Energy procurement is the process of acquiring energy products and services, such as electricity and natural gas, in a cost-effective and efficient manner. Energy procurement is an important aspect of energy management, as it can significantly impact a company’s energy costs and the sustainability of its energy supply.

Effective energy procurement involves identifying the energy needs of the business, researching and comparing energy options, negotiating the best prices and terms, and implementing and managing the energy supply. It requires a thorough understanding of the energy market, as well as the ability to analyze and optimize energy usage and costs.

In this guide to energy procurement, we will explore the key considerations and strategies for buying energy smarter, including how to research and compare energy options, negotiate the best prices and terms, and purchase green energy. Whether you are a business owner, property manager, or energy professional, this guide will provide you with the knowledge and tools you need to make informed decisions about your energy procurement strategy.

Energy Procurement: Everything You Need to Know

A step-by-step guide to energy procurement strategy

Identify your energy needs: The first step in developing an energy procurement strategy is to identify your energy needs. This may involve conducting an energy audit to assess your current energy usage, identifying any potential energy-saving opportunities, and determining your future energy needs.
Research and compare energy options: Once you have a clear understanding of your energy needs, start researching and comparing energy options. This may involve reviewing energy rates and contract terms from multiple energy suppliers, as well as considering factors such as the environmental impact of the energy sources, the stability and reliability of the energy supply, and any additional fees or charges.
Negotiate the best prices and terms: After you have identified the energy options that best meet your needs, negotiate the best prices and terms with the energy suppliers. This may involve working with an energy broker or consultant to negotiate on your behalf, or negotiating directly with the energy suppliers.
Implement and manage the energy supply: Once you have secured an energy supply that meets your needs, implement and manage the energy supply to ensure that you are getting the best value for your energy spend. This may involve monitoring energy usage and costs, identifying any energy-saving opportunities, and making any necessary adjustments to your energy procurement strategy.

Fixed Business Energy Procurement

Fixed business energy procurement is a type of energy procurement strategy in which business contracts with an energy supplier to purchase a fixed amount of energy at a fixed price over a fixed period of time. Fixed business energy procurement is often used by businesses that want to budget for their energy costs and reduce their exposure to energy price volatility.

Under a fixed business energy procurement contract, the business pays a set price for energy, regardless of market fluctuations or changes in energy usage. The length of the contract can vary, but is typically one to three years.

The main benefits of fixed business energy procurement are:

Price stability: By locking in a fixed energy price, businesses can avoid the uncertainty of fluctuating energy rates and budget for their energy costs with confidence.
Budgeting: Fixed business energy procurement allows businesses to budget for their energy costs over a set period of time, which can be helpful for financial planning.

Flexible Business Energy Procurement

Flexible business energy procurement is a type of energy procurement strategy in which a business contracts with an energy supplier to purchase energy on a flexible, as-needed basis. Flexible business energy procurement is often used by businesses that have variable energy needs or that want to take advantage of market fluctuations in energy prices.

Under a flexible business energy procurement contract, the business pays a market-based price for energy, which may fluctuate based on market conditions. The business can purchase energy as needed, without being locked into a fixed energy price or quantity.

The main benefits of flexible business energy procurement are:

Price flexibility: By purchasing energy on a flexible basis, businesses can take advantage of market fluctuations in energy prices and potentially save money on their energy costs.
Usage flexibility: Flexible business energy procurement allows businesses to purchase energy as needed, based on their energy usage patterns. This can be useful for businesses with variable energy needs.
Contract flexibility: Flexible business energy procurement contracts often offer flexibility in terms of the length of the contract, allowing businesses to adjust their energy procurement strategy as needed.

What is Renewable Energy Procurement?

Renewable energy procurement refers to acquiring green energy products and services that include solar, wind, or hydroelectric power. Renewable energy procurement does it in a cost-effective and sustainable manner. Renewable energy procurement is an important aspect of energy management, as it can help businesses and individuals to reduce their carbon footprint, meet sustainability goals, and potentially save money on energy costs.

Renewable energy procurement involves identifying the renewable energy needs of the business or individual, researching and comparing renewable energy options, negotiating the best prices and terms, and implementing and managing the renewable energy supply. To avoid being stuck with a bad contract, it is recommended to use the services of an energy broker.

There are a variety of approaches to renewable energy procurement, including self-procurement, where a business or individual manages the renewable energy procurement process on their own, and outsourcing to a renewable energy broker or consultant. Each approach has its own benefits and drawbacks, and the best approach will depend on the specific needs and goals of the business or individual.

Get started with your energy procurement quote

If you are considering energy procurement for your business or organization, one of the first steps is to get a quote from an energy supplier. A quote is an estimate of the energy cost and contract terms that an energy supplier is willing to offer based on your energy needs and usage.

To get started with your energy procurement quote, follow these steps:

Determine your energy needs: The first step in getting an energy procurement quote is to determine your energy needs. This may involve conducting an energy audit to assess your current energy usage, identifying any potential energy-saving opportunities, and determining your future energy needs.
Research and compare energy options: Once you have a clear understanding of your energy needs, start researching and comparing energy options. This may involve reviewing energy rates and contract terms from multiple energy suppliers, as well as considering factors such as the environmental impact of the energy sources, the stability and reliability of the energy supply, and any additional fees or charges.
Request a quote: After you have identified the energy options that best meet your needs, request a quote from the energy suppliers. Many energy suppliers offer online quote tools that allow you to get a quote quickly and easily. Alternatively, you can contact the energy supplier directly to request a quote.
Compare quotes: Once you have received quotes from multiple energy suppliers, compare the quotes to find the one that offers the best value. Pay attention to factors such as energy rates, contract terms, and any fees or charges.

Importance of Energy Procurement

There are several reasons why energy procurement is important:

Cost savings: Effective energy procurement can help businesses to save money on their energy costs by identifying the most cost-effective energy options and negotiating the best prices and terms.
Sustainability: Energy procurement can also play a role in sustainability by enabling businesses to choose renewable energy sources and reduce their carbon footprint.
Risk management: Energy procurement can help businesses to manage their energy risks by choosing energy suppliers that offer stable and reliable energy supplies and by protecting against energy price volatility through fixed price contracts.
Compliance: In some cases, energy procurement may be required to comply with regulations or meet sustainability goals. For example, businesses may be required to source a certain percentage of their energy from renewable sources.

Overall, energy purchasing, when done the right way, can help businesses save money, manage energy risks, and meet compliance requirements. By effectively managing their energy procurement, businesses can optimize their energy usage and costs and make informed decisions about their energy supply.

What is Sustainable procurement?

Sustainable procurement is concerned with getting goods, services, and works in a way that maximizes the economic, social, and environmental benefits while minimizing the negative impacts. Sustainable procurement is an important aspect of sustainability, as it can help organizations to reduce their environmental footprint, support the local economy, and improve the well-being of their stakeholders.

Effective sustainable procurement involves identifying the procurement needs of the organization, researching and comparing sustainability options, negotiating the best prices and terms, and implementing and managing the procurement process. It requires a thorough understanding of the sustainability impacts of different products and services, as well as the ability to optimize the procurement process for efficiency and effectiveness.

There are a variety of approaches to sustainable procurement, including self-procurement, where an organization manages the procurement process on its own, and outsourcing to a procurement consultant or broker. Each approach has its own benefits and drawbacks, and the best approach will depend on the specific needs and goals of the organization.

Conclusion

Energy procurement refers to the process of getting gas and electricity. It aims to do so in a way that does not generate many costs and is not harmful for the Planet. Energy procurement is important as it can help businesses reduce their energy costs and improve the sustainability of their operations.

Effective energy procurement involves identifying the energy needs of the business, researching and comparing energy options, negotiating the best prices and terms, and implementing and managing the energy supply. There are a variety of approaches to energy procurement, including self-procurement, where a company manages the energy procurement process on its own, and outsourcing to an energy broker or consultant.

By following the steps outlined in this guide, businesses and organizations can optimize their energy procurement strategy and make informed decisions about their energy supply. Whether you are a business owner, property manager, or energy professional, the knowledge and tools provided in this guide will help you to buy energy smarter and reduce your energy costs.