Managing costs and usage with a modern energy strategy

Through measures such as price hedging, efficiency gains, and onsite generation, businesses can reduce costs and increase energy security.

Published: November 11, 2021
The Challenge

For any commercial and industrial (C&I) facility, energy is one of the biggest costs. It’s also one of the most difficult to plan for. Rate swings, market forces and fluctuating demand combine to make planning for future energy costs a challenge, even in the short term.

The solution is a modern energy strategy. Rather than tie themselves into contracts with energy utilities — on non-negotiable rates — companies should adopt an active energy management strategy.

Actively seeking the best price and energy mix at any given time not only helps make costs more manageable and predictable, but it can also contribute to achieving other goals, such as increased sustainability.

The importance of peak-load planning

It’s often difficult to predict when your sites will have peak-load days – which is when power needs reach their maximum – since they can depend on factors that are often out of your control, such as demand fluctuations, market conditions, and regional variations.

But electricity and natural gas costs move during peak demand periods, so if your peak load hits when the market is also at its peak – and you don’t have a mitigation strategy in place – that means higher costs for your business.

Therefore, working with experts who can help you predict when your peak load will occur is vital in avoiding costly outcomes.

Once you know when your peak-load is likely to hit, you can then optimize your energy strategy to achieve the best possible balance of price, energy security, and sustainability.

The 5 key elements of a modern energy strategy

A modern energy strategy should be flexible and intelligent, able to scale and adapt to changing business needs and market conditions.

But at its core, this strategy should consist of five key elements:

  1. Working with an energy trader: Traders help you pursue procurement strategies, for gas and power, that aren’t available with utilities and can help lock in lower prices.

  2. Increased energy efficiency (EE): EE offerings can reduce power consumption, particularly on big-ticket items such as heating, lighting and air conditioning.

  3. Peak shaving: When you know a peak is coming, you can make short-term operational changes — for instance, switching production to overnight — to reduce energy costs.

  4. Onsite generation & storage: Whether you choose diesel, natural gas or renewables, onsite generation and storage helps avoid drawing on the grid at peak times, reducing costs.

  5. Renewables: Because it has a low marginal cost, adding extra units of renewable power is an economical and predictable way to boost energy generation during periods of peak demand.

How Shell Energy can help

Because Shell Energy is one of the world’s largest integrated energy suppliers, we can offer innovative energy solutions across a portfolio of power, natural gas and environmental products.

So, let Shell Energy be your local link to global energy assets and trading power and watch as our experts help you shape an intelligent, structured, data-driven and cost-efficient modern energy policy.


Related articlesView all Energy Insights
Four technologies for long-term decarbonization

Discover strategies for long-term decarbonization, including energy storage, carbon tracking, distributed generation, and sustainable EV infrastructure.

A cost-effective route to energy efficiency

Discover a new path to becoming more energy efficient by upgrading infrastructure quickly and cost-effectively, and avoiding upfront investment.

Subscribe to the Shell Energy weekly market update

Sign up now

Get started on your business's energy strategy.

Request a quote