At Bryt Energy, we believe that implementing a new mindset will enable a huge number of new opportunities, better control of energy usage and spend, and a faster route to a new, net zero energy system.
With businesses feeling the implications of a volatile period for energy prices and high inflation, many are facing a difficult balancing act. Day-to-day operational challenges require immediate attention but the transition to sustainable, net zero operations is also pressing. However, with access to more data than ever, businesses are better positioned to evaluate their procurement options. Having better insight into energy usage enables businesses to work with their supplier to establish a contract that truly meets their requirements – and one that can help them take full advantage of the energy transition.
This means taking a different approach to electricity procurement. Businesses will need to work directly with suppliers and take a more holistic approach. This means not just thinking about unit and standing charges, but truly understanding consumption, volume and energy profiles, and thinking ahead.
At Bryt Energy, we understand that for businesses who are already facing more immediate challenges, this may feel daunting. But we believe that implementing a new mindset will enable a huge number of new opportunities, better control of energy usage and spend, and a faster route to a new, net zero energy system.
Here are 3 top tips to supercharge your business electricity procurement strategy:
1. COLLECT AND USE ACCURATE DATA
Gaining accurate insight into energy usage is key to a purchasing strategy in the current energy market – actions must be data driven and well planned. Luckily, today’s businesses are well equipped to get a strong handle on what they expect to consume and when they expect to consume it. In fact, most companies may be more ready than they might think – much of the useful data can be provided by energy-using assets that are already owned.
This is thanks to technologies such as smart meters and data visualisation tools, which allow businesses to find out exactly how much electricity they are using and when, as well as which devices or machines are using the most electricity. With a more accurate prediction of your usage, a more suitable procurement plan can be drawn up. Businesses will have everything they need to approach suppliers, who can then put together a contract based on their exact usage. This data can also help suppliers build the right mechanisms into business energy contracts to help them navigate a volatile energy market and prepare for the future.
2. COLLABORATE WITH SUPPLIERS
Adopting a new energy procurement strategy doesn’t mean going it alone. In fact, it’s quite the opposite – with accurate data and insight, talking to suppliers can make all the difference. Energy procurement no longer needs to be based on estimating usage, predicting short-term needs or risking mismatched consumption patterns. Suppliers are now able to utilise a good understanding of a customer’s business operations and support in creating a more accurate forecast.
After working more closely with suppliers, contract structures can be based on exact usage whilst also factoring in plans for the future. This means businesses are more likely to avoid penalties associated with inaccurate consumption estimates or future changes to usage.
Furthermore, adopting a new procurement strategy doesn’t mean compromising on control. Using more accurate insight, suppliers can help businesses react to the current market and navigate the energy transition, all while retaining a high level of control over their energy usage.
3. CHOOSE A CONTRACT THAT SUITS YOU
Traditionally, businesses have chosen between variations on fixed and flexible supply contracts, with many waiting until their renewal period before making the crucial decisions on their next contract or preferred supplier. But with better consumption insight and a more direct approach with suppliers, businesses can create a contract that truly meets their needs.
For many that have focused on fixed contracts, flexible options may now be suitable, but there are some key things to consider:
- Fixed contracts are beholden to the market price of the day and so don’t allow businesses to take advantage of price drops. However, they traditionally provide a high level of budget certainty and protection against market spikes, with a set rate per unit of energy.
- Flexible contracts, whilst potentially more complex, allow businesses to take advantage of fluctuations in the market and make multiple purchasing decisions throughout the term of the contract. The agreement is more likely to be based on real, accurate energy usage and enables the business and supplier to share some of the risk.
However, when considering contract options, it’s also important to consider what your electricity usage may look like in the future. The uptake of transitional technologies will change businesses’ electricity usage, resulting in volume and profile changes. Traditional contracts don’t allow for such changes, potentially leaving both businesses and suppliers exposed within a volatile market – resulting in additional fees or premiums. To thrive in a net zero future, businesses need to choose a contract that will suit them both now and going forwards.
Ultimately, it’s important to use the most accurate data available and have a conversation with your supplier to choose the right electricity contract. Every business’s needs will vary slightly, and only with an in-depth understanding of those requirements can you reach the right decisions.
THE TIME IS NOW
With a new procurement strategy in place, businesses can now think about and work towards optimising their consumption in line with the whole energy system’s needs. With increased knowledge and new technologies, there’s never been a better time to unlock value from your operations.
To learn more, read our FREE guide on Navigating the net zero energy transition here. Part 2: Take Control of Your Energy, Now, is available now.
N.B. The information contained in this entry is provided by the above supplier, and does not necessarily reflect the views and opinions of the publisher