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Deloitte: Companies Seek Big Cuts in Energy Costs

Companies are targeting, on average, a 25 percent reduction in their energy consumption or cost, according to a survey by Deloitte.

The study, “reSources 2011,” found that 90 percent of companies have set specific goals for their electricity and energy management, and 76 percent have or are setting goals related to reducing electricity cost and consumption.

It also found that 71 percent have set or are in the process of setting goals for improving buildings’ energy efficiency, and 56 percent of companies have or will have goals aimed at improving profitability through electricity reduction. Other, less popular energy-related goals included carbon footprint reduction (42 percent), reducing byproducts (41 percent), reusing byproducts (33 percent), and energy recovery or production (32 percent).

Conducted with strategy and market research firm The Harrison Group, the study polled more than 400 business decision-makers responsible for their company’s energy decisions or energy policy.

About 70 percent of companies said cost-cutting is a driver of their energy management goals, and 53 percent said they have set energy-related goals at least partly because it is “the right thing to do”.

Asked the end-date of various energy-reduction goals, companies most frequently said two to three years – but the averages were far longer (see chart). Average timeframes ranged from 3.8 years for electricity reduction/cost reduction to 5.5 years for carbon footprint reduction.

The most popular ongoing tactics used by respondents included installing CFLs when traditional bulbs burn out (49 percent), reviewing water use and recycling (45 percent) and using timers and sensors to control equipment powering (40 percent).

The survey found that 31 percent of firms have goals to generate electricity on-site. Companies that are already generating electricity use an average of 69 percent of that electricity themselves, selling an average of 31 percent back to the grid.

Companies with on-site generation say they are currently generating 36 percent of their electricity and 36 percent of their thermal needs, and expect those numbers to rise to 46 and 39 percent over the next three years.

The survey found that the largest barrier to companies meeting their energy management goals is capital and funding challenges (50 percent of respondents), followed by lack of management commitment or incentives (44 percent), and staffing and strategic challenges (both at 39 percent).

Of those polled, 60 percent think electricity prices will rise by at least six percent in the next one to two years. Only six percent of respondents think prices will hold steady or drop.

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