3D Energy
Strategy™
Driving the next level
of cost reduction
The challenge
The 3D Energy StrategyTM
As global economies grapple with the challenges
of climate change, security of supply and resource
scarcity, the energy landscape for corporate consumers
is shifting. Energy has become more complex — it is no
longer just a commodity, it needs proactive and careful
management.
At EY, we have developed an approach to help
businesses optimise energy. The 3D Energy StrategyTM
considers optimisation across three dimensions of price,
volume and time enabling businesses to:
• Use less energy overall
• Shift energy out of peak periods
Thus reducing energy cost and delivering on
corporate targets.
Energy road map
EY conducted a global survey of senior executives
at 100 energy-intensive companies with more than
US$1b each in revenues. The survey confirmed that
energy strategy has risen up corporate agendas:
• 69% agreed that energy strategy decisions are
made centrally.
550
Energy cost
US$m
• 44% agreed that issues of energy strategy
are now frequently discussed at company
board meetings.
700
Illustration
BAU growth
Optimal road map
for energy reduction
With global energy prices generally rising and
becoming increasingly more volatile, regulatory
intervention tightening and reputational pressure
growing, new risks and opportunities have emerged.
The case for active management of energy supply and
demand by large-scale consumers has become ever
more compelling.
• Pay less for each unit of energy
Today
400
1 Price
2 Volume
3 Time
2020 Energy Strategy
250
Energy strategy is now a business imperative to
build competitive advantage through innovative
energy-efficient and low-carbon projects and
processes. It is a case for change that cannot
be overlooked.
100
2012 2013 2014 2015 2016 2017 2018 2019 2020
Electricity
Gas
Fuel
Transport
Are you an energy optimising organisation?
To hedge or not
to hedge?
Price
me
Improve energy
security and
reduce energy
demand at peak
times, through
back-up
generation,
storage and
demand
response
systems
Ti
u
Vol
Have your energy
reductions flatlined?
Drive energy
efficiency
improvements
with teams in
each country;
identify and
prioritise
investments
across a global
portfolio
me
Assess global procurement strategy and identify
opportunities to source lower-cost or renewable
supply, e.g., via long-term power purchase
agreements (PPAs) direct with generators, on-site
or private wire generation
Does shifting peak
load stack up?
Our approach
EY brings global experience in the full life cycle of the
resource and energy agenda: strategy, implementation
and continuous improvement. The 3D Energy
StrategyTM will provide a practical set of next steps to
help achieve your corporate energy targets. EY will
then work with you to implement a sequence of delivery
modules to match your business needs. We engage with
CEOs and CFOs to advise on how to tackle the most
complex and difficult energy challenges facing their
organisations. Our team will bring a coordinated and
collaborative approach to working with you throughout
the course of the project, to jointly develop the best
solution and help ensure knowledge transfer.
Five-phased approach provides a sustainable life cycle
Outputs
Activities
Phase
Identify
Design
Diagnose
Deliver
Sustain
Establish vision
• Validate the case
for change and
define goals to
reduce volume,
pay less and
shift energy out
of peak periods
• Engage with
stakeholders
and benchmark
against peers
• Conduct
stakeholder
analysis
• As-is review
Audit energy and
develop strategy
• Audit ‘baseline’
energy
consumption
• Review energy/
carbon strategy
• Analyse
countries, sites
and technologies
• Consider
and appraise
investment and
procurement
options
Plan and build
business case
• Develop a detailed
business case and
investment board
paper
• Conduct financial
modelling for
preferred efficiency
and generation
option(s) and
scenarios
• Cost-reduction
programme
Implement and
integrate initiatives
• Develop
implementation plan
• Identify and evaluate
specific service/
equipment suppliers
• Assist with tax,
commercial
structuring and
finance raising
• Negotiate delivery
contracts
In-life management
• Measure
operational
effectiveness
• Quantify the
financial and
carbon savings, and
the reputational
impact
• Manage suite of
energy contracts
and monitor/verify
utility billing
• Support continuous
improvement
• High-level
energy strategy
vision and goals
• Interactive
workshop with
delivery team
• Detailed reports
for selected
countries, sites
and technologies
• Detailed energy
business case with
preferred options
• Carbon and energy
road map
• Investment plan
• Implementation plan
• Financing plan and
contract negotiation
• Commercial and
financial due
diligence
• Benefits reported
to stakeholders on
value gained
• Proposed KPIs
to drive further
improvements
Data analytics
Programme management
Why EY
We are ideally placed to assist you in meeting your
objectives. Our Energy Optimisation Practice provides:
• Independent and objective advice: We have no
affiliation with any energy supplier, technology or
project, helping to ensure you find the solutions that
are best suited to your requirements.
• Raising finance: Our team of professionals are proven
in raising finance to support your energy strategy.
Netherlands
Dirk-Jan Everts
Sustainability
Services Manager
• Innovation: We work in an environment where
technology is disrupting the status quo and data
analytics is driving new opportunities, moving beyond
conventional thinking.
• Tax optimisation: Our team of tax subsidy
professionals will identify incentives that you may be
able to benefit from in your energy projects.
• Global reach: Our award-winning Energy team has a
global reach, with live and in-depth knowledge of the
energy market.
UK and Ireland
Richard Tarboton
Energy Optimisation —
Executive Director
Germany
Robert Seiter
Executive Director
Assurance, CCaSS
Italy
Senior Manager,
France Clean Tech
and Sustainability
China and Southeast Asia
Alan Beebe
Director
Advisory —
Energy and Resources
Americas — North and South
Terry Hudgins
Senior Manager
Indirect Tax
South Africa
Lesley Ntswane
Executive Director, South Africa
Infrastructure and Energy Optimisation
Roberto Giacomelli
Director,
Italy Climate Change and
Sustainability
France
Thomas Gault
India
Sudhanshu Gupta
Director, India
Energy Optimisation and Analytics
Australia
Matt Rennie
Partner
TAS — Power and Utilities
Our value and credentials
EY | Assurance | Tax | Transactions | Advisory
EY can help you manage your exposure to rising and volatile energy
costs through our dedicated Energy Optimisation Practice. We can
recommend the most appropriate methods of sourcing renewable
energy to lower your carbon footprint and increase price security.
We can develop a strategy and road map with you to reduce energy
costs through low-cost energy procurement, energy efficiency,
load shifting and new innovative energy solutions. We can assist
with implementing the strategic energy programme, selecting
suppliers and partners, and managing financial and commercial
negotiations, ultimately achieving economic, environmental and
reputational benefits.
About EY
EY is a global leader in assurance, tax, transaction and advisory
services. The insights and quality services we deliver help build trust
and confidence in the capital markets and in economies the world
over. We develop outstanding leaders who team to deliver on our
promises to all of our stakeholders. In so doing, we play a critical role
in building a better working world for our people, for our clients and for
our communities.
From boiler room to boardroom: optimizing
the corporate energy mix. Organisations are
meeting the challenge of transitioning to a
low-carbon and resource-efficient economy
through proactive energy strategies with
C-suite engagement.
RECAI — Renewable Energy Country
Attractiveness Index. Leveraging our transaction
market experience, sector knowledge and
global reach, the RECAI ranks 40 countries on
the attractiveness of their renewable energy
investment and deployment opportunities.
EY refers to the global organization, and may refer to one or more,
of the member firms of Ernst & Young Global Limited, each of which is
a separate legal entity. Ernst & Young Global Limited, a UK company
limited by guarantee, does not provide services to clients. For more
information about our organization, please visit ey.com.
About EY’s Global Power & Utilities Sector
In a world of uncertainty, changing regulatory frameworks and
environmental challenges, companies need to maintain a secure and
reliable energy supply, while reducing costs and exposure to carbon
emissions. EY’s Global Power & Utilities Sector brings together a
worldwide team of professionals to help you succeed — a team with
deep technical experience in providing assurance, tax, transaction
and strategic advisory services. The Sector team works to anticipate
market trends, identify their implications and develop points of view
on relevant sector issues. Ultimately, this team enables us to help you
meet your goals and compete more effectively.
© 2015 EYGM Limited.
All Rights Reserved.
EYG no. DX0354
Utilities Unbundled: Our global power and
utilities magazine provides new perspectives
on the sector and insight from leading industry
figures, comment on key issues and analysis of
the latest trends.
For further insights on energy, visit the EY Energy Hub
ey.com/UK/en/Services/Specialty-Services/Energy-hub to
find timely and topical publications designed to help you
understand the issues and provide you with valuable insights.
Contacts
UK
US
Richard Tarboton
Energy Optimisation —
Executive Director
+44 20 7951 0490
[email protected]
Terry Hudgins
Senior Manager
Indirect Tax
+1 602 322 3679
[email protected]
UK
Australia
Phil Dominy
Energy Corporate Finance —
Assistant Director
+44 1392 284 499
[email protected]
Matt Rennie
Partner
TAS — Power and Utilities
+61 7 3011 3239
[email protected]
Germany
China
Robert Seiter
Executive Director
Assurance, CCaSS
+49 30 25471 21415
[email protected]
Hamish Gilder
Director
Advisory
+852 9 6666 158
[email protected]
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This material has been prepared for general informational purposes only and is not intended
to be relied upon as accounting, tax or other professional advice. Please refer to your advisors
for specific advice.
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