Energy IQ: How your company can strengthen its energy management strategy

energy management strategy

You are in the right place if strengthening your business' energy management strategy sounds like an overwhelming undertaking. Businesses, including yours, can improve financials, advance their sustainability efforts and protect their core business from outages with an effective energy management strategy.

The steps outlined below will provide a starting point and help you compile your thoughts in building an effective energy management strategy. Once you review these steps and are ready to take your energy strategy forward, you can simply get in touch with an expert from Cummins to partner with you

An effective energy management strategy integrates the current realities your business operates in, with its future aspirations and expectations

How to strengthen your energy management strategy"To build an effective energy management strategy it is equally important to know the needs of today as well as the flexibility to adapt to future changes. Understanding the current operating realities will help tailor the solution to meet one’s unique business needs. Furthermore, building in flexibility allows  to future-proof the investment from regulatory, technology and market changes that are inevitable in this energy transition,” said Satish Jayaram, General Manager of Distributed Generation Business at Cummins.

Understand your current operating realities

  • Energy Costs
    • The starting point is to understand the composition of your current energy expenses ranging from electricity and heating bills to transportation fuel costs. This will help you uncover opportunities to focus within your energy management strategy. For example, businesses with high heating expenses can explore combined heat and power applications within their strategies.
    • Your demand profile is another important consideration for electricity expenses. If your electricity demand is peaking when the prices are the highest, participating in a demand response program could be a consideration for your strategy.
    • If your business has equipment and technology that draws large amounts of power when they start (even for a very short period), your energy bills might go up significantly due to demand charges. In this case, your energy management strategy could feature an infrastructure where you can avoid these charges by having on-site generation or energy storage.
  • Sustainability Goals
    • The starting point is to outline your motivation to pursue sustainability within your business. If regulations are the sole reason, then you might have less to do, yet you might not be unlocking the complete value for your business. If sustainability is critical for your employee engagement, brand image or marketing message, then your energy management strategy would need to have a more comprehensive and ambitious position on sustainability.
    • Next, consider your business’ specific sustainability goals. Whether it’s the preservation of water, soil or clean air, environmental sustainability has many fronts. A mine site and a healthcare facility would have very different goals, and it is important to detail out the goals specific to your business to build the right energy management strategy.
  • Energy Disruptions
    • Start with understanding how critical energy is for the continuity of your operations. If an energy disruption is an inconvenience and your operations continue, then your energy management strategy could be lighter on building extra resiliency. In contrast, your energy management strategy would need to be heavier in building extra resiliency if your business faces significant risk in the case of an energy disruption.
    • Consider how the aging transmission and distribution infrastructure impacts your business. Extreme weather events are also putting an increased strain on this aging infrastructure, and in some cases force utilities to execute rolling blackouts. Having a diverse base of distributed energy resources in your energy management infrastructure could be a consideration if your business is facing this scenario.
    • Whether you are currently grid independent or grid-tied is a significant input to your energy management strategy. An off-grid or grid independent business, whether by choice or due to location, will rely on a different energy management strategy given the absence of access to a central grid.
  • Location-driven Aspects
    • Local emission regulations will help you understand the baseline expectations your energy management strategy needs to deliver to comply with local regulatory needs.
    • Local level of electricity market regulations will introduce constraints or options to your energy management strategy. If your business is in a fully de-regulated power market, you would have more options to consider while building your strategy. In contrast, if your business is in a regulated power market, some of the options within your strategy will be out of table.
    • The likelihood of power outages could change between your own locations. Severe weather is the number one reason for power outages, and in most cases, you can evaluate the risk your business is facing based on historical outages.
    • The local cost of fuel and energy is a key driver of making choices between different electricity generating assets. A clear understanding of the local cost of renewable energy will help you outline which fuels and renewable options could be displaced in your energy infrastructure.

Become future ready

  • Top Drivers of resource management initiativesSet the Aim
    • Start with what will be the goal of your energy management strategy. If your primary goal is around financial gains, your strategy will look different than if you focus on sustainability related goals. While your goals don’t need to be binary between sustainability, financial gains and resiliency, having clarity in relative importance will help you make the right choices in building your strategy.
  • Improve Energy Efficiency
    • Efficiency can be defined as doing more with less. This could mean greater business outcomes with the same energy use, or the same business outcomes with less energy use. Any energy management strategy must have an efficiency aspect. This could include simpler improvements such as the use of LED bulbs. Businesses seeking more significant efficiency gains could consider cogeneration solutions, instead of sourcing electricity and heat separately.
    • Optimizing load management is the second aspect of efficiency. Load management processes have been made more effective with the progress in advanced control systems. If your business features large electrical loads and a varying demand profile throughout the day, then the use of these technologies could help you distribute your load more evenly and reduce your costs and environmental footprint.
  • Build Flexibility
    • Future rate structure changes also need to be considered in building your energy management strategy. Factors ranging from regulations and fuel costs to new technologies impact electricity rates, and it is very difficult to speculate the timing and scale of these rate changes. Meanwhile, for energy intensive businesses, commodity hedging could be a component of their energy strategy to address this risk associated with rate changes.
    • Increasing the share of wind and solar continually displace carbon heavy fuels and reduce our energy infrastructure’s environmental footprint. Meanwhile, the more energy we source through wind and solar, the higher variability we will experience with their outputs. An effective energy management strategy can address this by building flexibility through complementary energy storage and electricity generation assets.

You can build an effective energy management strategy by considering your current operating realities and integrating them with your business’ future objectives. The steps above aim to provide you with a comprehensive frame of thinking in your journey. There is not a one size fits all when it comes to energy management strategies, however, you can contact an expert from Cummins to partner with you in building a custom energy management strategy.

Sign up below for Energy IQ to periodically receive relevant insights and trends about energy management. To learn more about distributed generation solutions Cummins offers, visit our webpage. 

Think your friends and colleagues would like this content? Share on LinkedIn and Facebook.

Raise Your Energy IQ

Grow professionally with energy trends and insights delivered to your inbox. Read about energy technologies and trends on our Energy IQ Hub.

Aytek Yuksel - Cummins Inc

Aytek Yuksel

Aytek Yuksel is the Content Marketing Leader for Cummins Inc., with a focus on Power Systems markets. Aytek joined the Company in 2008. Since then, he has worked in several marketing roles and now brings you the learnings from our key markets ranging from industrial to residential markets. Aytek lives in Minneapolis, Minnesota with his wife and two kids.

Energy IQ: From decarbonization to on-site generation, three energy trends for data centers

In 2017, a group of researchers estimated global data centers could use 25% of the world’s electricity by 2025 1. This is more electricity than any country in the world, including the U.S. You would be happy to hear this prediction is not materializing so far and you might be wondering, ‘how much energy and electricity data centers consume?’

The world’s data centers consume around 200 Terawatt-hours (TWh) of energy annually, almost all of it is electricity 2; this is about 1% of the world’s electricity consumption. While this is much lower than the prediction above, it still makes data centers a considerable consumer of energy. However, the data center industry has made significant progress to improve their energy efficiency. This has resulted in data center energy consumption to plateau in recent years. What is even more exciting is the industry’s ability to achieve plateauing energy consumption while successfully meeting its customers increased need for services. 

Global Data Center Energy Usage Plateaus
Global data centers energy usage plateaus

Now that the basics around data centers’ energy usage are covered, let’s move into the three data center energy trends you would likely hear more frequently in the years ahead.

No. 1: Increasing environmental consciousness is driving a focus on decarbonization

From airlines to data centers, lowering carbon emissions and decarbonization are increasingly getting traction across most industries. In the process of using 200 TWh of electricity, data centers create a significant carbon footprint. This is because they commonly rely on the world’s current power generation mix, which is still heavily fossil fuel based.

Two of the most popular decarbonization paths within the data center industry are the direct use of renewable energy sources and the use of renewable energy credits (RECs).

  • Direct use of renewable energy sources: This is where a data center is fully or partially powered by renewable energy e.g. geo-thermal, hydro, solar, and wind. While this is the more environmentally beneficial approach, it is also more challenging due to the intermittent nature of renewables. Data center operators rely either on existing electricity markets or in some cases, energy storage options to manage this challenge.

Direct use of renewable energy sources

  • Use of renewable energy credits (RECs): In this scenario, the data center operators purchase renewable energy and associated RECs. In cases where the renewable energy is produced in a location far away from the data center, the operator sells the renewable energy back to the grid and uses RECs to offset its carbon footprint. This is a common approach across the data center industry, and partially what makes Google the largest corporate buyer of renewable energy in the world 3. Here is how this approach is beneficial: it gives the renewable energy provider the customer commitment to invest in new projects, even if the renewable energy is not necessarily used by the data center. In other words, this approach delivers an increasing amount of renewable energy to the grid for all of us to use. Meanwhile, critics highlight that this approach doesn’t necessarily reduce the data center’s carbon contribution.

These two approaches are expected to co-exist in the data center industry’s path towards decarbonization.

No. 2: An increase in on-site energy generation

Data centers commonly rely on the grid as the primary source of electricity. While relying on the grid is convenient, the continued expansion of data centers could put extra stress on existing grid infrastructure causing grid instability. In some regions, data center growth and energy demands could outpace grid infrastructure capability and investment. To address these challenges, some data center operators may deploy on-site power generation.

Photovoltaic (PV) arrays, natural gas generator sets, and fuel cells are common sources of on-site generated power. These sources are also known as distributed energy resources (DER) and may operate connected to the utility or isolated from the utility (known as island operation) as a microgrid. Stationary energy storage may also be incorporated into a microgrid enhancing the ability to operate isolated from the utility.

On-site power generation allows a data center operator to use power from cleaner sources when available, while supplementing energy from other sources when the cleanest source is not sufficient. This feature of on-site generation supports advancement towards sustainability goals while maintaining reliable power service to the data center.

No. 3: Rising focus to achieve higher levels of energy efficiency

Data centers offer vast opportunities for energy efficiency, and the industry has taken full advantage in recent years. Let’s cover two aspects of energy efficiency in a data center.

  • IT infrastructure: Historically, data centers improved energy efficiency of IT infrastructure through higher utilization of individual IT equipment and server virtualization. Going forward, converged infrastructure (CI) and hyper-converged infrastructure (HCI) are expected to lead energy efficiency gains in data centers. Simply put, CI features building blocks made up of storage and compute functionalities physically combined in a turnkey product. Meanwhile, HCI relies on a software to combine compute, storage and networking functionalities. Both technologies, in different ways, deliver a more scalable architecture helping with energy efficiency. Within a data center, to deliver the same computing output, you can afford to have fewer servers, storage and network equipment if you are using one of these technologies.
  • Non-IT infrastructure: Power usage effectiveness (PUE), the ratio of total energy used by the data center to the energy used by computing equipment, is a common indicator of a data center’s energy efficiency. The industry average PUE has improved from 2.5 in 2007 to 1.67 in 2019 4, a clear indicator of shrinking contribution of non-IT infrastructure, heating, cooling, lighting and others, in a data center’s energy consumption. Going forward, advancements in cooling systems will take center stage in energy efficiency gains within non-IT infrastructure. Natural cooling, where cool ambient air or chilled water from nearby resources are used to cool the facility, will impact the geographical locations of data centers. Additionally, an increased prominence of liquid cooling technologies will impact data center cooling system designs. Meanwhile, on the IT infrastructure, the expanding need for IT equipment to operate at higher ambient temperatures will reduce the need for cooling per computing capacity.

It is expected facility and energy professionals leading comprehensive energy efficiency plans covering IT and non-IT infrastructure will stay ahead of their peers in energy efficiency gains.

Sign up below for Energy IQ to receive energy focused insights periodically. To learn more about the data center power solutions Cummins Inc. offers, visit our webpage.

Think your friends and colleagues would like this content? Share on LinkedIn and Facebook.


1 Lima, J. M. (December 12, 2017). Data Centres Of The World Will Consume 1/5 Of Earth’s Power By 2025. Data – Economy. Retrieved from

2 Global data centre energy demand by data centre type. (January 7, 2020). International Energy Agency. Retrieved from

3 Pichai, S. (September 19, 2019). Our biggest renewable energy purchase ever. Google. Retrieved from

4 Lawrence, A. (May 2019). Is PUE actually going UP?. Uptime Institute. Retrieved from

Raise Your Energy IQ

Grow professionally with energy trends and insights delivered to your inbox. Read about energy technologies and trends on our Energy IQ Hub.

Aytek Yuksel - Cummins Inc

Aytek Yuksel

Aytek Yuksel is the Content Marketing Leader for Cummins Inc., with a focus on Power Systems markets. Aytek joined the Company in 2008. Since then, he has worked in several marketing roles and now brings you the learnings from our key markets ranging from industrial to residential markets. Aytek lives in Minneapolis, Minnesota with his wife and two kids.

Energy IQ: Hybrid clouds to edge computing, trends that will shape the data centers industry in this decade

Cummins - Data Center Trends

We take a look at five trends that will influence the future of the data center industry in our latest Energy IQ article. 

If you look back to the last decade and reflect on a few trends that have shaped the data center industry, it is likely you might think about the increase in hyperscale data centers and the rise of cloud. Looking into the decade ahead, the data center industry is still on track to continue its growth pattern. In fact, cloud computing market is estimated to grow by 18% a year within the first three years of the decade 1. Meanwhile the trends that will shape the industry through this growth will be different than the previous decade.

Trends shared in this article are aimed to keep your perspective of the future of data centers fresh as you continue to shape the data center industry. Let’s look at these five trends that will influence the data center industry this decade..

No. 1: Hybrid clouds to increasingly become the top choice for most enterprises

The rise of cloud started in the 2000s and rapidly took off within the world of data centers the following decade. Meanwhile, this decade will be shaped with the rise of hybrid cloud. 

Private and public clouds offer different benefits to the users. Users of private clouds enjoy higher levels of security and customization to fulfill their regulatory needs and unique circumstances. On the other hand, users of public clouds enjoy relatively lower costs and on-demand scalability. Meanwhile, hybrid clouds bring a combination of these benefits with manageable shortcomings. 

Cloud strategies and hybrid clouds for enterprises
Hybrid clouds are increasingly becoming the top choice for enterprises. 

A hybrid cloud is when a company combines the use of a private cloud for mission-critical workloads and a public cloud for less sensitive workloads. Companies using hybrid clouds can still have higher security for mission-critical workloads and leverage lower cost public clouds for less sensitive workloads. They key shortcoming of a hybrid cloud is the compatibility between the public and private clouds, however, this could be effectively managed. 

These benefits make the hybrid cloud the top cloud strategy among enterprises. In fact, 58% of enterprises are pursuing it, in comparison to 51% the year before. The hybrid cloud is expected to continue its rise through this decade.

No. 2: Growth in edge computing, fueled by IoT and enabled by 5G, will complement, not replace, the cloud 

Increased use of Internet of Things (IoT) devices is one of the key drivers behind the expanding need for edge computing. Meanwhile 5G comes to play as one of the technologies that enable edge computing. 

Businesses from healthcare to manufacturing are increasingly using IoT devices, and expect very low latency in their operations. In these cases, it is not acceptable to produce the data, send it thousands of miles away to be processed and receive back the processed data. As 5G adoption speeds up, it will exponentially increase the amount of data generated by IoT devices, thus worsening the latency issues. Interestingly, this is not an issue restricted to businesses, as our homes feature more IoT devices, and more of us are driving autonomous cars, each of us will generate more data and expect it to be processed with low latency. Imagine having a smart bulb and having to wait 5 seconds to turn it on after using the smart light switch or the app on your smart phone.

Edge computing could address this need for improved latency by bringing the computation resources much closer to end users and their IoT devices. This growth in edge computing won’t necessarily replace the cloud, instead the combination of the edge and cloud will result in a more capable digital and physical infrastructure. 

No. 3: Talent shortage will arise in new geographies and existing talent will experience a shift in skills

The first International Data Center Day, powered by 7*24 Exchange International, intentionally aimed to inspire the next generation of talent as the talent gap for data centers continues to widen. Beyond  the sheer growth of the industry, the two trends covered above are driving this expanding talent gap. 

As the need for edge computing increases, new data centers are being built in new geographies to get closer to the end users and their IoT devices, while improving the latency. This creates the need for data center talent in cities and towns that didn’t previously have any significant data center footprint. However, when it comes to the rise of hybrid clouds, the situation is a little different. Operating data centers supporting hybrid clouds require a combination of both software and hardware related skills, as hybrid clouds bring both together. 

On the other hand, the rise of artificial intelligence (AI) will likely help data center operators build smarter data centers where certain tasks are managed by AI, easing the talent shortage to some extent.

Talent shortage, whether it is talent in new geographies or new skills existing talent needs, will shape the coming decade. This will bring opportunities for cloud providers and their enterprise customers to collaborate more closely in cross training talent to expand their skills.

No. 4: Energy efficiency and environmental impact will get increasing attention

While the power usage effectiveness (PUE) of data centers continue to improve from 2.5 in 2007 to 1.67 in 2019 3, signaling increasing efficiency, data centers are still consuming a large amount of energy. In fact, it is estimated data centers collectively consume more energy than the world’s fifth largest economy, the United Kingdom 4
Meanwhile, keep in mind the  world’s energy and electricity are still primarily produced by fossil fuels and 38% of the electricity is from coal, one of the worst offenders in carbon emissions. Between data centers’ high energy consumption and our dependence on fossil fuels, you might not be surprised to hear that data centers generate about 2% of the world’s carbon emissions. 

World's electricity product by source - Cummins
The world's electricity continues to be produced primarily by fossil fuels. 

In addition to carbon emissions, water usage is forecast to get more attention as a part of the broader sustainability umbrella. On the other hand, there is some good news for data centers too. A range of developments ranging from converged technologies to cooling architecture changes are forecast to enable data centers to become more energy efficient. “Energy trends in data centers” brings more details on the energy future of data centers, including a look at carbon offset credits.

No. 5: Security was important and will be important, but for evolving reasons

We have debated whether the list should start with security or end with it. Security was always important for data centers and would be on this list whether we focus on 2000s, 2010s or 2020s.

If you go back a decade ago, regulatory needs kept security top of mind for data center operators. More recently, financial consequences of security breaches became a key driver, and the regulatory aspect became more of a table stake. 

In the decade ahead, two aspects of security will take the center stage. First is the life-threatening aspect of security breaches. Think of the consequences of security breaches in data centers that support the operation of autonomous cars or healthcare IoT applications. Second is the security challenges introduced by edge data centers. Edge data centers will be smaller in size and likely won’t have local personnel, and the industry will need to find solutions to address security in these unmanned sites.

While there seems to be no end to the growth in the data center industry, the profile of growth will change during this decade. Whether it is increasing the adoption of hybrid clouds or the rise of edge computing, it will be an exciting decade for all stakeholders of the industry. Insights shared in this article are aimed to keep your perspective of the future fresh and current as you continue to shape the data center industry.

Sign up below for Energy IQ to receive energy focused insights in markets ranging from data centers and healthcare facilities to schools and manufacturing facilities, and everything  beyond. To learn more about data center power solutions Cummins offers, visit our webpage.

Think your friends and colleagues would like this content? Share on LinkedIn and Facebook.

1 Cloud Computing Market by Service, Deployment Model, Organization Size, Workload, Vertical And Region - Global Forecast to 2023. (February 2019). ReportLinker. Retrieved from
2 Global Cloud Index Projects Cloud Traffic to Represent 95 Percent of Total Data Center Traffic by 2021. (February 2018). Cisco. Retrieved from
3 Lawrence, A. Is PUE actually going UP?. (May 2019). Uptime Institute. Retrieved from
4 Danilak, R. Why Energy Is A Big And Rapidly Growing Problem For Data Centers. (December 2017). Forbes. Retrieved from

Raise Your Energy IQ

Grow professionally with energy trends and insights delivered to your inbox. Read about energy technologies and trends on our Energy IQ Hub.

Aytek Yuksel - Cummins Inc

Aytek Yuksel

Aytek Yuksel is the Content Marketing Leader for Cummins Inc., with a focus on Power Systems markets. Aytek joined the Company in 2008. Since then, he has worked in several marketing roles and now brings you the learnings from our key markets ranging from industrial to residential markets. Aytek lives in Minneapolis, Minnesota with his wife and two kids.

Machine of the Month: Tor Tugboats

Cummins Machine of the Month - March 2020

For our Machine of the Month for March 2020, look no further than this Cummins QSK95-powered tug boat designed by Robert Allan LTD with the ship-building expertise of the Tor Group. 

Large cargo ships traverse the oceans of the world, carrying raw materials and finished goods between ports. Built for speed on the open ocean, these massive ships can take up to five miles to stop. Once these mammoth vessels arrive in port, they need help to maneuver in tight quarters, which is where ship-docking tugs go to work.

2018 saw maritime trade at an all-time high, with volumes reaching 11 billion tons. This meant that more cargo ships were calling on ports around the world, including Takoradi in Ghana. This increase lead the Ghana Ports and Harbour Authority to determine they needed a new fleet of tugboats to safely maneuver ships in and out of their new and expanded ports.

Cummins - Machine of the Month - Ghana Ports and Harbour Authority

To fulfill this need for new tugboats, they called on the world-class design of Robert Allan LTD, the ship-building expertise of the Tor Group, and the reliable power of Cummins.This resulted in the first application of the Cummins QSK95 engine in tugs. 

Each of the new tugs is 32.8 by 12.9-meters with a depth of 5.37 meters. Two Cummins QSK95 diesel marine engines provide the propulsion power, each delivering 3,600 BHP (2,685 kW) at 1,700 RPM for a total of 7,200 BHP per vessel. The Cummins QSK95 engines each power a Rolls Royce US2555 P30 FP azimuth thruster, which provide not only exceptional maneuverability and speeds up to 13 knots but also a minimum of 80-ton bollard pull. 

According to Commander Stephen Abane Ayeo of GPHA: 

“We know Cummins engines. They are durable, economical and strong, and provide good maintenance support. We’ve been a partner for over 30 years.”

Besides propulsion, a pair of Cummins QSB7-powered generators producing 170 Kva kW 136 kWe at 1500 RPM 50 Hz provide electrical power to the tugs and a QSK38 1595 BHP (1190 kW) variable speed at 1800 RPM powers a dedicated fire pump engine. 

Cummins Machine of the Month - Cummins QSK95 Powered Tug Boat

The tugs underwent their sea trials and bollard pull tests in Turkey and arrived in Ghana at the end of January. They are classed for unrestricted navigation by Bureau Veritas with the FiFi1 fire-fighting notation. Tankage for fuel is 180.5 cubic meters, for water 35.8 m3 and for lube oil 2.2 m3. Other applications of the Cummins marine QSK95 engines include crew boats like SEACOR Panther and passenger ferries like the Kilimanjaro VII.

Cummins Office Building

Cummins Inc.

Cummins is a global power leader that designs, manufactures, sells and services diesel and alternative fuel engines from 2.8 to 95 liters, diesel and alternative-fueled electrical generator sets from 2.5 to 3,500 kW, as well as related components and technology. Cummins serves its customers through its network of 600 company-owned and independent distributor facilities and more than 7,200 dealer locations in over 190 countries and territories.

Cummins helps expand a major water treatment plant

An expansion at the Al Ansab wastewater treatment site near the capital Muscat, Oman doubles the capacity, making it the largest water treatment plant in Muscat, and one of the largest facilities in the world to use the flat-sheet-membrane bioreactor process, which produces high-quality reclaimed water and minimizes environmental footprint.

With Cummins global capabilities and footprint, and with Cummins distributor Universal Engineering Services' proven track record for turnkey projects, a 14.5 MVA emergency standby power solution based around five new generator sets completes the new standby system – including the first in the country to be powered by the Cummins QSK95 Series engine.

Read more on the Haya Water case study at 

Adam Sidders Marketing Communications Leader Power Systems

Adam Sidders

Adam Sidders is the Marketing Communications Leader for the Power Systems Business Unit of Cummins Inc. Prior to joining Cummins in 2012 Adam worked in Financial Services for Europe’s largest independently owned insurer as their Marketing and Communications Manager.

Redirecting to

The information you are looking for is on

We are launching that site for you now.

Thank you.