The transition from hydrocarbon fuel sources to renewable energy sometimes overlooks the “fifth fuel”: energy efficiency. Two-thirds of energy is lost in the generation and transmission of electricity. Reducing demand has a greater impact on the energy equation than new sources of capacity.
The federal government is doubling down on efforts to utilize energy efficiency, implementing infrastructure projects with no cost to the taxpayer. Energy Savings Performance Contracting (ESPC) allows government agencies to utilize 3rd party financing to fund needed capital improvements through guaranteed energy savings.
The private sector should take a cue from the government. Energy consumption is an operational expense that detracts straight from the bottom line. In low margin industries, such as retail, more efficient operations can represent a significant competitive advantage.
Many organizations accept energy costs as an uncontrollable expense and are unaware of the opportunity that improved energy efficiency offers. Sub-metering and energy audits provide visibility to help make informed financial decisions. Energy conservation measures, such as building automation, lighting & HVAC controls, demand response, and upgrades to high density computer rooms, allow organizations to reduce operational costs while improving performance.
Additional efforts in demand-side energy management could eliminate the need for new construction of fossil fuel generation during the transition to renewables. Lean organizations that embrace energy efficiency will be more competitive and extract greater value for taxpayers and shareholders.