Global Energy Mix Prioritized by Multi-Billion Dollar Corporations
Posted July 31st, 2012
As the cost of operating budgets rise for energy companies, research is being done to see where numbers can be cut, without dissolving the mission of energy conservation.
Simply put, energy mix is a prime strategic issue at a number of C-suite level billion-dollar corporations.
Companies are said to put in 5% of their budget into operating costs while more say it is a staggering 20% of budget that goes into, specifically, the operating cost of energy. These companies are already hurting as they’re expecting energy costs to rise substantially within the next five years.
So what’s being done? Most companies have developed formal strategies to manage the mix of energy sources used. Some companies have global strategies, business unit level strategies, and few have even expanded strategies that extend to their supply chain, rather than just operations.
These multi-billion dollar companies face challenges ahead including financing and capital issues in regard to energy mix projects, accessing government grants and incentive, and selecting technologies.
These challenges aside, companies have energy strategy objectives they don’t want compromised. Chief among them, they want to a cost reduction through efficiency. Along that goal, they hope to minimize their carbon footprint and ensure the reliability to energy supply.
Companies like IKEA, Toyota, Hertz, and PepsiCo have even launched their own campaigns to generate their own energy supply. These initiatives are meant to reduce energy price volatility, increase the security of supply, meet carbon objectives, and/or to decrease costs, overall.
However, these individual companies face some barriers when it comes to energy self-generation. The payback period is too far off and is considered a risk. The uncertainty of financial return and the risk factors are also often listed as reasons to proceed with self-generated energy with caution.
Despite the challenges these companies face, they’re facing it head on and thinking of ways to strategically move forward without damaging their companies. It is estimated that within the next five years, that demand for self-generated energy will rise significantly.
Going forward, only corporations with a strong, diverse strategy will be competitive enough to stay afloat in the ever-increasing low-carbon, resource-efficient economy.
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