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March 26th, 2012

Crucial Considerations: The 4 Things We Think About When Preparing an Energy Strategy

by Jon Sorenson, President and COO

Most people don’t consider that when they flip a light switch or turn on a machine, they’re tapping into energy that comes to them from a complicated series of decisions made throughout the energy industry.  With thousands of interlocking climate, political and economic factors coming into play, energy is one of the most complex elements of our daily lives.

Well-prepared businesses and organizations approach this system with a clear strategy in mind.  Our CES team members spend much of their time creating and refining these kinds of plans and energy purchasing managers around the country do the same.  Whether a detailed report or an overarching philosophy, having an energy strategy helps an organization avoid pitfalls and prepare for new energy options.

The four things we take into consideration when we’re preparing an energy strategy:

1.) Understanding how the client uses energy.  In order to have an effective strategy, we drill down into the details of the client’s energy usage.  This involves learning and analyzing a host of factors – including the when, where and how of their business operations.  By understanding, and sometimes adapting, the client’s need, we build the groundwork for a comprehensive plan.

2.) Knowing the available products.  Looking past the meter, pipeline or delivery pump, there is an ever-changing array of energy options available to the consumer.  Whether for electricity or fuel, there are many varieties and sources of energy available in the deregulated market.  This process might include: oil, natural gas, biofuels, biomass or renewable energy.

3.) Assessing the risks. With the first two elements in mind, the most complicated part of the strategy comes in analyzing the risks of the various options.  This is best accomplished by professionals, like our team here at CES, who are able to blend important concepts from economics and the energy industry into a comprehensive analysis.  This process of risk analysis allows the consumer to have a variety of options and to choose what level of risk they’re willing to take.

4.) Watching and understanding the market. In order for the risk to be properly calculated, and as part of an overall strategy, it is also important to have a solid understanding of the dynamics of the energy market.  This includes a broad sweep of topics, including the economic dynamics of world producers and consumers, technology and research, and new discoveries of energy sources.  All of this information can be used to enhance the consumer’s understanding as they plan and choose their energy strategy.

With these four considerations included, an energy strategy can help position a consumer to make the best possible financial and operational decisions with the available information.

 

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