Energy is an important component of every college or university’s total budget. While the cost of energy is far from the largest piece, the potential for annual price variability can result in significant swings to the institution’s budget. Energy supply and demand, regulations, renewable energy incentives, and innovations in technologies over the past several decades have all had significant impact on energy availability and cost. In addition, the focus on sustainability in higher education—especially on goals to reduce greenhouse gas emissions—has caused institutions to seek to reduce the use of fossil fuels and increase the use of renewable energy sources. These drivers, plus many others that will likely change in the energy sector in the coming decade, make it vitally important that the senior facility officer understand and plan for these strategically important components of the institution’s energy plan:
- Securing a reliable source and type of energy to support the institution’s enterprise.
- Assuring reliability and resiliency of the energy supply and business processes.
- Purchasing energy resources at the optimal price points while hedging for price risk.
- Optimizing flexibility of energy supply and generation choices as a means to hedge price and supply risks.
- Aggressively reducing energy use.
- Integrating sustainability goals such as reducing or eliminating the use of fossil fuels into long-term strategies concerning energy procurement and generation.
The options for energy sources, the need for energy security and reliability, the external political and regulatory environment, the financial implications, the rapid expansion of innovations in technologies and renewable energy, and the growing institutional commitments to reducing greenhouse gas emissions and the use of fossil fuels all contribute to making this topic increasingly complex.
As such, it is critically important for facility leaders to be thoroughly familiar with all aspects of energy types, procurement approaches, supply chain issues, technological innovations, trends, and consumption.