By - Jim Vess

Businesses and institutions moving slowly toward energy planning, Harvard survey finds

Energize Weekly, October 18, 2017

There is a growing concern among business leaders about rising costs and risks in the U.S. power system, but less than a third of businesses have initiated programs to address those worries, according to a survey by the Harvard Business Review Analytic Services.

The key concerns are fluctuating energy prices, the risk of business interruptions from weather-related events or cyberattacks and the competitive pressure to reduce costs—with 76 percent of the respondents strongly agreeing these are major concerns.

Nevertheless, only 28 percent said their organizations have resiliency plans in place. Even fewer—19 percent—had an energy procurement strategy with the strong backing of senior management.

The broadest initiative among the companies, hospitals and institutions whose executive responded to the survey was seeking to reduce energy consumption, with actions as simple as installing energy-saving light bulbs.

Almost 50 percent of respondents said that their operations were pursuing energy reduction opportunities on an ad hoc basis.

There are, however, a growing number of organizations moving beyond the ad hoc efforts to develop comprehensive resiliency plans and energy procurement strategies, such as building on-site power generation.

About a third of the organizations generate at least some of their own power. Among this group, the main reasons for installing on-site generation were reducing costs (71 percent), increasing operating resiliency (50 percent) and reducing carbon emissions (49 percent).

When asked which energy sources are expected to grow in the next 10 years, 77 percent said solar, followed by natural gas at 64 percent and wind at 49 percent.

Solar is a common source of on-site generated electricity. Retailers Target and Walmart are the leading solar installers, each having already added arrays to the roofs at more than 350 locations with plans to add more.

Other business concerns are also finding ways to integrate solar into their operations, a commentary accompanying the survey noted.

California-based Prologis, a global warehouse leasing company, is the third largest adopter of rooftop solar. Its warehouses aren’t as energy intensive as retail stores, so it is able to sell the power it generates to local utilities.

“We were motivated to generate clean power, but also to leverage an underutilized asset,” said Matt Singleton, senior vice president of global energy and development. “This is a for-profit activity.”

The Campbell Soup Company powers many of its industrial facilities through on-site solar arrays. The company is also using on-site solar to power its corporate headquarters in Camden, N.J.

About 40 percent of organizations surveyed also had a climate change initiative in place or plan to within the next three years. These organizations were twice as likely to generate power on-site.

The survey also found strong support for a government role in energy initiatives. Almost 90 percent of respondents said they believed the government should provide tax incentives and research funds for innovation in sustainable energy. The same margin also said businesses and municipal governments should work together to improve operational resilience.

Only 16 percent said they believed the government should have no involvement in energy innovation.

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