Energy strategies move from boiler room to boardroom

Board-level executives are changing tack when it comes to their energy needs.

Energy management is becoming an increasingly significant consideration and today it is up there with sales, marketing, finance and HR in terms of its strategic importance.

Decision makers in business are aware of its impact on the bottom line – but it also affects other parts of the business. A focus on energy can increase sales, improve staff morale and extend the life of core facilities, all of which – along with cost savings – drive profitable growth and create shareholder value.

The energy sector is going through the same transformation that the information technology sector did 10 or 15 years ago when it stopped selling boxes and started to look closely at what individual organisations really needed. Our customers have increasingly sophisticated requirements and energy has risen up the list of strategic priorities. In this blog I explore some examples of the evolving needs of our customers.

Frequently the second or third highest regular cost that a large business faces, directors are increasingly seeing energy as an investment opportunity and not just a basic outlay that is paid on time and quickly forgotten.

The retail sector is one area in which energy is a major factor which influences decisions. Energy efficient lighting is often better quality and more flexible. Blinking tube lights are never a good look and different forms of lighting and air conditioning can help lift a customer’s mood and drive sales. With retail moving from large out-of-town superstores to smaller, urban micro-shops, the energy needs of retailers are changing and flexibility is replacing volume as the key value driver for our customers.

With tissue-thin profit margins for many retailers, a 20% energy saving could be the difference between profit and loss. So better warehouse lighting controls, for example, which turn equipment on and off automatically depending on whether people are in the space, are used by a growing number of businesses as a low capital-cost way to deliver bottom-line benefit.

Hospitals clearly see energy as a strategic priority, although for very different reasons than in the retail sector. Cost savings are always welcomed but of more crucial importance is security of supply to critical locations such as operating theatres, A&E rooms and intensive care wards. “Keeping the lights on” means something very different in those environments.

At first glance, financial services is not an obvious place to look for energy considerations. An office expends a lot less on energy than a steel mill, for example. However bank branches are often housed in inefficient buildings – if a bank has 2,000 branches and 1,500 are located in beautiful but aging Victorian buildings, then the energy requirements of those premises may prove to be a serious cost burden.

In the construction industry, tightening environmental targets laid down by government are converging with rising demand from buyers and investors for buildings that are low consumers of energy. Developers and construction companies are therefore taking a whole-life view of the performance of their building assets – with energy performance increasingly a key part of that.

Finally, many businesses have stretching energy targets, a clear awareness of their strategic drivers, and the intent to deliver deep reductions in consumption. What they struggle with is accessing the reserves of capital needed for big energy projects.

More of our customers are now working with us to explore ‘gain-share’ deals and true strategic partnerships in which SSE Enterprise is investing in their energy infrastructure and guaranteeing energy performance. This exciting move is decoupling energy reductions from capital constraint and really opening up new options for our customers.

These are just some examples of the strategic drivers we are seeing shape our customers’ energy strategies. SSE Enterprise is working closely with customers to really understand these key drivers. Only through spending time challenging these with our customers are we able to create truly sustainable energy solutions and deliver true long-term value.

Whatever your business, SSE Enterprise can help your company to build an innovative and cost-effective approach to energy management. To find out more, visit sseenterprise.co.uk

About the author

Mike Reynolds Head of Development and Technical Solutions, SSE Enterprise

Mike leads a team of Development Managers and Energy Solutions Architects responsible for developing and delivering SSE Enterprise's end-to-end solution for business customers. His team works with customers requiring large, complex and long-term energy infrastructure projects. Previously Mike held senior roles with The CarbonNeutral Company, a leader in voluntary carbon management.

Read more articles by Mike Reynolds