Why should companies budget and forecast for energy costs?
At the annual meetings where executives discuss the following year’s business proposals and set budgets, energy needs are typically overlooked; this exposes companies to recurring risks, capital losses and operational inefficiencies. By budgeting and forecasting their needs and setting aside funds to cover them for the year, companies can reduce risks that may turn into real issues later.
The most efficient way for companies to forecast and budget for expected energy costs is to use an outside adviser. Using its digital platform Energy Exchange, Enel X can, among other things, help you create an energy budget checklist based on your individual requirements, growth plans and budget needs. This is based on historic cost and usage data that we track company-wide.
Our consultants analyse data to produce insights, monitor market trends, identify regulatory changes and all the other factors that need to be considered when budgeting for energy costs. Key requirements in setting a plan for action on energy use within the company include:
awareness that tax changes may require alterations to the budget and that utility rates may fluctuate
contract expiry dates must be monitored
awareness of how you currently use energy
changes to operations may increase production rates and therefore energy needs
the need to align with your risk management strategy
awareness of changes to budgets that may be needed at various sites
Budgeting and forecasting cannot be dealt with in isolation. Assessment of progress made is an integral part of the process and allows adjustments to the budget to be made if required. The advantage of having Enel X as a strategic partner is that clients can see for themselves how their energy costs stack up and they can thus re-allocate funds for the future accordingly; this becomes possible with the Energy Exchange platform. The ultimate aim is to be ready for changes in the energy market that might damage the business, thereby maximising the long-term value of the company.