It would be strange if a company that’s all about managing energy efficiency was inefficient itself. That’s why EnerNOC makes sure its supply chain is in total sync with the overall operation. The company helps commercial, institutional and industrial organizations use energy more intelligently, pay less for it and generate cash flow that benefits the bottom line through its complete suite of technology-enabled energy management solutions. These include EfficiencySMART, SupplySMART and its flagship product, DemandSMART.
EnerNOC works with businesses to provide energy curtailment services to utility companies around the country during their peak demand times. When electricity demand peaks, utilities fire up peaking power plants. But on average, those generators are used only once or twice a year, according to Ron Kruse, senior manager of hardware operations. EnerNOC was born from the idea that instead of hosting expensive equipment that sits idly most of the time, utility companies could manage peak demand by paying large end-user groups to not consume. The unsued energy becomes part of EnerNOC’s virtual power plant, and the grid calls on it when it needs greater capacity.
“We go out and find large facilities that can curtail their energy usage and we install metering equipment at the end-user facilities that measures their usage and pipes the data back to our data center, and we see what their facilities are doing in real-time,” Kruse says.
With a decade of experience under its belt, EnerNOC has developed management systems that provide a flexible structure that allows it to grow. The company has learned the value of collaboration and working strategically with companies that house a particular expertise.
“We prefer to outsource some specialized functions because we are growing and changing so quickly,” Kruse says. “We’re not exactly sure what our geographic footprint or product mix will look like in five or ten years, so we don’t want to make large investments in fixed infrastructure amidst this uncertainty. By leveraging best-in-class partners, we can grow quickly, maintain high quality, and we can also change quickly if we launch a new product or begin to grow in a new region.”
The majority of EnerNOC’s onsite installations consists of a modem and metering system that remain company owned. EnerNOC uses contract manufacturers for its custom hardware, and has a hybrid stocking policy, with a mix of central stock, field stock, vendor managed inventory. The company has a network of 80 contractor houses worldwide who handle installations. Much of the product is stored by a third-party warehouse and delivered by ground. In some cases, however, EnerNOC is able to eliminate some of these steps for quicker delivery.
“We have a good idea of our yearly volume so we are able to do drop-shipments directly from vendors rather than handling that inventory ourselves,” Kruse explains. “We give them our forecast and do drop shipments from their location.”
Two technology collaborations have played a key role in this process. One is with Veris Industries, which holds extensive inventory with a same-day shipping capability. They have also co-branded a metering device that is pre-configured to EnerNOC’s specification.
Another key collaboration is with Feeney Wireless, which supplies modems, and Verizon Wireless, which supplies the wireless connection and M2M management center. Feeney can access EnerNOC’s forecasting and plan its manufacturing accordingly. Feeney also works with EnerNOC’s preferred wireless M2M company Verizon, orders the wireless connection directly, and provisions the modems on behalf of EnerNOC.
“We share our forecast with both vendors so they can be ready for our volume, which is highly seasonal,” Kruse says. “With Feeney, we need to be especially tight because some items have long lead times and we need to make sure they can meet our demand. The relationship also involves getting Feeney access to order the phone lines. Without this deep collaboration, we would have to order the modem, then get the serial number and order the phone lines and marry the phone line to the modem. We’ve rolled that process back one step.”
Through these relationships, EnerNOC is free to focus on its core strengths. Kruse is involved in ensuring the manufacturability of EnerNOC’s hardware and the company has invested more than $160 million in its technology platform that is now deployed at more than 14,000 commercial, institutional and industrial facilities globally. Last year, its DemandSMART system received the Smart Grid Product of the Year award from Smart-Grid.TMCnet.com.
“As a result of continued innovation, demand response has become a dynamic resource that is increasingly important to the efficient and reliable operation of electric power grids around the world,” says Gregg Dixon, senior vice president of marketing and sales. “Today, DemandSMART enables sub-second control of energy consumption and production in diverse operating environments, along with robust measurement and verification features, on a fully internationalized platform. We’re honored to receive this recognition for the outstanding technology developed by our world-class engineers.”