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The Complexities of Energy Procurement

There is a growing emphasis worldwide on creating innovative energy solutions that are sustainable and at the same time economical. This pressure comes from governments, private business, civic groups, news organizations and even individual people. We are no longer content to simply buy energy. Today we have to look at various forms of energy, alternative solutions, price, both buying and selling, all while making it work within the context of our business.

Changes in government have helped necessitate behavior changes in the energy businesses seek out and use. Traditional and alternative solutions are all being incorporated. Everything including gas, coal, nuclear, wind, water, solar, geothermal, biofuel, ethanol, and hydrogen are options to consider. Even with everything on the horizon, companies are hesitant to invest too heavily into alternative green sources of energy. With all the options available, none of alternative sources have truly risen to the top as the main option to compete with traditional energy sources.

With so many different energy options available, energy procurement has turned from a simple buying to decision to what could be considered a serious risk-management objective for every business. Some buyers will create an entire portfolio from energy objectives. Risk can be managed by utilizing long-term contracts to buy energy, sell it back and rebuy at lower prices.

There is also the attempt by some to have a total energy plan that encompasses all forms from start to finish. These companies find ways to utilize waste products generated during their normal business processes. This approach has many benefits including cutting waste management costs, reducing carbon emissions, and potentially earning money by the production of energy through the use of waste products that can be sold back into the energy grid in that area.

The typical individual from home gets a monthly bill for electric and/or gas. When they plug the coffee maker in each morning, turn on the hot water for a shower, or sit down in front of the television after work, they expect the energy necessary for every action to be readily available. They don’t give it much thought usually, other than to complain about the high cost of energy when the monthly bill comes in the mail.

In reality, energy procurement is a very big part of today’s world. Every human being on the planet, in some way, is affected by energy, whether they know it now or not. Energy procurement is a complex maze to be navigated.  

June 11, 2013
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BY Bellwether

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