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Brain circuits

Four ways to help save money on energy costs

Published 29 November 2021 in Brain circuits • 2 min read

The price of energy is always volatile, but it has been hitting highs lately and extreme weather related to climate change is a strong indicator costs may not dip any time soon.

Invest in lower cost energy infrastructure

Many companies have put off real investment in energy-efficient structures because of the expense, but now may be time to do so to save money in the long run. Buildings are responsible for 40% of the world’s energy consumption, but you can upgrade them with energy efficient sensors that control ventilation, lights and other things that waste energy.

Optimize production processes

To shield your manufacturing processes from volatile prices, it may now be economically justifiable to invest in waste heat generated in the production process to power other activities.

Relocate energy-intensive activities to lower-cost countries with abundant supply

The massive rise of computing and digital products means that data centers now account for around 1% of global energy use. Cloud computing providers have sought to improve efficiency by locating data centers in cold environments where there is access to abundant power.

Invest in green energy generation

For some companies that have cost-effective access to a source of energy that no-one is using, it may make sense to invest in generating your own energy. I do not expect many companies to go down this route, but it is worth considering if you have such access.

Some of these solutions may have been expensive in the past, but as energy costs continue to climb and show no sign of leveling, they could be money savers in the long run, and help prove that your company is serious about its ESG goals.

Further reading: 

Four strategies to make your energy supply more resilient to price spikes by Carlos Cardon

Authors

Supply chain

Carlos Cordon

Professor of Strategy and Supply Chain Management

Carlos Cordon is a Professor of Strategy and Supply Chain Management. Professor Cordon’s areas of interest are digital value chains, supply and demand chain management, digital lean, and process management.

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