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  • It’s energy budget season

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Energy spend typically is the second or third line item in your budget. Whether you’re dealing with 4% of operational costs or 40%, energy is a significant portion of your expenditures. For many companies (38%), however, actual results have fallen within +/- 6–10% of forecast, a far greater variance.1 The result is a financial tornado for your organisation.

Why are budgets so off the mark? Several cost variables have a significant impact on energy pricing. According to Schneider Electric Energy & Sustainability Services experts, for example, about 25% of energy budget variance is due to utility rate fluctuations. And 10% of companies don’t think about their changing number of sites, or organisational footprint. But that’s not all. . . .

5 critical cost variables

There are five typical reasons why energy pricing varies as much as the weather:

  1. 1. Evolving organisational footprints
  2. 2. Extreme weather’s effect on baseline use
  3. 3. Global carbon programmes/taxes
  4. 4. Legislation/utility rate changes
  5. 5. The impact of efficiency projects worldwide

One or all of the factors can affect your budget forecast. Think about it. If you’re asked to reduce your budget or consumption by 10%, will you have a plan? What if your competitors are better at budgeting — do they have a competitive edge over you? Which efficiency projects might affect your budget? After all, energy efficiency projects offer 15–35% potential improvement in efforts to save energy.2

Leverage regional experts

Are you factoring all the required variables into your budgeting decisions? Regional experts are an invaluable part of accurate forecasting. If you’re a global enterprise with sites throughout the world, this focused expertise is imperative.

Schneider Electric energy specialists provide such insights. In fact, we have a budget forecast accuracy rate of about 97%.3 We can:
  • anticipate unit costs based on our market expertise
  • help you understand regional differences by modelling more than 450 utility rates
  • take advantage of market opportunities to reduce your costs
  • develop an energy efficiency strategy, prioritise efficiency initiatives, and measure results
  • evaluate sustainability initiatives and programmes, including renewable energy sources and credits
  • understand the impact of weather extremes globally
  • forecast an accurate budget
Our budget experts have developed more than 250,000 budgets, and they track comparisons of actuals vs. budget in our award-winning software, Resource Advisor, so you can always see your performance.
Approach budget season with confidence. Contact our Energy & Sustainability Services experts today to learn how we can make this your most accurate budget ever.
Regional markets are complex. Let our experts help you navigate them
A snapshot of recent market fluctuations4
In the United States
  • Tax exemptions, state, or local tax rates are equal to 1% of typical energy budgets.
  • Fluctuating capacity charges with conversion from hourly to monthly (CA) are potentially affected up to 15%.
In the United Kingdom
  • Prices fell due to high storage levels, generally mild winter, and healthier flows of LNG.
  • Prices spiked over one month as the Dutch capped production.
In Australia
  • The cost of renewable energy increased by 48% (January – March 2015).
  • There was a $30(AUD) annual fluctuation in 2014 gas spot price.
  1. 1. PricewaterhouseCoopers, ‘Financial planning: Realizing the value of budgeting and forecasting’, May 2011. Available at, p. 20.
  2. 2. Global Industrial Energy Efficiency Benchmarking, UN
  3. 3.Schneider Electric Energy & Sustainability Services analysis
  4. 4. Schneider Electric Energy & Sustainability Services analysis

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