LATEST MARKET UPDATE: Gas and power markets stable this week following late-November bullishness in the wake of vaccine news. However, oil price continues to increase, suggesting more increases to come.
Navigating energy procurement can be challenging, especially when businesses are faced with a volatile energy market where prices fluctuate regularly. Effective energy procurement can have a major impact on a business, especially during a global pandemic. Developing a robust energy procurement strategy is a must for any organisation operating in the UK.
The range of tariffs and contracts available for businesses can be daunting, so here are our 5 tips for creating your energy procurement strategy:
Before you begin purchasing energy it's vital to set the goals of your procurement strategy. Every business is unique, whether that is due to their tolerance to risk or the budget they have available, so it is important to tailor the strategy to fit the requirements of your organisation. These targets can then be referred back to throughout the procurement stages.
In most businesses loyalty is rewarded by suppliers, unfortunately, energy suppliers are typically not one of these businesses. As a result, comparing the market is always the best approach when it comes to energy procurement. To avoid increased prices when re-signing with a current supplier, it is advisable to check what other suppliers are offering before putting pen to paper.
Whilst fixed energy contracts can offer many benefits for businesses, such as the offer of budget security as prices fluctuate, ease of management, and a fixed price for a fixed contract period, many companies are now turning to a more flexible approach.
A flexible price contract offers your business a method of procuring energy that gives you the ability to keep on top of market movements and alleviates the risk of fixing the price at a high point in the market. Wholesale energy can be purchased in smaller amounts, throughout the length of the contract, allowing your business to buy energy at the best times and take advantage of favourable market prices.
By analysing the energy your business consumes you can get a real insight into the type of energy contract you require, allowing you to stay in control of your procurement. Energy management software can help you to monitor consumption patterns and identify potential areas for savings.
Energy procurement can be a complex process so seeking industry advice is advisable. At Utility Team, we offer a comprehensive service that helps you to take full control of your energy purchasing strategy. With extensive knowledge of the energy market, we can tailor your procurement strategy to the needs of your business.
By using our broad knowledge of the energy market, we can ensure price competitiveness for the long-term by planning and implementing energy risk strategies tailored to meet your business’ requirements.