Business Energy Procurement
Business energy procurement is a proactive process where large consumption businesses can secure great deals on business energy contracts.
Many companies operating in energy-intensive industries like manufacturing, warehouses and education may have energy procurement built into their strategy. Whilst important for smaller businesses also, having a process in place for larger users means greater control of costs.
Business Energy Procurement Made Simple
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Work with our specialist bespoke energy team to understand your business needs and goals
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We'll provide you with quotes for bespoke tariffs that meet your exact requirements
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We'll move you over to your new supplier and make sure everything is in place
How Does Commercial Energy Procurement Work?
The main objective of commercial energy procurement is to secure great energy rates with a supplier that can manage a large consumption user. This may involve understanding and implementing data management systems to understand how the company uses gas and electricity to identify savings and efficiencies.
Whilst price is an important factor, other important considerations come into the decision-making process. For example, new supplier contracts must meet any sustainability targets, meet regulations and offer a data package that allows the company to make progress on their journey to becoming more sustainable.
You may need to identify what type of energy meter you have to get the most accurate quote. For example, most large consumption users will have a half-hourly meter for their electricity.
Our team of bespoke energy specialists can help map out the entire process and create a contract that fits your exact requirements. Our team will also help you identify your meter type if you’re struggling to find this information.
Why Larger Businesses Should Implement Energy Procurement Processes
There are lots of benefits to implementing an energy procurement process.
- Saving money - the obvious one is saving as much money as possible. Even 1p off a unit rate can save a large consumption user hundreds of thousands depending on usage.
- Forecasting - we can help you forecast likely energy costs for the financial year ahead by obtaining your usage history.
- Data management - we can work with you to secure a supplier with energy management software to help you find extra savings.
- Better renewal process - implementing an energy procurement process means you will be very aware of what is going on in the market and will be able to make informed decisions on when to switch business energy.
- Avoid hidden charges - with a strategy in place, you’re more likely to avoid any hidden charges adding large amounts to your annual bill.
What Is Tendering In Business?
Tendering is a process where organisations invite bids from suppliers to provide goods or services for large projects.
At Power Compare, we submit your business case to our panel of suppliers so they can bid to win your contract. They will offer you their best and most competitive prices for you to choose from.
Energy Procurement Contract Types
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Flexible Approach Contract
This contract type is popular with energy procurement strategies as this involves buying gas and electric in bulk. Large consumption organisations may have cash set aside for energy bills and can get deals close or even at wholesale market rate. Bulk purchase often requires buying months or years ahead.
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Pass-Through Contract
Pass through contracts are for larger usage businesses that do not require price certainty. Similar to a variable tariff, costs may vary and you will take on more risk as prices may go up or down. You will have access to cheaper unit rates but may take on more administrative costs that are passed on from National Grid Levies, DUoS and Distribution Network Charges. These can change up to four times per year.
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Fixed Contract
A fixed price contract means that unit rates and standing charges will remain the same at the agreed amount until the contract end date. This is the same type of contract you will find with smaller business energy contracts and is still valuable for any size business that wants the security of fixed costs.
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Blended Contract
This allows businesses to extend their current contract at the same or a lower rate than what has been agreed. Some suppliers are offering these types of deals for businesses who may have agreed to a deal when energy prices have been higher.
You may end up paying more overall and companies with an energy procurement strategy in place will likely avoid this.
How Energy Procurement Varies By Industry
Depending on the industry the organisation is operating in, it may require specific processes that must be met when procuring products and services. This is no different for the energy supply.
Energy Procurement For Schools & Education
The government outlines a framework for procurement that should be followed. Here’s how it is broken down:
- Have a framework agreement - most schools and educational institutions will have this in place. This pre-agrees terms and conditions and legal protections.
- Get at least 3 quotes from suppliers - when you compare business energy suppliers with us, you will get more than 3 quotes from a panel of trusted UK suppliers. You’re in safe hands and will have checked this box.
Energy procurement for manufacturing, warehouses and various other energy-intensive industries should follow similar guidelines; with the addition of making a list of desirable features. This may include energy management software and other renewable goals.