An energy strategy is a comprehensive plan that describes how an organization intends to use, manage, and reduce its energy consumption. Such a plan might outline how a business, agency, or institution can become more efficient in how it uses energy, reduce its environmental impact, and bring down energy costs. 

Let’s learn about energy strategies, why they’re useful, and the core components of an effective energy strategy. 

Energy Strategy Foundations 

An energy strategy defines an organization’s energy consumption objectives and the steps to take to achieve those goals. Many strategies include an approach to an energy transition — a shift to using more, or only, renewable energy. 

Without an energy strategy, a company may simply jump from one energy contract to the next, looking only at the short-term or cheapest energy prices. This can end up costing an organization more in the long run, may not be adaptable to their changing energy use, or may not please investors or customers who want to see transitions to cleaner energy. 

A longer-term energy policy can be much more beneficial. But building a sustainable strategy requires knowing how to access renewable energy and figuring out the right energy mix for your organization. Renewable energy solutions are often cost-neutral or positive when compared to traditional energy sources. As a result, organizations can reduce their energy costs with a long-term green energy strategy. 

An energy strategy should also involve a framework for energy budgeting. Knowing how much electricity your business needs and the approximate level of carbon emissions it will produce over ‌a few years can help executives create more accurate and reliable budgets and investor reports. 

6 Pillars of an Effective Energy Strategy 

Here are six steps to take when building your energy strategy: 

1. Audit Your Current Energy Use and Benchmark It 

First, you need to know how much energy your organization is currently using. But this data isn’t very useful in a vacuum. That’s why energy benchmarking helps; it enables you to contextualize that data. Auditing and comparing energy bills, greenhouse gas emissions, and energy use is a vital first step. 

2. Consider Your Cost-Efficient Options 

Energy costs can add up quickly, but so can energy savings. Even a slightly more advantageous contract can save organizations serious money over ‌time. 

3. Determine How Your Energy Strategy Can Support Sustainability Goals 

Many organizations are surprised to learn about all the potential renewable energy sources available to them. Depending on location, you could utilize solar energy, wind turbines, geothermal energy, or even nuclear power; you’re not limited to fossil fuels. 

Whether you, your investors, or your customers care about clean energy or not, it often makes sense to utilize renewable energy sources. By mixing up your portfolio, you can achieve energy security. If one source fails or prices for one type of fuel skyrocket, you have a diversified energy supply to insulate you from these harmful impacts. 

4. Explore What Energy-Saving Technologies Can Help 

An audit can also reveal how inefficient your current energy use might be. Turning off appliances and systems when they’re not in use, operating during off-peak hours, and switching to efficient energy technology could save you a lot of money. 

5. Consider Defense Against Price Fluctuations 

If your organization builds an energy strategy that incorporates fixed energy contracts, energy-efficient systems, and renewable energy sources, you can guard against the potential damage of fluctuating energy prices. 

6. Build Regulatory Compliance Into Your Strategy  

Energy and emissions regulations are in flux. There may be numerous laws and rules that apply to your industry and your geographic area, or restrictions may be loose right now (temporarily). But ensuring full compliance is your responsibility. If you can proactively comply with potential future regulations, you can avoid disruption. 

Overcoming Energy Strategy Problems 

There are numerous obstacles that might crop up when developing your energy strategy. Here are some tips to overcome common challenges during the process: 

• Gather all the intelligence you can: Energy market intelligence is a key asset when developing an effective energy strategy. 

• Be ambitious — but flexible: Build a plan for the most efficient, cleanest, scalable strategy possible, but keep it nimble enough to change if necessary. 

• Weigh risk vs. resilience: “No risk, no reward,” so they say. But if you risk it all, you could lose it all. Mitigate risks and build resilience into your strategy. 

• Engage all stakeholders when building internal policies: Transparency is key, and input can be helpful. Survey all relevant stakeholders to see if they can help craft an energy strategy that’s particularly helpful for your organization’s circumstances.  

• Employ utility data management: Advanced software can make utility data management simple and deliver insights that help you find the best energy contracts. 

Choose the Right Partner 

The best energy advisory firms offer services that are highly useful for developing and following an effective energy strategy. For example, an energy advisor — such as EnerConnex — can send “peak day alerts” forecasting when energy usage will spike during the day. This can be crucial to avoid paying top dollar for high-demand energy in peak times, such as the dead of summer. 

Energy Strategy FAQs 

Here are some frequently asked questions about energy strategies: 

How Can an Energy Strategy Combat Price Volatility? 

A strategy that diversifies your energy portfolio, invests in energy storage, and boosts efficiency will help stabilize costs. 

What’s the Right Balance Between Cost Savings and Sustainability Goals? 

These two goals are rarely at odds. In fact, renewable energy is often cheaper than fossil fuel contracts. Harnessing the cleanest energy you can may require significant initial investment, but you can amortize these expenditures over the years of use. 

How Does Demand Side-Energy Management Affect an Energy Strategy? 

An effective demand-side management (DSM) strategy can reduce market prices for electricity, minimize the cost of managing an electrical grid, even out energy demand, and help the transition to green energy. It makes sense to consider any DSM plan a supplier may offer. 

Turn to EnerConnex for Help Developing the Perfect Energy Strategy 

Discover EnerConnex energy strategy consulting services and find out how we can help craft the perfect energy strategy for your organization. Please contact us to learn more about front-running energy procurement solutions.