Insight Sourcing Group’s Tommy Greer and Spend Matters’ Pierre Mitchell discussed how high-performing procurement organisations are managing their energy expenditure and the top four ways that you can drive down energy costs.
Enterprise energy management is focused on four primary value levers that drive sustained savings and transformation. Certain of the ‘levers’ cannot be applied in regulated energy markets such as South Africa’s, but it is interesting to note what can be done to generate savings when utilities such as electricity are not monopolised.
1. Utility bill audit/data management
Energy information management systems that audit utility invoices for errors and misapplications could be one of the solutions. This could possibly result in reduced billing errors, consolidated reporting and facility benchmarking and visibility.
2. Energy procurement/risk management
Proactive sourcing of energy in deregulated markets (electricity and natural gas) by leveraging buying power while managing vitality in energy markets, values of energy procurement includes proactive energy management, portfolio wide sourcing, volatility management.
3. Regulated rate optimisation
Analyse, identify, negotiate and implement more economical utility rates with existing regulated utility providers; this will assist to drive value in regulated market, analysis of current rate structures and lower rates with utility providers.
4. Demand side management
Operational improvements through metering/monitoring, coupled with energy efficiency and demand limiting solutions: this implementation with help with demand reduction and monitoring for demand management
So, while deregulated energy procurement requires constant market monitoring to ensure competitive rates, an analysis of regulated rates can drive cost optimisation for customers in regulated markets such as South Africa.