Energy Efficiency is a way of managing the amount of energy used in producing a certain amount of output. The aim is to achieve more output with the same (or even less) amount of input. Typically, the improvements adopted are generally achieved by implementing a more efficient technology or production processes to reduce energy losses. For instance, compact fluorescent lights use one-third the energy of incandescent lights and may last 6 to 10 times longer.
Over the past decade, many countries have set ambitious targets on renewable energy, looking at non-fossil-fuel sources as a way to boost their supply. However, equally important is the need to curtail the demand for energy, and manage energy usage efficiently instead of just finding more sources of energy.
Electricity and gas prices have been climbing steadily. In countries like Singapore and the Philippines where electricity costs are not subsidized, this cost has a huge impact on operational expenses. A study published by the OECD recently predicted Brent crude oil prices almost doubling by 2020 . The report came as the EIA forecasted a steady rise in oil prices leading to 2040 . This should come as no surprise to many companies as their utility bills arrive every month. Companies face a multitude of challenges today. To survive competition, companies know they need to remain efficient, cost-competitive and versatile in doing business – CEOs, operations and finance directors are continually reviewing their expenses.
Up until a few years ago, energy was seen as a fixed-cost item, much like rental and overheads. Amidst efforts to reduce expenses, energy simply did not stand out as an opportunity for cost-saving. However, high energy costs have increasingly become a striking item on the income statement, directly affecting business profitability. This has compelled many companies to take calculated steps to manage and improve their energy consumption.