from their vendors, suppliers, and partners. As just one example, Walmart has the individual goal of zero-emissions operations by 2040. Still, their plan also includes “work[ing] with suppliers to avoid one gigaton of greenhouse gas emissions from the global value chain by 2030.”
Fortunately, carbon footprint and energy-use reduction investments typically result in improved operations and lowered energy costs, making an effort a win-win. However, developing a high-ROI sustainability strategy requires more than just throwing some solar panels up on the rooftop and calling it a day. A genuinely effective energy management strategy relies on a three-fold approach that accounts for supply-side, demand-side, and data/measurement & verification improvements that work in tandem to deliver the highest possible return.
In this three-part blog series, we examine energy management as an ecosystem in which each aspect enhances the cost-saving potential of the others.
Part One: Supply-Side Energy Management
Supply-side energy management is primarily concerned with energy management solutions that happen on paper. It is an often overlooked yet hugely important aspect of efficiency solutions development because it can make or break a project’s ultimate cost savings potential. Supply-side energy management includes the following:
- Tariff Analysis
- Portfolio Benchmarking
- Bill Data Processing and Procurement Review
- Power Factor Correction Evaluation
- Demand Charge Mitigation
- Surcharge Exemptions
Supply-Side Review Is Where Projects Reach Their Highest ROI Potential
Demand-side energy management strategies are not complete without supply-side review because the supply side is where the projects with the highest ROI potential can be identified. For example, Ally recently completed the construction of a biogas power plant at a protein production facility in Plainwell, Michigan. The project will offset 3,168 metric tons of CO2e with a total emissions reduction equivalent of nearly 3.5 million pounds of coal burned. Meanwhile, it will net the owners $13 million in positive cash flow over 15 years. However, this impressive cost savings could have been far lower without the supply-side work. Ally’s tariff and funding experts did design the project for maximum financial benefit.
Currently, the plant is functioning as a “peaker plant,” which means, even though it is capable of providing for 100% of the facility’s energy needs, for the time being, it is being used in conjunction with utility-derived energy to “shave the peak,” during peak pricing hours. This operations strategy, combined with the plant’s qualification for the 30% Biogas Federal Tax Credit and PACE funding, results in the highest possible ROI. Meanwhile, the project was designed to be adaptable so that if the energy needs or utility prices ever change, the plant output can be adjusted accordingly.
Find Out More About This Project:
Sometimes Projects Begin and End at Supply-Side Review
On the other hand, a utility bill review often will uncover savings opportunities resulting from clerical errors and inaccurate categorizations. We recently saved an industrial manufacturing client $1.6 million simply by identifying improperly calculated measurements on their wastewater bill. (Find out more about this project here: Wastewater Efficiency.)
At first glance, this type of project looks more like a cost-saver than an emissions-reducer. However, because we are huge advocates of maximizing zero out-of-pocket strategies wherever possible, we see a supply-side win like this one as an opportunity to offset some significant operational improvements. Using energy cost savings to finance demand-side projects is ideal for upgrading operating systems while keeping budgets intact.
Ally’s Team of Supply-Side Experts Can Help Uncover Hidden Savings Potential
Whether a project results in cost savings only or cost savings coupled with direct sustainability benefits, it takes an expert to uncover the opportunities and design the projects for maximum benefit. This is the Ally difference. As energy management domain natives, we understand efficient facility operations from every angle, and we leave nothing to chance when developing projects.
Our clients benefit from a team that has been at the forefront of the energy efficiency industry since its inception. Our portfolio of work includes projects from some of the largest corporations in the US – projects of a size and scale to demonstrate our capabilities and expertise as national leaders in efficiency strategy, project implementation, and ongoing management.
Ally – We Are Energy Management Experts
Get More Information About Our Portfolio of Supply-Side Solutions