Companies often pay unnecessarily high prices for energy. What can be done to prevent this from happening?

The energy crisis of recent years has fundamentally changed the way companies think about energy. The sharp increase in electricity and gas prices has forced companies to monitor consumption in more detail, analyze their costs and look for solutions that will help them cope with market uncertainty. While a few years ago the price per megawatt-hour was the main factor in choosing a supplier, today companies are discovering that the commodity itself only makes up a part of the cost.

"It is good to monitor the price per megawatt-hour, but when a business looks at the entire invoice, it finds that the commodity only makes up a part of the final price. Distribution and regulatory fees also play a big role," explains Michal Vargončík, sales director of our subsidiary PPA POWER DS.

According to him, this is where some unnecessary costs arise, which can be avoided with the right settings. Companies often only deal with the final price of electricity, but are less interested in how their consumption actually works and what affects the final invoice.

The price of electricity is only part of the cost

"The focus on the price of electricity results from the situation that occurred during the energy crisis between 2020 and 2022. The sharp increase in prices had a very significant impact on production companies and their costs," says Michal Vargončík.

Today, however, it is no longer enough to look only at the price of a commodity. The price of energy can be increased by distribution fees, regulated items, reserved capacity or various penalties. Many companies are unaware that some of these costs arise unnecessarily, for example due to incorrectly set reserved capacity or unpredictable consumption patterns. These are factors that can be influenced.

Every business has a different customer profile

V of energy There are no two companies with exactly the same consumption. Each production works differently, has different technological processes, different intensity of operation and different time course of consumption.

The demand profile is one of the most important parameters when setting up energy solutions. "When pricing energy, it is not only the volume of consumption that is important, but also its course over time. The problem is particularly pronounced fluctuations or peaks in consumption, which can increase costs for both the company and the supplier."explains M. Vargončík.

Peak demand occurs when a company turns on a large number of technologies or production equipment at once. A typical example is morning production starts, when electricity consumption jumps sharply.

However, these short-term peaks have a significant impact on both reserved capacity and resulting charges. If a company exceeds the agreed consumption limit, the distribution company may impose penalties that are often significantly higher than the price of electricity itself.

"Reserved capacity must be set correctly because the distribution system must be ready to deliver full capacity to the company. If capacity is exceeded, penalties arise that can be many times higher than the price of the commodity," our expert warns.

You can't optimize without data.

A key tool in optimizing consumption is its measurement. High-quality data today allows businesses to identify problem areas and manage operations more efficiently.

"Measurement is key, I dare say it is the alpha and omega of managing a business itself," emphasizes M. Vargončík.

Modern online measurements not only show the company's total consumption, but can also monitor individual technologies, machines or operational sections separately. This makes it possible to precisely identify where energy losses occur or which devices create the largest peaks.

Detailed data obtained from such measurements allows for the distribution of consumption over time in order to minimize peak consumption, better plan production, and reduce costs.

"The more detailed measurements a company has, the better it can optimize consumption. At the same time, we are also better able to recommend a suitable solution to the customer."explains M. Vargončík.

The importance of online monitoring is growing, especially in a period when energy costs are becoming one of the key items in industrial production. Therefore, companies are starting to employ their own energy engineers or cooperate with external experts who are dedicated to optimizing consumption - for example, our subsidiary PPA POWER DS.

Modern technologies help save money

The rise in energy prices has naturally accelerated investments in new technologies. Companies are developing photovoltaic power plants, battery storage, systems for monitoring quarter-hour peaks, and compensation for reactive power consumption.

"Each solution must be tailored to the specific customer profile. What works for one business may not be suitable for another." explains M. Vargončík. For example, photovoltaics make the most sense where a company can immediately consume most of the electricity it produces.

Battery storage systems also play an important role today. They can help in particular in smoothing short-term demand fluctuations and optimizing reserved capacity. Battery systems also allow companies to work better with energy produced from renewable sources and reduce the risk of sudden demand peaks.

Compensation for reactive power consumption is also an important topic. This is energy that, although it burdens the distribution system, does not bring real performance to the company. If reactive power consumption is high, the company may pay additional fees unnecessarily.

"We also try to help customers with waste compensation and power factor adjustment so that they do not pay unnecessary penalties." adds M. Vargončík.

Companies need a partner, not just a supplier

The liberalization of the energy market has significantly changed the way companies purchase electricity and gas. While in the past, businesses were dependent on regional suppliers, today they can choose from several companies. However, this also means that choosing a supplier is much more complex.

"The cheapest solution is not always the best. You need to have a comprehensive view of a potential supplier and evaluate all the risks, "all pros and cons," points out M. Vargončík.

When choosing a partner, it is recommended to pay particular attention to the company's stability, references, financial background, and ability to provide comprehensive services such as consulting, consumption analysis, optimization proposals, and assistance with energy modernization.

"We do not try to supply the customer with as much energy as possible at any cost. We want it to be a win-win solution and for the company not to overpay," says the sales director of PPA POWER DS. According to him, it is the comprehensive approach that is becoming one of the biggest competitive advantages.

Big changes await the energy sector

Energy is a sector that is currently changing extremely rapidly. The electrification of industry, the growth of electromobility, the development of renewable sources and the decentralization of electricity production will significantly increase the demands on the distribution and transmission systems in the coming years.

"Electricity consumption will increase, and with it the need to complete the infrastructure, power stations and other production facilities. The renewal of the entire infrastructure will be necessary, and both the state and businesses should take this into account," concludes M. Vargončík.