The advantages of flexible energy purchasing for businesses

20 Mar 2024

Published in: Member News

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With utility expenditure high on the agenda, the importance of energy procurement strategies cannot be overstated. One approach gaining popularity is flexible energy purchasing, offering businesses a strategic advantage over traditional fixed price contracts.

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With utility expenditure high on the agenda, the importance of energy procurement strategies cannot be overstated. One approach gaining popularity is flexible energy purchasing, offering businesses a strategic advantage over traditional fixed price contracts.

Mitigating risk and market monitoring

Flexible energy purchasing provides a proactive solution to the challenges of relying solely on internal resources for energy contract management. By opting for a flexible procurement strategy via CEC, businesses gain access to constant market monitoring, allowing them to adapt quickly to market fluctuations and make informed decisions.

In contrast with fixed procurement, where power prices are fixed immediately without regard to market conditions, flexible procurement also allows clients to take advantage of dips in the market, spreading risk in a more strategic way.

Previously, engaging in the wholesale market was reserved for large organisations. However, flexible purchasing opens the door for collective participation, enabling smaller businesses to benefit from strategic energy procurement.

Visibility and performance measurement

Clients adopting flexible procurement strategies via CEC gain valuable insights into their energy performance through their Wholesale Market Access (WMA) dashboard on our CECIL client portal. This transparency empowers businesses to visualise their energy consumption patterns and make data-driven decisions.

Proactive risk management

One of the key advantages of flexible energy purchasing is the proactive management of risk. Our flexible energy procurement specialists assess the client's risk appetite and tailor energy commodity price risk management accordingly. This includes a detailed focus on contractual arrangements, ensuring absolute transparency throughout the process.

Additionally, businesses benefit from the expertise of our skilled, experienced and qualified energy procurement and risk management team. They have hands-on experience managing diverse energy portfolios, adding a layer of security and optimisation to the overall energy strategy not just for the present but also for the future.

In the current market, prices have eased significantly since the crisis of 2021-2022, but volatility remains. To extract value and to spread client risk, prompt, experienced and pro-active management of this new energy landscape is required.

Strategic tools and communication

To deliver effectively, flexible energy purchasing requires the use of specialist statistical and technical analysis tools, supported by access to live market pricing. This approach allows businesses to balance short-term and longer-term risk management effectively. Regular communication, coupled with daily market insight reports, keeps clients informed about market trends and legislation, enabling them to make well-informed decisions.

Renewable and green options

Flexible energy purchasing also provides the opportunity for businesses to explore renewable and green purchasing options. For those with sustainability goals, our advisors can guide clients in choosing environmentally friendly alternatives where necessary.

For an at large chat about whether flexible energy procurement is right for your business, contact one of our Client Relationship Managers:

Nigel Addison-Evans at 07500 027480 or nigel.addison-evans@cec.uk.com

John Loizou at 07425 102 023 or john.loizou@cec.uk.com