In industrialized corners of the world, energy consumption is experiencing an upcycle. It’s predicted that by 2035, global usage will increase by approximately 50 percent – a significant disparity from the 28 percent uptick that occurred in the 10-year period between 2000 and 2010. As a result, manufacturers are feeling the push to foster an “energy-management” culture, or a standardized process to reduce the consumption of water, air, gas, electric and even steam.
In response, Rockwell Automation (News - Alert), an industrial automation control and information systems provider, has released an action guide that details a progressive process for achieving improvements through current and new initiatives. The four-stage process included in its “Industrial GreenPrint” guide sheds light on the types of tools that may help industrial companies examine the state of worldwide energy usage, and what steps they can take to curb it.
In order to look at consumption within a facility and effectively allocate energy costs, the guide suggests leveraging spreadsheet-based models to monitor and assess a facility’s energy demand and the environmental impact over a specific period of time. Due to spreadsheets’ ability to intuitively track, organize and consolidate large amounts of complex data sets – leading to increased user productivity – they have become a pervasive tool across all industries and verticals, including the utility market.
In addition to using spreadsheets for consumption review, utilities also call on spreadsheets for decision-making in energy trading, an industry characterized by emerging markets, high trading volumes and increasingly severe risk and regulatory reporting standards. There are, however, expectations in energy trading that because of fluctuating markets, agility and real-time information require quick analysis via spreadsheets. “Decisions made by those in energy trading need to be based on accurate results because the results directly affect top-line revenue,” Diane Robinette, president of Incisive, a company specializing in spreadsheet error detection solutions, told TMCnet.
While some may question the reliability and scalability of spreadsheets in handling these increasing trading volumes and requirements, they still are a big part of the energy trading landscape. According to EnergyDigital.com, the familiarity and trust in spreadsheets instilled in traders when performing calculations and models has made them hesitant to transition to alternative software, which they perceive as “complex, inflexible and unintuitive.”
Of course, with any business tool, there is always room for error, and, contrary to popular belief, spreadsheet disasters are not limited to banks. This was demonstrated by Canadian energy company TransAlta Corp., in 2003 when it suffered a $24 million earnings blow following a cut-and-paste error that resulted in mismatched bids for more U.S. energy transmission hedging contracts. Meanwhile, in 2002, a fraudulent manipulation of spreadsheets led to one trader losing an astounding $691 million for his employer, Allfirst Bank.
For Incisive, which focuses on helping large-scale organizations expose errors and compliance risks buried in spreadsheets, a large energy trading company would be a perfect candidate for the company’s services. A typical energy trader may need to make fast decisions based on a quick analysis of spreadsheet information which can be risky for the organization if the information isn’t accurate. Using a solution like Xcellerator, Incisive’s leading spreadsheet analysis program, on what-if analyses allows traders to examine and fix errors, thereby increasing the accuracy of the data their decisions are based on.
The success of Incisive spreadsheet management solutions, like Xcellerator, has certainly resonated with the company’s customers.
“The response from all of our customers is extremely positive. They value that our solutions offer an intuitive and easy to use interface, and the fact that we don't require them to change the way they work. The best part is that they can work within the spreadsheet but our solutions don't alter it so the integrity of the spreadsheet remains intact,” Robinette said.
Edited by Rich Steeves