The role of Energy Optimisation in managing market volatility
Managing energy supply in a volatile market is critical for companies to remain resilient as prices rise and markets fluctuate.
With the current energy crisis, organisations across all sectors are feeling the pressure.
In the EU in particular, energy prices have reached record levels, exacerbating the challenges of energy management.
The market actors expect prices to remain high for the remainder of 2023 and into 2024-2025. To meet these challenges, companies need to take proactive measures to optimise their energy supply and control their costs.
It’s not a surprise that most companies lack sufficient knowledge about their energy contracts: in fact, in our previous webinar, we asked retailers that were attending whether they believed their energy contracts were optimized to the fullest extent.
A significant portion of participants replied that they didn’t know, while another large group felt there was plenty of room to optimise their contracts.
Watch the full webinar replay
Watch the video nowThis highlights the need to have an accurate and consistent view of the contract with the energy suppliers.
A solution that can help is the Contract Power Optimisation via the Energis.Cloud platform, which recommends the best power subscription for each site in a portfolio, based on its historical energy behaviour.
In fact, with the Contract Power Optimisation you can:
- Uncover hidden costs due to sub-optimal contract terms across your portfolio.
- Align contracted power with actual consumption.
- Optimise your entire contract.
This not only increases your resilience in a volatile market but also helps you to become more sustainable and socially responsible.
Don’t let your energy costs spiral out of control – read on to discover how Energis can help you achieve financial savings through the power of the Contract Optimisation.
Table of Contents
The role of subscribed power
Energy consumption is a significant cost for most businesses: every company has a contract with an energy supplier for a specific subscribed power, which is the maximum power that can be used without penalty, usually expressed in kVA (kilovolt-ampere).
Choosing the right subscribed power that meets your needs and avoids unnecessary costs is crucial, as the amount of energy you subscribe to has a direct impact on the cost of the contract and subsequent bills.
However, many businesses fail to match their contract to their actual energy consumption, resulting in wasted resources and unnecessary expenditure.
This can occur in two different scenarios, both of which have pitfalls:
- The lower the contracted power, the cheaper the subscription and the higher the penalties for exceeding the ‘threshold’, represented by the contracted power.
- The higher the contracted power, the higher the subscription price and the lower the penalties.
In the first case, it seems obvious how inefficient it is to continue paying for all the hours in which the “threshold” of the subscribed power is exceeded when in reality the energy demand tends to be higher.
In the second case, we face a double optimisation problem: on one hand, with the existing contract, you demand (and are entitled to) the exact amount of energy, guaranteed by the grid operator. But if you do not use it, this creates inefficiencies in the planning of the grid operator: it guarantees you the availability of that amount of electricity, even though you do not end up using it.
On the other hand, it is a huge waste of financial resources, because you are paying for something that you are not using to the full extent. In fact, you have to pay more for all the different cost components of the bill and the contract itself, such as wholesale costs (the cost of generating electricity), network costs (the cost of distribution and transport), operating costs, taxes, and surcharges.
Optimising your energy contract to match your actual usage can generate significant savings and improve your bottom line in two ways: firstly, by reducing the amount of energy you use, you will pay less for the same subscription, and you can save even more money on top of that.
In addition, knowing you have less power at your disposal, you will tend to use less energy, optimising the overall use of resources.
That’s why it’s important to choose the right amount of energy for your subscription: but how do you do that?
The added-value solution that Energis brings
In order to implement the Contract Power Optimisation, Energis has to obtain some key data from the company and from the distribution network for subsequent calculations.
This is possible thanks to the main meters, which are located where the primary energy source you want to monitor is, so to get the main consumption.
The data is usually available thanks to the distribution network operator: it is not only responsible for distributing energy but also for collecting and storing consumption data.
In fact, the data is entered daily, every 10 or 15 minutes for electricity and every hour for gas.
For more information on data retrieval with DSO
Further reading
The information retrieved by Energis are:
- the subscribed power (the maximum power you can use within the limits of your subscription);
- the maximum power peak reached (this is the value in the solar year or 12 months that represents the maximum value (the peak of electricity) reached);
- the number of hours during which the selected power was exceeded;
- the cost of the subscription (annual);
- the cost of the penalties paid (based on the hours of excess).
Energis’ algorithms then calculate the recommended subscription power, the cost of the optimised subscription contract and the potential financial savings based on the new assumed conditions.
Intuitive talking charts give you a complete overview of your portfolio situation at a glance, before and after you have optimised your contracts.
The power of this solution is that it can be applied on a large scale, quickly and automatically to all the sites in your portfolio: you can simply look at the final result and check the new generated conditions.
With this solution, you will be able to know exactly, for each site you manage, whose behaviour really reflects the conditions you accepted when you signed the contract with your energy supplier.
This opens the door to financial savings that were previously unimaginable.
The way forward
To withstand the current volatile energy market, companies must take a proactive approach to managing their energy costs. Optimising energy procurement is key to dealing with the rising energy prices. Besides, implementing energy efficiency measures to reduce energy consumption can further complement a comprehensive approach to energy cost management.
By leveraging Energis.Cloud’s Contract Power Optimisation, you can begin optimizing your energy grid usage today, resulting in decreased expenses and the elimination of superfluous energy consumption and financial inefficiencies.
If you’re looking to reduce your carbon footprint and improve your bottom line, and especially if you’re new to energy Contract Optimisation, get in touch with one of our experts.
We are here to help you on your journey to sustainability and energy efficiency.
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