Energy Procurement: Timing Is Everything

By Author: RObert Smith
Total Articles: 26
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Have a think about what contracts you have due for renewal this year? Cleaning? Insurance (employer liability, professional indemnity, car)? Energy Procurement?

Now think about how you normally renew your contracts? Do you accept the renewal price from your current supplier? Shop around for the best deal? Or possibly use an internet comparison site?

It's very rare for people and increasingly businesses to recognize or seek the best deals in advance of their contract renewal date. To find the best energy prices you should monitor the market, not just weeks before but months before your renewal is due.

If you don't think ahead when it comes to your Energy Procurement UK and accepts that your current renewal rate or rate on comparison sites is reflective of the market you could be missing out on significant savings.

The energy market is an extremely complex and volatile commodity. For the last 2 years since October 2008 energy prices have fluctuated dramatically.

Understanding how your energy price is derived is the first step to changing your renewing habits.

Roughly 70% of your energy ...
... costs can be attributed to commodity with supplier’s margin equating roughly 5%. So although it is prudent to run a competitive tender to reduce the supplier’s margin, the biggest effect you can have of reducing your energy costs is by locking in your energy contracts when wholesale prices are low. This could be three, six or even twelve months before your renewal date.

The % splits to vary depending on your profile class / type of businesses but commodity always plays a major role in your price.

Looking back at energy market prices from October 2008, depending on when you renewed your energy contract you could have saved about 40%. Start by setting up an energy market tracker to track energy prices between the times you signed your current contract and when it expires. Alternatively you can employ an energy consultant or energy broker to do this for you, leaving your contacts in the hands of professionals and you safe in the knowledge that you are receiving the best rates.

The green electrician group takes your renewals even further and calculates what impact the change in wholesale price has had on the cost of your next renewal whilst also providing you with market commentary to provide a clearer picture of what is happening in the market. With The green electrician group are kept completely in the picture whilst leaving the worry and management of your contracts with them.

To find the best paving company in the Surrey area visit Energy Procurement at TheGreenElectrician.co.uk