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Emerging Energy-as-a-Service Model Helps Companies Maximize Efficiency and Reduce Costs

Karen Marcus's picture
Freelance Researcher and Writer Final Draft Communications, LLC

In addition to serving as an Energy Central Community Manager, Karen Marcus has nearly 25 years of experience as a content developer within the energy and technology industries. She has worked...

  • Member since 2017
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  • Jan 15, 2018

As the energy industry continues its evolution from a monolithic model to a more distributed one, companies can take advantage of new options to increase energy efficiency. In an article for CX Associates, Eveline Killian notes, “Now there are renewables, storage, deregulated utilities, and energy efficiency renovations as energy sources.” Yet, this assortment can be complex to coordinate; that’s where Energy-as-a-Service (EaaS) comes in.

Energy Concierge

Like other as-a-service models — such as Software-as-a-Service (SaaS) and Infrastructure-as-a-Service (Iaas) — EaaS removes management headaches while delivering a consistent, reliable experience. Think of it as an “energy concierge” that manages and optimizes a company’s energy sources, and takes responsibility for the overall cost. It reduces the need for CAPEX; and creates predictable OPEX, contrary to the fluctuating expenses previously associated with energy use.

Currently EaaS is being used by only a few companies, but a Navigant report estimates that “the annual global market for the deployment of C&I EaaS will reach $221.1 billion by 2026.” That number is easy to understand when considering the potential advantages. “When done right,” explains Maryrose Sylvester, President & CEO at Current, powered by GE, “it reduces complexity, cuts costs, scales quickly, and keeps adopters running on the best and latest solutions.”

Efficiency and Beyond

Even better, suggests Sylvester, the infrastructure used in the EaaS model — such as “LEDs, solar, on-site storage and electric-vehicle (EV) charging stations” — could be used to create additional revenue-generating opportunities for companies. For example, “Imagine an intelligent store that could leverage energy-saving…sensors to ‘talk’ to shoppers’ smartphones and send a personalized greeting or special offer.” Sylvester mentions similar potential for the healthcare (sensors that track medical equipment) and municipal (LEDs that direct drivers to open parking spaces) arenas.

Clearly the possibilities are virtually limitless for a variety of sectors. The military is one: “The Air Force is beginning to explore the idea of asking a single provider to take over the complicated web of business arrangements that power its bases and support its energy resiliency strategies, and replace them with a new model: Energy as a service,” reports Jared Serbu for Federal News Radio. According to Serbu, the Air Force’s primary goal is “keeping their own facilities lit if the public electric grid is disabled by a cyber attack or natural disaster.”

The Big Role of Big Data

One of the primary drivers of EaaS is another as-a-service model, Energy-Data-as-a-Service (EDaaS). IGS Energy notes, “It is important to set a baseline from which to measure any change in overall efficiency. So, to determine a means of becoming more energy efficient, companies need to know how efficient their current usage is.” In an article for GreenBiz, Sanjoy Malik further explains: “Two key sources, utility bill and smart meter data, can be used to enable better decision making, which makes it easier to baseline current energy usage and model potential scenarios to reduce it.” However, due to various factors, this data is not always available in appropriate formats. EDaaS offerings play a part by providing energy data to improve energy optimization. Malik states, “Energy performance in many buildings can be improved using more detailed data, analyzing it and creating statistical models that include other variables such as weather and occupancy.”

Considering that “the commercial sector uses about 35% of overall electricity consumed in this nation, and a very large chunk of that (about 20%) is wasted,” according to Peter Kelly-Detwiler for Forbes, any steps toward efficiency are steps in the right direction. Increasingly, EaaS is likely to become an important element of many companies’ power journey. 

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