Supply-side Strategy Implications on Demand-side Opportunities

Abstract

Major changes in the gas and electric markets have created a
range of risk management products to support supply-side planning.
The supply-side goal is usually to balance a client’s tolerance for cost
fluctuations with the lowest possible price. There are many implications
a supply strategy has on demand-side opportunities. They should be
considered carefully. This integration of supply and demand-side plan-
ning often does not take place because they have been thought of as two
independent disciplines. They require two separate sets of expertise.
Historically, demand-side planning has been a responsibility for
engineering and operations while supply-side planning was the domain
of purchasing and procurement. The integration of supply and demand
is critical to control of your total energy picture. The right hand needs
to know what the left hand is doing. There are a number of situations
that illustrate where an integrated supply and demand-side approach is
vitally important.
This article will examine two situations as examples. We will show
how your supply-side strategy affects your true energy costs and how
that is different than in the past. We will also show how a supply-side
strategy gives new triggers for demand-side actions.