July 2021 - Quarterly Market Letter
On behalf of the team at 5, I am pleased to forward our market letter for the second quarter of...
When most clients think about energy deregulation, they do not spend enough time understanding the demand-side (also called the delivery side) of the value chain and instead focus mostly on selecting a retail supplier with the best rate, term, and product. This narrow view leads to lost opportunity as clients miss out on the chance to optimize their load profile and further reduce their energy costs. Load optimization involves a strategic approach to understanding and avoiding the demand-based rates charged by utility providers (poles and wires companies) and effectively arbitraging these tariffs.
5’s team of analysts and engineers work alongside the client’s operations and finance teams to determine what modifications a client can make to optimize their load. The process starts with an in-depth analysis of the client’s peak demand, hourly usage, and overall load profile that is complemented by a series of discovery sessions to learn more about the client’s energy assets, operations, and goals. 5 then develops a plan that may involve any number of changes, including shifts in the client’s on-peak and off-peak power consumption, cycling through equipment to avoid unnecessary peaks, utilizing variable speed drives, adjusting building controls and start-up schedules to reduce peak load during morning ramp-up, and designing future load shapes to match the best cost scenarios for each specific market.
With 5’s customized approach to load optimization, the solutions are often very creative and client-specific. In several situations, 5 advised clients to adjust their controls to pre-cool large chiller loops and then coast through the peak periods of the day using the pre-cooled water that creates air comfort in the facility. This example allows clients to engage in peak load management and load optimization to reduce costs on both the supply-side and demand-side of the equation. By working with 5, clients can focus on all aspects of their energy cost control and rely on a single point of contact to help them through it all.
Contact Us to learn about how 5 can help with load optimization as part of a comprehensive energy strategy.