Energy procurement is a complex and ever-changing process. With the recent rising cost of energy, it is more important than ever for large businesses to get it right. Yet, many large businesses continue to make the same mistakes when it comes to energy procurement.
We’re committed to helping more businesses avoid doing so, so here are eight mistakes you can avoid to ensure you spend less through your procurement.
The first step to effective energy procurement is to have a clear energy strategy. It should outline your business's energy goals, such as reducing costs, improving sustainability, or increasing resilience.
The right strategy is a foundation from which you build the pathway to achieving these targets. You use it to develop a procurement plan which then helps you achieve your goals.
The energy market is always changing, which means you'll need to stay up to date on the latest trends. This includes understanding the distinct types of energy contracts, pricing structures, and risks involved in energy procurement.
By understanding the market, you can make informed decisions about your energy procurement strategy. You stay up to date by getting regular tips from industry experts - the Trident Utilities YouTube is one place full of up-to-date industry trends and insights.
Don't go with the first supplier you see. Instead do a thorough analysis of all the available options. Research and compare different suppliers before you enter into an energy contract. This includes looking at their prices, terms and conditions, and reputation.
Through detailed research, you can ensure you are getting the best possible deal on your energy. And a contract which supports your specific goals and needs.
Suppliers will always look to get the best possible price for their products or services. This is why it is important to negotiate hard with suppliers when it comes to energy procurement. By negotiating hard, you can get a better price on your energy and save your business money.
Energy consultants such as ourselves can compare prices and negotiate deals on your behalf. We also have strong long-lasting relationships with the suppliers which make negotiating easier.
The unexpected can happen. To help mitigate the impact when it does, businesses need to have a contingency plan in place in case of an energy emergency. This plan should outline how your business will continue to run if you suffer a power outage or any other energy disruption.
Contingency plans help you minimise the impact of an energy emergency on your business. This could be a crucial step to saving money in the future.
6. Not monitoring your energy usage
Businesses need to check their energy usage regularly. This will help you identify areas where you can save energy and reduce costs as well as acting quickly when there are sudden surges in usage.
There are many ways to check how much energy your business is using. These include installing smart meters or using energy management software such as our system, Pulse.
Lowering usage is best achieved through improving efficiency and there are different energy efficiency measures businesses can use to reduce energy consumption. These measures can include upgrading to more efficient equipment, improving insulation, and implementing energy-saving practices.
Doing so enables businesses to save money on their energy bills and, crucially, reduce their environmental impact. More efficient energy usage is a critical step if you are looking to transition to net zero.
Finally, on the topic of net zero, renewable energy sources like solar and wind power can offer businesses many benefits. These include lower energy costs, reduced carbon emissions, and improved energy security (we've detailed some of the benefits of renewable energy for SMEs).
As almost all renewable energy sources come from within the UK the price you pay is less likely to be influenced by geo-political factors. After the war in Ukraine saw energy prices surging in 2022 this is particularly important.
Do you want to know more about how to save money on your business procurement? Book a call with one of our experts today.