Commercial And Industrial Energy Solutions

Large commercial and industrial companies have unique energy solution needs, as they require a significant amount of electricity to operate. Strategic energy management is vital to increasing energy cost savings, and Champion Energy’s knowledgeable team and state of the art technology can customize an energy solution to fit your unique commercial energy needs.

WHAT IS COMMERCIAL ENERGY?

Commercial energy is the power that is used by commercial entities. This type of energy usage refers to businesses like factories, retail stores, and auto dealerships. According to the Energy Information Association (EIA), commercial energy consumption accounts for 5% of the total energy consumption in the US. The largest category is mercantile and service buildings, making up 15% of total commercial consumption. This includes shopping malls, car dealerships, and gas stations. Next on their list with 14% of commercial consumption are offices, including professional and government offices as well as banks. The activities that commercial buildings need energy for vary greatly depending on the type of business, but 25% of the energy consumption goes to space heating.

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Key Benefits To Commercial Customers

Procure The Best Energy Products With Strategy Built Around Your Business
Capture Larger Cost Savings On Your Electricity And Add To Your Bottom Line
Award Winning 24/7 Customer Care Department
EmPower Your Business For Success

WHAT IS INDUSTRIAL ENERGY?

Industrial energy is energy that is used in the industrial sector, and this accounts for 22% of the total US energy consumption. The EIA found that the largest consumers of energy in this industry are chemical companies, refineries, and mines. Combined, these three areas accounted for 58% of the total industrial energy consumption. This industrial sector primarily requires electricity for operating industrial motors, machinery, and equipment facilities that need heating, cooling, and ventilation.

ENERGY CONSUMPTION REQUIREMENTS

As you can see, commercial and industrial energy makes up the majority of the energy consumption in the US – they require a lot of power to operate and perform their essential functions.

According to the EIA, the increase in energy consumption required in commercial buildings has increased drastically in the last 30 years due to the more frequent use of electrical equipment. This equipment includes things like computers, printers, telecommunications tools, and monitoring equipment. Besides the electricity needed to make these things work, power is also required for cooling and ventilation to prevent them from overheating. Lighting is the largest use of electricity in commercial buildings, and it is one of the first areas companies target for energy cost savings.

How Do Businesses Handle Their Energy Needs?

CORPORATE ENERGY STRATEGY

How a company decides to source and consume energy has a significant effect on its cost structure. It also has environmental impacts, primarily regarding carbon emissions, as this is becoming increasingly important for consumers and investors. As expectations and new technologies change the way energy needs are met, businesses must adjust their corporate energy strategy accordingly.

When deciding on their corporate energy strategy, a commercial entity must consider how much energy they consume, the costs of that energy, and how that affects their bottom line. Other considerations include their carbon footprint and how it aligns with customer and investor expectations, as well as how do they compare to competitors. Through answering these questions, executives can determine opportunities for improvement and gaps that need to be addressed.

This can be translated into strategic energy management, which is a long-term approach to achieve continuous energy performance improvements. These improvements include reducing energy consumption and spend, as well as increasing productivity and reducing downtime. Even seemingly slight improvements like a 2% decrease in energy costs can have huge implications for your business, especially when your total energy costs are in the hundred million dollars range.

Creating an effective corporate energy strategy can seem daunting, but the best course of action is to work with a company like Champion Energy Services. We can provide you with the optimum strategy that is built around your business and can give you larger cost savings in the long-term.

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PURCHASING POWER

Actually powering the businesses is the next step, and is unfortunately not as simple as just flipping on the light switch. Most large businesses purchase electricity from utilities or independent power producers, but some larger industrials generate their own electricity to power their plants and factories. Self-generating businesses have to use their own fuel and equipment, but if they end up generating more power than they use they can sell it back to the grid.

If a large commercial or industrial business does not have its own source of energy, it must purchase power from somewhere else. Often times a large factory will have a power purchase agreement, or a PPA, which is a contract between an electricity generator and the buyer, essentially locking in a rate for electricity. This reduces some of the risks associated with volatile energy prices, but they are difficult and expensive to acquire unless you are a substantially large industrial.

Other commercial businesses need to purchase electricity on the open market, often from a regulated utility, thus being exposed to any price swing in the cost of fuel or electricity. It is a large risk, as power pricing is determined on a daily basis depending on the supply and demand for fuel and power.

In fact, independent system operators like PJM and ERCOT will release a day-ahead LMP, locational marginal price, which is the expected market price of electricity in an area the day before the auction occurs. Even with this, the true LMP may be different and estimates can be incorrect. This can result in difficulties for large industrials, as they are unable to accurately forecast and prepare for their cost of energy.

To avoid cost increases in your business from poorly planned energy pricing, work with Champion Energy Services to streamline your energy procurement processes. We can help you avoid accepting a fixed price based on what the market is doing each day and take advantage of our index products that seize cost effectiveness for your business based on ongoing market opportunities. We can also help you effortlessly leverage energy market movements to capture lower costs of energy through our expert procurement brokers.

LARGE COMMERCIAL SOLUTIONS

In the highly regulated energy market of the past, consumers could not choose where to purchase their energy from and had no choice but to use the default utility company. Now with energy reform moving to a deregulated energy market, businesses can compare rates, services, and terms to choose the option that best fits their specific needs.

Business energy switching companies, for example, are independent energy service companies that help businesses save money by switching their energy source to a more competitive supplier. This can give businesses of all sizes access to better rates and significant cost savings, without having to be large enough to secure a PPA.

The deregulation of energy markets and advanced energy technologies has given rise to new solutions for getting electricity for your business. To stay competitive and help your business succeed, it is imperative that your businesses take advantage of these solutions.