Buying business energy effectively is a crucial aspect of every businesses financial processes. Buying business energy cheaply is an important aspect of running a business, as ultimately, business energy spend effects businesses bottom line. Business energy can often be an expensive element of your business activity especially if you don’t follow the necessary steps.
Maintaining a business supply contract for electricity and gas is essential because if your business falls outside of its contract, you will be charged “deemed rates” which are usually significantly higher than market rates and will roll on indefinitely.
Buying Business Energy – Electricity Procurement
Business utility contracts agreements can be made directly with suppliers or through a TPI (Third Party Intermediary) such as an energy broker or consultancy offering energy procurement services. Generally, TPIs are engaged as specialists for larger supplies as they have the expertise and experience in negotiating large supply contracts.
Electrical energy procurement has two distinct elements, electricity supply (your usage) and electrical distribution (the network that connects you). In most cases the electricity supplier will include the distribution costs in your supply agreement and thus usage bills.
Assessing which supplier and supply tariff is most suitable for your organisation is dependent upon many aspects including, but not limited to, the type of supply, how much is used and when.
The unique MPAN supply reference, refer to “What is an MPAN?” for details, will provide many of the details and generally the historical supplier bills will provide most of the rest.
Every electrical supplier will require these details along with an AQ (annual quantity) to be able to provide a quotation.
Often a major task in commercial electrical procurement is the like-for-like comparison of different supplier’s quotes; this is where a TPIs experience is very worthwhile.
Business Gas Procurement
Commercial gas procurement agreements can also be made directly with gas suppliers or through a broker or TPI (Third Party Intermediary). Assessing which supplier and supply tariff is most suitable for your business is dependent upon similar aspects including the type of supply, how much is used and when. Generally, the historical supplier bills will provide most of the necessary information for the quote.
Each gas supply has a unique MPRN supply reference. For more information, refer to “What is an MPRN?“
Again, often a major task in gas procurement is the like-for-like comparison of different supplier’s quotes; this is where a TPI’s experience is very worthwhile.
What We Do
As an overview, Efficiency Direct acts as a TPI for several of our larger clients buying about 13GWh per annum of electricity and about 10GWh per annum of gas.
From a commercial viewpoint, energy procurement should be integrated with energy management so that energy is bought effectively and used efficiently.