How businesses look at energy has changed drastically in the last decade. Modern business owners are far more engaged when it comes to the effect of energy on their bottom lines and this comes down to a single reason: cost. With wholesale energy prices on the rise, energy procurement has joined the realms of business strategy, says leading TPI, Smarter Business. The following are some insights into the wholesale market and energy procurement, as well as some thinking points to strategise around procurement in your business.
What drives the price? The volatile energy price we experience is the result of certain short- and long-term drivers including weather and seasonal factors, the geopolitical landscape, market considerations, as well as your business needs, budget, hedging capabilities, and overall strategy.
Is it all black and white in your contract? Fixed, flexible, or both? Where do you look for hidden charges? What is the standing charge? How are your charges structured? Finding the cheapest tariff is only one component of your energy contract. Take the time to understand the market, your business’s bespoke energy needs, and conduct a full-market comparison for the best deal. Also be aware of your out-of-contract rates and make changes around the time of renewal where necessary.
Understand behaviour. Looking at your current consumption is the first step in implementing your energy strategy. This offers up invaluable information on how to save energy and costs around your consumption.
It won’t be hard with the right software. Technology takes the legwork out of many fundamental tasks within your commercial energy portfolio. With procurement and management capabilities, software such as Smarter Business’s Openview offers complete transparency around costing, simplifies tender negotiation and execution (whilst enhancing supplier competitiveness through transparent bidding), offers holistic management capabilities around meters and consumption, and empowers the modern business owner to make the most informed choices around their energy. Looking at current and future energy costs, this assists in saving money on your energy procurement.
Outsource for success. Working with energy specialists will always help you implement the strongest strategy. Partner with a leading TPI who takes the time to understand your unique business needs, makes suitable recommendations, and works with you over the long-term to increase your bottom line through clever energy management. Energy consultants should be able to give you meaningful insights into every element of your energy portfolio, providing real value through service and data analysis. This saves business owners valuable time, but also often exceeds what can be done internally.