C-suite execs anticipate 15 percent rise in energy costs

Summary:More than 38 percent of global company executives say the CEO now has the final say in energy sourcing, reflecting the increasingly strategic nature of this decision.

More than one-thirds of top executives managing global companies with especially energy-intensive loads expect their energy costs to rise at least 15 percent over the next five years, according to new data from Ernst & Young.

More than half of the respondents considered for the company's 2012 Global Annual Cleantech Insights and Trends report said that energy expenses accounted for at least 5 percent of their overall operating costs; 22 percent of them said it represented at least 20 percent.

"As a result, energy efficiency measures, company self-generation of energy and integration of renewable energy into the corporate energy mix are all being implemented at increasing rates to meet these ends and are set to accelerate further over the next five years," said Gil Forer, Ernst & Young's Global Cleantech Leader.

Specifically, 67 percent of the respondents said they plan to increase their portfolio of company-owned renewable energy generation options in the next five years. More than 40 percent of them already generate power sourced from renewable technologies including solar, wind, bioenergy and other options, according to the Ernst & Young research.

The findings illustrate the increasingly strategic nature of energy decisions, both as a cost management measure and as a way of creating a buffer against supply constraints. It also underscores why some many companies with vast real estate portfolios -- notably retailers like IKEA and Walmart -- are so busy investing in on-site renewable generation capacity.

More than half of them (52 percent) said they will consciously work to decrease their dependence on fossil fuels including oil and coal. Roughly that same amount already source power generated by renewable sources, although it is only a small portion of their total energy mix.

This post was originally published on Smartplanet.com

Topics: Innovation

About

Heather Clancy is an award-winning business journalist specializing in transformative technology and innovation. Her articles have appeared in Entrepreneur, Fortune Small Business, The International Herald Tribune and The New York Times. In a past corporate life, Heather was editor of Computer Reseller News. She started her journalism lif... Full Bio

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