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Renewable energy as corporate 'security' measure?

Renewable energy as corporate 'security' measure?

Posting in Energy

Ernst & Young reports that large companies plan to continue investments in wind, solar and bioenergy projects over which they have primary control.

While energy efficiency and cost management continues to be the rallying cry for large companies that have created some sort of energy management strategy, the issue of energy security is becoming a larger factor among companies developing a corporate energy strategy, according to research by the energy group of consulting firm Ernst & Young.

The primary cause?

At least 38 percent of a group of 100 enterprises interviewed by Ernst & Young reported that they anticipate energy price increases of at least 15 percent in the next five years, making the efficiency rallying cry a very real operational concern and priority. The cost of energy was the top driver of the push by these companies to diversify energy mix.

In fact, for half of the companies interviewed by Ernst & Young, energy expenses were 5 percent or more of operating costs already. For 22 percent, those costs were at least 20 percent of operating costs, the data show.

The most common energy efficiency investments among the companies studied by Ernst & Young were energy demand management (47 percent), building energy management systems (20 percent), energy-efficiency lighting (18 percent) and building automation (18 percent).

But I was also pretty surprised to read that 41 percent of the companies were using a company-owned or controlled renewable energy resource for at least some portion of their electricity needs.

Mind you, only 11 percent of the respondents were squeezing more than 5 percent of their power consumption out of solar, wind or bioenergy technologies. But I was surprised by the number of businesses that now have some sort of onsite renewable energy investment.

Half of the respondents said they plan to increase company-owned renewable generation during the next five years.

Close to 70 percent of the Ernst & Young respondents are purchasing renewable energy generated by a resource controlled by some other company.

It used to be that carbon emissions and a desire to manage greenhouse gas footprints would be held up as the motivator for energy strategies. Then, energy efficiency became the rallying cry. But increasingly, we will hear about businesses seeking to diversify their energy sources, if for no other reason than to protect themselves from costs spikes related to global political issues and other factors that are inspired more by security and less by any altruistic motivation.

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Heather Clancy

Section Editor

Heather Clancy has written for United Press International, ZDNet, Entrepreneur, Fortune Small Business, the International Herald Tribune and the New York Times. She holds a degree from McGill University. She is based in New Jersey. Follow her on Twitter. Disclosure