Energy Reduction Assets
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Energy Reduction Assets (ERAs) are revenue streams that are created by tracking the unspent portion of traditional energy usage.[clarification needed]
The reduction of expected energy use is a potential revenue source that may be manipulated to improve business performance and reduce waste and environmental impacts. In 2011, the World Economic Forum reported that personal, digital data is a new asset class, generating a new wave of opportunity for economic and societal value creation.[1] Due to dramatic advances in web-based monitoring, real-time data analytics and utilities using peak pricing, energy reduction is now becoming a tangible asset that companies can measure, manage, procure and sell.
For energy reduction, capturing data is the means to tap into energy savings, which, over time, become an asset. In order to implement efficiency measures and generate revenue streams, it is important to determine areas of least efficiency. This will provide the platform for accurately focusing efforts to achieve the greatest returns on investment.[2]
Generating an Energy Reduction Asset
There are two ways to generate an energy reduction asset: through an energy efficiency project or by participating in a demand response program. Energy efficiency results in long-term savings, while Demand Response programs produce immediate earnings/revenue streams.
Energy efficiency projects have proven to be valuable to organizations in cost savings, as well as in reducing the carbon footprint, conservation and other positive environmental impacts. Energy efficiency measures include building control upgrades, updating HVAC, lighting and mechanical systems that use less energy per unit of service they provide. Essentially, these measures aim to reduce the amount of energy needed to supply a particular service, which means less energy is used and less money is spent. Companies/consumers can use the money saved over time through energy efficiency, as assets to sell and invest in the market.
These “earnings” are the ERAs generated through reduced energy usage during peak demand hours. In essence, the market for demand response stems from the end users ability to “sell” the energy not used when they curtail usage—at the same prices as real megawatts of generated electricity. This process of selling a theoretical unit of power—the
Growing success of energy efficiency industry
Utilizing new technologies to gather data and implement energy efficiency measures is key to generating ERAs. The environmental and economic benefits of reducing energy usage are becoming increasingly apparent throughout the country.
See also
- Demand response
- Carbon footprint
- Peak demand
- Energy demand management
- Negawatt
- Energy efficient use
References
- ^ http://www3.weforum.org/docs/WEF_ITTC_PersonalDataNewAsset_Report_2011.pdf [bare URL PDF]
- ^ "Blog".
- ^ "Joule Assets Makes Sense of the Demand Response Market | Greentech Media".
- ^ "How the ESCO Market for Efficiency Can Continue Expanding | Greentech Media".
- ^ http://www.epa.gov/cleanenergy/documents/suca/cost-effectiveness.pdf [bare URL PDF]