Now is Not the Time to Put Off Energy-Saving Improvements

With energy prices taking a back seat to concerns about the overall economy, it would be easy to put off dealing with long-term energy supplies. However, this is not the time to be complacent. These last few months in particular are likely a prelude to a longer term rollercoaster ride of energy prices, especially the dizzying peaks. That the power transmission system is antiquated and unreliable with no solution in sight simply adds urgency to the overall need to deal with energy issues. And with economic uncertainty comes the need to contain costs, especially energy expenditures.

Fortunately, options are available. Forward-thinking, innovative companies continue to develop solutions. Some technologies that will prove the most useful are mature and ready to go. Others are still in development but are close to realization. These technologies provide unprecedented opportunities to upgrade or fundamentally change the way energy needs are managed.

Environmental Factors

It is true that going green is golden. First there is the potential for cost savings through the use of "free fuel" technologies such as wind power and solar. Installing wind power generation capacity means eliminating the cost of fuel and the overhead of an outside supplier. This could result in an attractive ROI against the costs of installation. In addition, having pollution-free energy generation can help your company develop a green image.

An environmentally friendly company has an edge in terms of public perception, too. In consumer markets, being green can translate into sales. For industrial companies, the value is more in terms of public relations. Either way, converting to green energy provides an added bonus in upgrading a company's image.

Energy Independence

Energy independence isn't simply something politicians dream up during presidential campaigns. As a practical matter, the independence they speak of is probably unattainable in the foreseeable future. However, companies can achieve a degree of independence in their day-to-day operations. Finding the right alternative energy sources, such as geothermal, solar, or wind, can also help companies contain costs by allowing them to seize control of supply as well as demand.

For businesses in areas subject to brownouts or blackouts, controlling the energy source is critical. Consider what Fred Schultz, VP of Equity Research at Raymond James & Associates, said back in 2000, "The United States loses $40 to $50 billion in productivity each year because of lost electricity. And as we move to a more digital economy, those numbers will increase exponentially." We've moved to that more digital economy and it is likely that his estimate is short by half or more.

Companies that supply their own energy can design systems to fit their needs so load control and peak usage are not issues. This can be far better than having to deal with the limitations imposed by a power company's potentially poor judgment or being subject to the vagaries of a population's electrical energy usage patterns.

Location

Alternative energy options are often location specific. For example, a facility fortunate enough to be located near a premium geological heat source can probably make geothermal the centerpiece of its energy system. Effective solar-based generation depends on the number of clear days which are available, and that is often geographically specific too.

For most companies the choices are more limited. But those that can take advantage of geographic circumstances may reap large benefits. Fortunately, a number of alternate energy sources are not restricted by location. This multitude of options means that no one gets left out when it comes to taking advantage of economic and green energy resources.

Efficiency through Recycling

Many businesses have scrap or waste products that may represent nascent opportunities for economic gain. In facilities that have high temperature processes there is often a great deal of wasted heat that can be readily recovered. Every BTU generated requires fuel to make, so exhausting heat from a furnace, for example, has a cost. Every BTU recovered from a waste stream reduces the amount of fuel required to do that job. The idea is hardly new. Heat recovery systems for furnace exhaust date to the 19^th century when James Howden was awarded U.S. patent No. 00288437 in 1883.

Paper mills, for example, can achieve significant savings by burning the wood scraps that cannot be used in paper making. The wood scraps they normally dispose of are instead used to fire the boilers used in their process and generate their own electricity. SMART Papers is in the process of converting its Hamilton mill to biomass and is on track to be free of fossil fuels in 2009. In fact, it expects to be selling excess power to the state power grid in 2010.

Solutions

Every company has unique energy needs. Recognizing and addressing those needs will likely be based on answering the basic question, "What energy source is right for you?" Solar? Geothermal? Biofuels? Heat recovery? The answer must take into consideration a number of factors that affect the types and demands of energy usage necessary to support operations. It is possible that the best option involves more than one of these new energy technologies to provide the best energy supply. This is not a new concept as many processing or manufacturing operations are already multi-source. The regional power company provides electricity for the facilities and the machinery while a petroleum company provides the hydrocarbon based fuel for the vehicles.

The best answer for your energy requirements will very likely mean a multisource strategy. To meet this challenge, you need an advisor with expertise across the wide spectrum of energy technologies available. Nerac analysts offer a wide range of experience from battery design and engineering to green technologies to advise companies on solutions that work for them.

Nerac Inc. (http://www.nerac.com) is a global research and advisory firm for companies developing innovative products and technologies. Nerac analysts deliver custom assessments of product and technology development opportunities, competitor intelligence, intellectual property strategies, and compliance requirements through a proven blended approach to custom analysis: review of technical knowledge, investigation of intellectual property, and appraisal of business impacts. Nerac deploys analysts in diverse disciplines to help clients discover new applications, serving as a catalyst for new thinking and creative approaches to business problems or identifying strategic growth opportunities.

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