Monday, 6 August 2012

Energy management can impact brands, but technology is not helping

DeloitteDeloitte has released its ‘reSources 2012 Study - Insights into Corporate Energy Management Trends’. This is the second year of the research, which looks at the attitudes and practices that US companies have towards energy management.

It makes interesting reading – the full report is available here – but here’s some of the highlights:

  • Energy management activities at US companies have increased since last year’s study. In all, 90% of companies have electricity and energy management goals and 90% are targeting electricity consumption and cost reductions.

  • Energy management is seen as essential to staying competitive. For example, over 60% report that their customers are demanding that they offer more environmentally considerate solutions and three-quarters actively promote their efforts to their customers.

  • Over 70% indicate that their companies are or will be recognising the cost of carbon as an important long-term balance sheet item, although 80% say that it’s very difficult to measure with any confidence, up from 71% in the 2011 Study.

  • Last year’s study showed that, on average, companies were working to reduce their energy consumption by 25% over a three-to-five-year period, but were less than one-third of the way to achieving those goals. The latest study found that they have achieved closer to 60% of their targeted reduction levels.

  • In all, 80% of companies report that they have become  more sophisticated in managing their electricity costs, but there is recognition that further progress will be  difficult as they harvest the ‘low hanging fruit’. Capital funding is the main barrier, followed by length of payback period. Also, 60% agree that smart technology is not effective for their own circumstances and an equal number agree that current technology is not up to the job.

  • Only about half the companies are regularly measuring and verifying their progress toward goals. Some of the difficulty can be attributed to the IT systems they have in place. Around 70% are currently using a spreadsheet, while just 20% have implemented more sophisticated software solutions. Of those that have software systems, only 41% say that what they are using meets their needs extremely or very well.


So, in short, corporate energy management in the US is becoming more important all round, with carbon taking on a significance in its own right. Progress has been accelerating towards achieving energy reduction goals, but it’s now getting more difficult as companies run out of low-hanging fruit. As payback gets longer, so projects are failing to meet corporate ROI requirements for investment.

It reads like the scenario that green IT suppliers have been dreaming of. The time has come when companies need to increasingly turn to ICT to help deliver the energy/carbon reductions which they accept as essential to their businesses. Technology can provide the tools to help leverage energy reduction, but the research finds that most companies feel that technology is not up to the job.

It seems that IT suppliers still have a long way to go in educating the market about what they can offer. To some extent this reflects a reluctance by many suppliers to spell out the ‘green’ credentials of solutions. Energy efficiency and carbon reduction need to move up the list of features and benefits across all corporate solutions. But, on the other hand, if new solutions, such as energy management software, are not providing what customers need, then suppliers need to think again.

Perhaps more market research?

© The Green IT Review

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