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Energy-as-a-Service: Charting a Path Through Complexity

June 24, 2016 By Carl Weinschenk

handshakeThe military has an intensely important function, adequate funding – even in tough economic times – and leadership whose mandate is simple: Always be ready. For that reason, it is at the forefront on energy issues.

Federal News Radio this week posted a story on the use of energy-as-a-service (EaaS) by the Air Force. The idea is a fairly simple one that should resonate with multi-site businesses: The integration of new and complex new energy technologies – on-site generation, storage, sub-metering and what seems like scores of others – is extremely challenging. In addition, the needs of each facility is unique. A cookie-cutter approach imposed from above won’t work.

The military is very active in renewables and storage because of the need to be independent of the grid in case of physical or cyber attack. The Air Force’s task is not easy, though, according to the story:

It’s launched more than 300 renewable energy projects to date, but each of them has involved arduous base-by-base negotiations involving local electric companies, state utility regulators and private financiers, all of which rely in some part on a hodgepodge of legal authorities that permit DoD to partner with private sector energy companies, said Mark Correll, the deputy assistant secretary of the Air Force for environment, safety and infrastructure.

The piece describes the complexity of working through such arrangements in different places laboring under different rules and regulations. The concept still is in its infancy.

The Air Force’s problem – that the world of energy is growing far more complicated and isn’t governed under a consistent set of rules – is not unique. The reaction of the Air Force, and increasingly, large organizations, is to move to an “as-a-service” model. This, perhaps without the name, has been happening by default for some time.

Such efforts happen gradually: A multinational organization will naturally attempt to find efficiencies across its holdings. The likelihood is that these efforts will become more common and offered by dedicated providers. For example Edison International, the parent of Southern California Edison, recently launched Edison Energy. The new organization is comprised of four acquired companies — SoCore Energy, ENERActive Solutions, Delta Energy Services and Altenex.

The mission, according to the story on the website Power, is to help companies adapt:

Rather than providing energy to its clients, Edison Energy will help them identify solutions and design customized systems to meet their needs and goals in the most cost-effective and sustainable fashion, while managing their exposure to energy risks.

Edison Energy offers a nicely done explanation of what has changed. Much of this will be very familiar to energy managers and their bosses. The bottom line is that the energy industry at every level is more complex (and exciting): The ways in which energy is generated, distributed, measured and managed in a building; the distribution of that energy from the source to the end user; the ability of the end user to virtually or actually contribute energy to the grid and the way in which energy is regulated at the local, regional, state and federal level. The way in which these changes manifest themselves in a particular building, of course, depends upon the infrastructure in that building.

These initiatives likely will grow more comprehensive. For instance, water and waste may be added to the mix. These aren’t, strictly speaking, energy issues. But they are deeply related. It is likely in the future it is likely that all such services at some level will be coordinated by a single provider or a team of federated firms.

Keeping abreast of all this is difficult for a single structure. The difficulty of doing so explodes when an organization operates multiple buildings in different states and countries.

The answer appears to energy-as-a-service, an approach which is best defined as holistic, portfolio-wide oversight of an organization’s overall energy operations.

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