If you are looking for ways to optimize your energy management, you might want to consider procuring energy from multiple sources. This can help you reduce costs, increase reliability, diversify your portfolio, and lower your environmental impact. In this article, we will explain how you can procure energy from multiple sources and what benefits and challenges you might face.
The first step to procure energy from multiple sources is to know what options are available and suitable for your needs. Depending on your location, budget, and goals, you might be able to access different types of energy sources, such as grid electricity, natural gas, solar, wind, hydro, biomass, or geothermal. You should also research the regulations, incentives, and contracts that apply to each source and how they affect your procurement strategy.
Depending on geographical location and availability of different form of energy, options for energy needs may be different. Hence, it is important to understand the energy needs of the organisation as well as the options available. For example, a location located in a volcanic zone may have access to a geothermal energy network that could supply heat and electricity to the site. Another site, located in a small country, may not have access to renewable energy if it is not imported to the country. Hence, to get renewable energy, they may need to get Renewable Energy Certificates (RECs) as an interim until the infrastructure and governance allows for renewable energy to be imported. However, RECs may be costly due to lack of supply.
If regulatory choice is available for open access, then consumer may look for option other than local power distribution supply. Landed cost and reliability in supply will be important.
The next step is to assess your current and future energy demand and how it varies throughout the day, week, month, or year. This will help you determine how much energy you need from each source and how to balance them. For example, you might want to use more solar or wind energy when they are abundant and cheaper, and switch to grid electricity or natural gas when they are scarce or more expensive. You should also factor in your peak demand, load profile, and backup requirements.
Understanding your need and risk appetite will enable a choice of energy to be made. Renewables are climate friendly but they are intermittent and highly dependent on weather. Hence, a high amount of renewable energy mix would mean lesser energy security and activities may have to scale down unless one has sufficient energy storage. HIn this case, one would not want to cut back on fossil fuel totally and a cost benefit analysis would have to be undertaken.
Your underlying energy provide, usage style and pattern are vital to making the best choice when it comes to your energy mix.
For procuring energy from multiple sources assessment of block wise power demand pattern for short, med and long term will give idea on the scheduling needs and its impact for grid stability.
The third step is to compare the costs of procuring energy from multiple sources and how they affect your bottom line. You should consider both the upfront and ongoing costs, such as installation, maintenance, operation, transmission, distribution, and taxes. You should also account for the price volatility, risk, and uncertainty of each source and how they affect your budget and cash flow. You might want to use tools such as net present value, payback period, or levelized cost of energy to compare the costs.
Landed cost of power in comparison to power discom based on HT or LT category will depend on the one time cost associate with alternate sourcing along with recurring items. Here based on point of connection for supply and use need to consider the losses in transmission and distribution.
The fourth step is to choose the optimal mix of energy sources that meets your needs and preferences. You should weigh the benefits and challenges of each source and how they complement or compete with each other. You should also consider the flexibility, scalability, and adaptability of your mix and how it can respond to changes in demand, supply, or market conditions. You might want to use tools such as optimization models, scenario analysis, or sensitivity analysis to choose your mix.
The fifth step is to negotiate the contracts that govern your procurement of energy from multiple sources. You should seek the best terms and conditions that suit your mix and protect your interests. You should also be aware of the different types of contracts, such as fixed-price, variable-price, hedging, power purchase agreements, or green certificates. You should also review the clauses, obligations, penalties, and disputes that might arise from each contract.
The final step is to monitor your performance and evaluate how well you are procuring energy from multiple sources. You should track your energy consumption, costs, savings, reliability, quality, and emissions. You should also compare your performance with your targets, benchmarks, or standards. You should also identify any gaps, issues, or opportunities that might arise from your procurement strategy and adjust accordingly.