GUIDELINES FOR AN INTEGRATED ENERGY STRATEGY

Helping companies achieve their sustainable energy objectives

Solutions

The solutions element contains the measures you deploy to improve energy efficiency, transition to low-carbon energy sources and reduce climate impact. Below is a simple process to evaluate and prioritize these measures.

What you should be aiming for?

  • Carry out a comprehensive assessment of options and apply financial, environmental and social decision-making criteria;
  • Prioritize options based on their net benefits to the company and society, focusing firstly on the higher impact measures where there is a clear route to delivery;
  • Coordinate strategy implementation with other business priorities to minimize disruption.

Discover BT’s solutions for an integrated energy strategy

Introducing the three categories that your strategy will consider

To implement your integrated energy strategy, you need to prioritize the measures that will deliver your vision. There are three main measures.

In all three measures, collaboration with upstream and downstream stakeholders is key to successful implementation. Suppliers play a major role in improving energy efficiency and reducing GHG emissions through the products and services they supply.

Engagement with customers can potentially drive demand for products and services that are more energy efficient or lower carbon, as well as finding more efficient ways of producing goods or supplying services.

Collaboration with upstream and downstream stakeholders has the potential to identify wasted energy resources and create solutions that introduce circularity.

Assessing strategic options using a broader range of criteria

Developing your integrated energy strategy involves assessing all energy inputs and outputs, and considering how these could become more efficient, more circular and low-carbon by engaging with your supply chain and customers. This means that the measures you will deploy will need to be evaluated against a broader range of criteria than traditionally used.

The choices that you make will ultimately depend on a combination of:

  • How fast you want to decarbonize energy and the opportunities that exist to decarbonize;
  • Your time horizon for making investment decisions;
  • The role you want to play in your energy-related value chain and the opportunities that exist to play that role;
  • The opportunities to collaborate with upstream and downstream stakeholders;
  • Your desire to capture new commercial opportunities and realize competitive advantage;
  • Your appetite for risk and for exploring new opportunities.

We have outlined a simple process that can be applied to any energy input or output.

We have outlined a simple process that can be applied to any energy input or output.

Below, we suggest new criteria to inform your decision-making in two stages: identify and assess options and select suppliers/partners. Ultimately, your corporate and sustainability strategy will also inform the criteria you apply.

Identify and assess options
PROCESS TRADITIONALLY USED CRITERIA ADDITIONAL CRITERIA

1. Evaluate your energy inputs

  • Evaluate how energy is currently used by buildings, equipment, fleet and other assets, as well as the resulting GHG emissions
  • Understand why you are using these energy inputs and technologies
  • Understand historic and future demand for each energy input
  • Challenge what’s perceived as needed, thinking about the outcomes not just the energy inputs
  • Identify energy efficient and low-carbon options for the energy input
  • Consider new ways of delivering the outcome of that energy input

2. Evaluate your energy outputs

  • Evaluate how electricity, hot or cold water, steam, gas or other fuels are wasted or underutilized
  • Identify new solutions for using energy outputs that are wasted

3. Engage with suppliers/partners to gather market intelligence

  • Assess the market to understand what options are available, what competitors are doing and what new innovations are expected
  • Understand supplier and partner perceptions of your company, your needs and your aims
  • Identify local partners and by-products/wastes that may be available as alternative inputs
  • Explore what unintended consequences may be linked to different energy sources, e.g. water, access to basic needs, etc.

4. Define the business need and complete the options appraisal

  • Re-confirm or change the business need
  • Identify and agree on the criteria that will be applied to evaluate your options
  • Carry out a feasibility and risk review by applying the criteria
  • Confirm the most suitable option to meet the business need

Life-cycle financial return: Assessing the capital investment, operational expenditure and cost savings over the whole life span of the asset. Evaluation of metrics including return on investment, internal rate of return and net present value.

Operational risks and opportunities: What are the risks and benefits of this solution over other options?

Solution maturity: How well established is the solution?

Solution availability: How many suppliers are there for this solution?

Supply chain: How resilient is the supply chain for this solution?

Economic indicators:

  • Cost of carbon using a MACC
  • Cost of meeting environmental regulations associated with the specific energy input or technology solution
  • Financial incentives associated with using the specific energy input or technology solution

Environmental indicators across the value chain:

  • Life-cycle GHG emissions
  • Life-cycle impact on air and water
  • Life-cycle impact on biodiversity (such as habitat degradation or pollution from extraction, production or waste disposal)
  • Likelihood and impact of pollution events

Socio-economic indicators across the value chain:

  • Human rights and labor practices
  • Community involvement and development
  • Socio-economic impact on suppliers, such as job creation
  • Socio-economic impact on customers, such as cost savings or new revenue generation opportunities
  • Socio-economic impact on other stakeholders, such as tier two supplier or local communities
Stage: Identify and assess options - Process

1. Evaluate your energy inputs

  • Evaluate how energy is currently used by buildings, equipment, fleet and other assets, as well as the resulting GHG emissions
  • Understand why you are using these energy inputs and technologies
  • Understand historic and future demand for each energy input
  • Challenge what’s perceived as needed, thinking about the outcomes not just the energy inputs
  • Identify energy efficient and low-carbon options for the energy input
  • Consider new ways of delivering the outcome of that energy input

2. Evaluate your energy outputs

  • Evaluate how electricity, hot or cold water, steam, gas or other fuels are wasted or underutilized
  • Identify new solutions for using energy outputs that are wasted

3. Engage with suppliers/partners to gather market intelligence

  • Assess the market to understand what options are available, what competitors are doing and what new innovations are expected
  • Understand supplier and partner perceptions of your company, your needs and your aims
  • Identify local partners and by-products/wastes that may be available as alternative inputs
  • Explore what unintended consequences may be linked to different energy sources, e.g. water, access to basic needs, etc.

4. Define the business need and complete the options appraisal

  • Re-confirm or change the business need
  • Identify and agree on the criteria that will be applied to evaluate your options
  • Carry out a feasibility and risk review by applying the criteria
  • Confirm the most suitable option to meet the business need
Stage: Identify and assess options - Traditionally used criteria

Life-cycle financial return: Assessing the capital investment, operational expenditure and cost savings over the whole life span of the asset. Evaluation of metrics including return on investment, internal rate of return and net present value.

Operational risks and opportunities: What are the risks and benefits of this solution over other options?

Solution maturity: How well established is the solution?

Solution availability: How many suppliers are there for this solution?

Supply chain: How resilient is the supply chain for this solution?
Stage: Identify and assess options - Additional Criteria

Economic indicators:

  • Cost of carbon using a MACC
  • Cost of meeting environmental regulations associated with the specific energy input or technology solution
  • Financial incentives associated with using the specific energy input or technology solution

Environmental indicators across the value chain:

  • Life-cycle GHG emissions
  • Life-cycle impact on air and water
  • Life-cycle impact on biodiversity (such as habitat degradation or pollution from extraction, production or waste disposal)
  • Likelihood and impact of pollution events

Socio-economic indicators across the value chain:

  • Human rights and labor practices
  • Community involvement and development
  • Socio-economic impact on suppliers, such as job creation
  • Socio-economic impact on customers, such as cost savings or new revenue generation opportunities
  • Socio-economic impact on other stakeholders, such as tier two supplier or local communities
Select suppliers/partners
PROCESS TRADITIONALLY USED CRITERIA ADDITIONAL CRITERIA
  1. Request for information
  2. Selection of suppliers to involve in tender process
  3. Determine supplier evaluation criteria and assign weighting
  4. Define tender specification (for a pilot or a full implementation)
  5. Request proposals
  6. Supplier evaluation
  7. Negotiation
  8. Contract award
 Full range of quantitative and qualitative supplier and measure evaluation criteria to assess financial characteristics, supplier quality, track record, and operational performance. In addition to the new criteria included above, it’s important to consider:

  • Supplier and technology specific energy and carbon performance characteristics
  • Supplier alignment with your strategic objectives and your values
  • Willingness of the supplier to be collaborative and innovative
Select suppliers/partners - Process
  1. Request for information
  2. Selection of suppliers to involve in tender process
  3. Determine supplier evaluation criteria and assign weighting
  4. Define tender specification (for a pilot or a full implementation)
  5. Request proposals
  6. Supplier evaluation
  7. Negotiation
  8. Contract award
Select suppliers/partners - Traditionally used criteria
Full range of quantitative and qualitative supplier and measure evaluation criteria to assess financial characteristics, supplier quality, track record, and operational performance.
Select suppliers/partners - Additional criteria

In addition to the new criteria included above, it’s important to consider:

  • Supplier and technology specific energy and carbon performance characteristics
  • Supplier alignment with your strategic objectives and your values
  • Willingness of the supplier to be collaborative and innovative

The recommended route is to begin with pilot projects to reduce your risk exposure. Measure the impact of pilots by collecting real data and getting insightful feedback from project stakeholders. This will help to obtain buy-in from internal stakeholders, while supporting and accelerating implementation and achievement of your strategy.


 TOP TIPS
  • Identify the buildings, equipment or processes that are the most significant sources of consumption and/or GHG emissions. Focus your option identification on those first.
  • Assess the energy resources that your company doesn’t fully utilize (including waste streams, by-products, or energy outputs that are not captured or stored) and consider how they could be better utilized by your company or how they could be captured and sold to other companies.
  • Prioritize projects that have the most material financial, environmental and social impact, coordinate project implementation with other business priorities and initiatives.

QUESTIONS TO CONSIDER
  • Where will energy efficiency, low-carbon energy sources, storage and control technologies have maximum impact?
  • How can you integrate measures with long-term maintenance plans for facilities (e.g. align the timing of the energy measure with a major facility upgrade)?
  • Do you generate heating or cooling that is wasted and could potentially be used internally or by others?
  • Do you produce any by-products that could be converted into energy?
  • Are there important trade-offs with other environmental and social impacts that you need to carefully consider, e.g. water use, access to energy?
  • Are there opportunities to establish partnerships to share energy resources?
  • What’s your appetite for innovation, risk or new opportunities?
  • How can your energy suppliers contribute to your carbon and energy goals?
  • Are there opportunities for carbon sequestration using land you own or manage, or in your supply chain?
<

Internal and external engagement

Copyright © 2024
World Business Council for Sustainable Development

All rights reserved | Privacy Policy

Follow us

Links

wbcsd.org
Careers
Virtual event series

Contacts

Avenue du Bouchet 2bis,
1209 Geneva,
Switzerland

Tel: +41 (22) 839 3100

How to find us

Share This