Energy Procurement Tips for Savvy Businesses
UK businesses spend in the region of £24 billion on energy each year. The cost of business energy has risen significantly over the years. This has made it a point of focus for businesses of all sizes, with business owners becoming more engaged with their energy portfolios than ever before. Especially for small to medium-sized business owners – or the heads of big corporates looking to optimise their energy outputs – energy procurement and energy management are the latest buzzwords in strategy.
The cost of UK energy
Britain’s volatile energy price is due to a number of short- and long-term factors:
- Weather, seasonal, and geopolitical circumstances
- Market considerations
- The unique requirements of every business, budget, hedging capabilities, and strategy
Finding the cheapest energy contract
Shopping the market goes beyond sourcing the cheapest tariff. Business owners need to take the time to understand the different elements of their charges and contracts for a complete picture of their energy cost. This includes:
- Understanding the difference between fixed and flexible contracts
- Understanding the charge structure
- Being familiar with your out-of-contract rates and preparing around renewal time
Business owners need to take a three-tiered approach to their energy contract looking at:
- Market understanding
- Price – having conducted a full-market comparison
- Their distinct business requirements
Understanding your energy consumption
Understanding how, where, and when your business consumes energy can be a very revealing exercise for businesses. Often, a few tweaks to operations can yield impressive savings, but this data will also drive real changes to energy usage with cost and environmental benefits.
Harnessing the power of technology
Technology has streamlined things enormously in recent years. These days, easy-to-use software have taken on the hard work around energy procurement and management. Smarter Business’s Openview, for instance, offers simple, transparent costing; competitive tender negotiation and execution; and comprehensive management facilities and consumption information for informed procurement and strategy.
Should you work with an energy consultancy
By partnering with the right TPI, busy business owners can save time, money, and energy.
- Look for a company with a strong reputation in the industry for compliance and transparency, long-standing supplier relationships for added negotiating power, and an unerring dedication to customer service.
- The rising price of energy means consumers are more engaged than ever – and an informed marketplace is great for stimulating competitiveness in the marketplace. Working with a TPI enhances this. Your consultants should take the time to unravel the jargon and give you a clear understanding of the energy market in general and your portfolio in particular.
- Energy can be complex. To derive a real understanding of the market takes time, which has a corresponding cash value to your business. If you’re saving time and money, you are laying the groundwork for growth. An improved bottom line, increased time to strategise, and a business reputation for energy efficiency and environmental responsibility all play a role in your business’s potential growth.
- Work with a company who can fulfil your immediate needs and cater for your business in the long term through a full suite of services. If you are simply looking for the best tariff come renewal time, make sure the consultancy you work with can apply market factors, charges, and contracts to your business circumstances now and innovate to strategise around energy going into the future.
- Specialist energy consultants can mean a competitive advantage. Placing you in the best contract for your business is the first step. Applying innovations in the industry and their expertise on the market means your business has a partner to keep them ahead of the curve.