Benefiting from Having a Bespoke Energy Procurement Strategy

How do you get the best energy deal?

In our recent blogs we have talked about the many changes in Government legislation and how many companies need the holistic advice we provide to meet these legislative changes positively.

In this blog we will look at energy procurement and providing a bespoke Energy Procurement strategy for our clients. This strategy is designed to meet your business needs & circumstances through our expertise of the UK energy market.

At the core of this strategy is selecting the right energy contract options from the range available to us nowadays.

The breakdown of your energy bill

Understanding your bill is our start to creating our energy strategy. The cost of the energy bill is divided between Non-Commodity costs (network & distribution charges, taxes, etc.) and Commodity costs (the energy itself) – with energy becoming an ever-smaller fraction of what makes up the overall kilowatt hour cost – falling from 50% a few years ago to, in some cases, as little as 30% today.

“Now we can manage all of your energy costs”

Until recently Non-Commodity costs were relatively fixed, and we could only actively manage the Commodity costs. But now we can manage both sides of your energy costs.

What are your Options?

Unlike domestic, your options can be divided between Fixed contracts and variable Pass Through Costs based contracts – known as “flex” or flexible purchasing. Fixed price Non-Commodity contracts allow you to fix the price you pay and therefore offers certainty. Flex contracts, as the name suggests, offers you flexibility, but without the certainty of actual costs over the contract period.

By entering a “flex” contract, you will pay the non-commodity costs at “pass through” rates – which effectively means wholesale cost, with an agreed amount paid to the supplier for billing and facilitation. However, you will need to manage the buying of your commodity costs – the energy itself.

With flex contracts you normally get lower initial energy costs, but there is no guarantee that this situation will remain the same. You could end up paying more if the wholesale rate rises above the fixed rate you could alternatively secure. The same scenario goes for your non-commodity costs.

“Select the right option to meet your bespoke energy strategy”

Once you have decided which contract option suits your energy needs and appetite for risk, we can manage the non-commodity elements of your portfolio – ensuring you aren’t overpaying for things such as your KVA. Your pass-through costs can also be actively managed by monitoring TRIADS – we can also look at balancing your energy usage. A prime example of this could be entering a multi-tiered seasonal time of day contract and adjusting your opening hours or shift patterns to benefit from lower energy costs in off-peak times.

“We find the right strategy for your business”

The need to work with a trusted adviser

Most businesses are too busy with day to day tasks to think about their energy usage, and only really notice it once it starts to hit cash flow and the bottom line. Energy is a key part of any business’ planning; if you don’t have an in-house expert, you need to work with an expert energy management team such as UK Energy Management (UKEM).

We will tailor your Energy Procurement strategy through our holistic approach to your complete energy infrastructure, monitoring how and when the business is consuming energy, increasing energy efficiency, reducing your carbon footprint, etc. to save your business money.

UK Energy Management deliver:

    • Expert Impartial Advice
    • Monitoring, Targeting, Analysis, and Procurement Services
    • Established and Trusted Suppliers and Installers

 

“We provide the expertise you need”

We are your hub throughout the process, utilising our well-established relationships with energy experts who cover the whole energy spectrum. Your business can be energy efficient and cost effective with our help.

If you are unsure where you stand regarding this legislation, then contact us for an initial consultation on 020 3893 8108 or contactus@ukenergymanagers.com today.

 

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