Organisations, and particularly their financial leaders, are under immense pressure today to improve efficiency and reduce costs. With cashflow under threat from the slowing economy, it’s more important than ever to look for savings anywhere they can be found.
The good news is that there is a way to save money in today’s economy that doesn’t force you to compromise on other business values and priorities. In fact, it’s something that most businesses were planning to do anyway. I’m talking about renewable energy.
How does COVID-19 affect the situation?
As millions of people are staying at home due to COVID-19, fossil fuel use around the world has declined dramatically. Many businesses may be paying less for ‘Brown Power’ from the grid today as a result, especially as oil prices have fallen in the wake of COVID-19. The trouble is, those savings are only temporary, and don’t offer any advantage against competitors who are also seeing the same benefits. As employees return to their usual workplaces, the cost of facilities management will rise. What’s more, energy consumption costs are expected to increase over the long term, with greater electrification and society transitioning to e-mobility. All of this will add up to a sharp shock.
Is renewable energy still receiving attention during this crisis?
Renewable energy can be as much as 40% cheaper per kilowatt-hour than the delivered grid price. There are also huge environmental benefits from switching to clean energy, as well as the positive impact on customer relations, CSR and supply chain compliance. Clean energy boosts your Environmental, Social and Governance (ESG) ratings too, which has a positive impact on your share price.
There is a lot of discussion about a ‘green recovery’, where governments attempt to rebuild their economies with investment in the renewable energy sector – and businesses will be under public scrutiny to do the same.
You are saying that it’s possible to save money with renewable energy?
Yes. One of the reasons is that you actually don’t need to invest anything to start benefiting from cheap, reliable, and clean power. Most businesses are unaware that they can start generating sustainable power from solar panels very quickly, with no overhead costs, no installation fees and no operations or maintenance. Businesses with large premises, in the manufacturing sector for example, are ideally placed to take advantage of this kind of fully managed service, by simply putting unused space to work.
I won’t try to hide my vested interest here; this is what we do at Statkraft. But I do think now is an ideal time for financial decision makers to really scrutinise their energy options – any savings will help ease the hit from energy consumption when workers return and business resumes as usual. It frees up funds that are vital to balancing budgets right now and it sets up your business for a low-carbon future, which is where we all want to get to anyway. It’s just good business.