Buying power: The role of an energy procurement strategy in your organisation  

Procurement forms the foundation for every organisation’s operations. Identifying your requirements, sourcing what is required and negotiating your terms not only impacts your daily operations, but overall strategy and budget.  

Regardless of size and sector, daily activities require power. Therefore, decisions around energy purchasing sit at the core of your organisation. How and when you buy energy matters. 

However, the energy market landscape is vast and winding. Every organisation has unique requirements that exist within wider societal circumstances, such as the pandemic, the energy crisis and the UK government’s 2050 net-zero goal.  

Furthermore, events on the other side of the world, including weather, geopolitical conflicts and supply chain issues, can have instantaneous impact on electricity and gas prices in the UK.  

The market has been extremely volatile over recent years and is not in the same place it was 12 months ago – continuous review of your buying strategy ensures its effectiveness. 

An experienced energy partner can help you navigate this landscape. 

What does this mean for your energy procurement? 

Regardless of market conditions, making informed decisions for your organisation requires thorough evaluation of the options available.

As prices change, energy buying strategies will need to adapt. Continuously reviewing your energy procurement strategy ensures its effectiveness, while access to expert information allows you to make informed decisions.    

When buying energy is discussed, the following terms are often mentioned: 

Fixed procurement 

A fixed price, fixed term contract means your costs remain the same throughout the length of your contract. If the market was to suddenly change and suppliers increased their prices, your energy bill would not change.  

 Flexible procurement 

A flexible risk managed contract means you can make multiple purchasing decisions throughout your contract and the price you pay varies depending on the market at the time of purchase. 

Collective purchasing 

In collective purchasing, a group of consumers come together via a consortium to place a specific contract from a gas and electricity supplier. 

What to consider

Each procurement option comes with considerations, advantages and disadvantages and is dependent on your organisation’s appetite for risk. An expert partner will carefully consider your circumstances and requirements while supporting you in finding the best solution for your organisation. 

However, buying smart is not everything. An experienced partner can support you in ensuring you have been charged correctly for your utilities and any inaccuracies are addressed. 

Utility bills are complex, full of nuanced industry information an energy manager doesn’t always have access to. Errors and inaccuracies can be overlooked, but also uncovered. 

A cost audit service examines your historical billing in forensic detail to detect past errors before recovering money back to your organisation. The worst outcome for you will be a clean bill of health. If nothing is found, there is no cost.  

Want to know more? 

Our Energy Market Review offers an extensive overview of the factors which have driven the direction of electricity and gas prices in recent months and where we are now. You can download a copy below.