Samil PwC "In the Era of Energy Crisis, Demand Management 'Powerchanger' Companies Emerge"

Report Published: "Demand Management Over Large-Scale Facility Investment
...Cost Reduction, Securing Energy Resilience"

As energy prices rise amid a turbulent international situation, the burden on domestic companies is increasing. In the era of energy crisis, there is a growing argument that companies should focus more on managing energy ‘demand’ rather than ‘supply.’

On the 26th, Samil PwC Sustainability Platform published a recent report titled “Energy Transition: The Journey Toward Net Zero ? The Importance of Energy Demand Management,” highlighting the significance of managing energy demand and presenting four approaches. The report suggests that actively managing energy demand within a feasible scope can reduce costs more effectively than large-scale investments in facility construction.

In particular, the report emphasized that before demand management, companies need to understand energy consumption across their entire value chain, redefine their roles, and establish sustainability that creates new value. It also stressed the importance of building a virtuous cycle of energy, continuously managing it, monitoring performance, forming dedicated teams to improve issues, and focusing on securing funding.

4 Energy Demand Management Methods for Corporate Value Creation [Provided by Samil PwC]

The energy demand management measures proposed include ▲ optimizing energy demand ▲ securing energy independence ▲ expanding interaction with the market ▲ electrification of facilities. The first measure is to save energy by improving energy efficiency and optimizing usage. The report analyzed through corporate cases that saving energy can reduce costs and carbon emissions, and secure resilience against sharp energy price hikes. For example, a European manufacturer reduced energy consumption by 10%, annual energy expenditure by 2 million euros, and annual carbon dioxide emissions by approximately 3,000 metric tons through smart products, LED lighting installation, and applying heating and cooling technologies optimized for buildings.

The second measure is to secure energy independence by installing self-owned devices and equipment. According to recent data released by the Korea International Trade Association, 60% of domestic companies participating in the RE100 (100% Renewable Energy) initiative currently produce renewable energy for their own consumption. This helps reduce cost burdens, meets the renewable energy usage demands of global customers and partners, and enhances competitiveness. It also provides advantages such as preparedness for energy price surges or power outages, the ability to sell surplus electricity to increase revenue, and reducing carbon emissions.

The third measure proposes generating profitability by expanding interaction with the market. The report subdivides ways to generate revenue in the market depending on company characteristics. For instance, companies with energy storage devices can sell electricity to energy retailers through ‘grid stability’ contracts and generate profits by selling energy-related products such as carbon emission rights. Companies without energy-related technologies can collaborate with other companies capable of participating in the energy market to create demand and jointly enter the market.

The fourth measure is to electrify operations by replacing some company equipment and vehicles with electric models, thereby reducing dependence on fossil fuels and lowering carbon emissions. Electrification of operations offers benefits such as eligibility for eco-friendly incentives or subsidies. The more facilities are electrified, the more value can be created through self-generated power, making trading in the energy market easier.

Meanwhile, Samil PwC has expanded and reorganized its existing ESG (Environmental, Social, and Governance) platform organization into a Sustainability Platform that includes ESG disclosure, climate advisory, and energy transition. Steven Kang, leader of the Sustainability Platform, stated, “With the establishment of the three major global ESG disclosure standards and the domestic ESG disclosure standards expected to be finalized within the first half of the year, the institutional foundation for ESG is now fully in place,” adding, “Now, companies must go beyond merely responding to ESG regulations and make sustainability a driving force for corporate value creation.”

This content was produced with the assistance of AI translation services.