News Archive - procurement

An energy framework that delivers for the public sector

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Energy framework

Looking after the health, fitness, safety and education of the nation does not come cheap. In 2019, the figure for powering the public sector was estimated to be an eye-watering £3.4 billion.

Keeping offices, hospital wards, classrooms and leisure centres heated, lit, ventilated and air conditioned contributes towards a large percentage of a local authority’s total expenditure.

Controlling costs is a key focus for councils under financial pressure. Fundamental to this goal is smart energy procurement, even more so in times when the markets are volatile due to a host of geopolitical factors and health-related issues such as the coronavirus outbreak.

Buying energy is not always straightforward but the Choice Energy Framework (CEF), which involves a panel of six pre-selected suppliers, makes it as simple and as competitive as it can be.

With a range of supply parameters to consider (e.g. scope of services, technical capability, procurement mechanism), public sector clients need to have access to easy and ready to use Value for Money resources.

The aim of CEF is to make procuring these services more user-friendly. It minimises the cost of energy procurement while retaining accessibility and transparency.

Approved by The Official Journal of the European Union (OJEU), the CEF enables signed-up organisations to avoid time-consuming form filling and could save them as much as £20,000 in admin fees.

The CEF has been developed by Shepton Mallet Town Council and is being managed by Energy Management LLP.

The result of this is a Framework Agreement designed and procured by the public sector, for the public sector, applicable throughout the United Kingdom.

For more details on CEF, click here.

Energy Procurement – the key things to consider

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With so many external factors determining the price of the fuel we pay, from international trade disputes to extremes of weather, procuring gas and electricity at the right price and at the right time can seem like a daunting task at times.

Here, we list some of the key things you need to consider before entering into negotiations with energy suppliers.

Be pro-active

Prices can fluctuate wildly in a matter of hours so extra vigilance when it comes to monitoring markets is key. What seems like a good deal one minute may not be so good the next; nobody has a crystal ball so set triggers/alarms in your monitoring process to minimise risk.

Having access to software such as EM-Powered, our bespoke energy management portal, certainly helps in this respect.

Time of contract

It’s important to get familiar with your Contract End Date so you can weigh up your options well before it is time to put pen to paper on a new deal.

You can fix a contract in advance depending on the level of budget certainty you want. Doing this ensures guaranteed payments, or alternatively, you may wish to choose a flexible contract to access market-reflective prices and gain potential rewards.

Signing a Purchase Power Agreement, for example, is a great way to get ahead of your competitors, showcase your commitment to sustainability, and plan for risks while leveraging value for your organisation.

Terms and conditions

Get down to the detail and ensure the terms and conditions are suitable for your business, otherwise unwanted penalty charges may occur, or you could be locked into a contract that no longer works for you. Volume Tolerances and Max/Min thresholds are two examples of areas that can get overlooked.

Invoice validation

Check your supplier bills are correct. On average, 20% of them are wrong, amounting to 5% of the overall bill value, simply because data may have been entered incorrectly. Only pay for what you use!

Negotiate

Remember, if you don’t ask, you don’t get. It’s a simple adage but one that rings true in all facets of a business. If you don’t feel comfortable doing this because of a lack of expertise in energy procurement, you can always employ an external energy management consultancy to get the best deal on your behalf.

How does procurement work?

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Energy Management are experts in two types of procurement – water and energy.

Water procurement

In April 2017, the department for the Environment, Food and Rural Affairs (DEFRA) introduced major changes to the water and sewage market, opening it up to competition. Our in-house expertise in water procurement, allied to investment in new systems, means we are best placed to help you take advantage of increased competition.

We have a proven track record in negotiating deals however big or small, both in terms of price and improved service level as well as gaining improved control over your water bills.

There are many suppliers to choose from which has resulted in improved service overall and reductions in cost. Energy Management LLP help businesses to make informed decisions that will meet their individual needs.

Water rates are fixed for the year and get reviewed every 5 years (Amp). This is due to be reviewed next April, which could make it more competitive.

What we can do for you?

  • Leak detection
  • Invoice validation
  • Trade effluent
  • Highway surface drainage banding size – this is set by the wholesaler and can be wrong
  • Meter replacement – organising site visits, old and new meters
  • Consumption and leak monitoring:

Water pipe leaks can go undetected for months or years, as a team we can help coordinate on-site leak protection surveys – checking meters buried in the ground, as well as installing remotely accessible metering.

Energy procurement

Energy procurement in the simplest format is the process of finding the best energy recommendation for your business. This considers price, sustainability, renewables and the future needs of your business. We use our own specialist knowledge, analysis expertise and market intelligence to bring you the best solution.

We monitor your contract so that we can be proactive when sourcing you a new deal, whether this is for Fullflex, mid-flex or fixed-price contracts.

What can we do for you?

  • Search once for all the major energy suppliers
  • Extended fixed pricing for up to 60months
  • No sign-up, no commitment required
  • Potentially saving your business £1,000s
  • Business energy procurement specialists
  • Market intelligence:

We make decisions based on hard data and excellent communication between ourselves and the customer. We watch the markets on a daily business, watching trends and technologies identifying opportunities to improve performance above and beyond expectations.

If you want to gain more market knowledge on a monthly basis then please subscribe to our market intelligence report by filling in the brief form found at the bottom of the Energy Management website. It provides you with the latest market insights on Electricity, Gas and Water.

To discuss energy procurement with one of our team further please contact via email: sales@energymanagementltd.com or call: 01225 867722

Case Study: North Somerset Council

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Energy Management and North Somerset Council have enjoyed a profitable relationship over many years.

The background

Faced with budget cuts, North Somerset Council (NSC) contacted us because they were looking for a reputable energy consultancy to help them find savings on one of their biggest overheads – energy.

Our relationship with NSC started in 2009 and it is set to continue into a third decade due to the high levels of customer satisfaction.

NSC benefits from the full range of our energy management services including Invoice Validation. More than £350,000 has been recouped from suppliers in the last six-and-a-half years after our team discovered the Council had been billed incorrectly.

Services offered

  • Procurement
  • Dedicated account management
  • Market analysis
  • Invoice Validation
  • Engineering Advice
  • EM-Powered energy management portal

Benefits

  • Accurate invoicing
  • Procurement of contracts at competitive rates
  • Ease of service for technical issues e.g.; new meter installs, change of tenancy application

What NSC say about us?

“Energy Management provides unrivalled expert advice, which has resulted in significant cost savings for the Council. We are extremely happy with the service we receive from Energy Management LLP and would recommend them without hesitation.” – Commercial & Compliance Officer for the Council.

 

Power and politics – how global issues are affecting energy prices

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All eyes will be on Vienna, on June 20-21, as The Organisation of the Petroleum Exporting Countries (OPEC) will host its 7th International Seminar at the Imperial Hofburg Palace.

Discussions between oil industry stakeholders will focus on reinforcing OPEC’s longstanding commitment to strive towards a secure and stable market in support of a healthy global economy.

As things stand, the oil market is anything but stable and this is reflected in energy prices affecting consumers in the UK, which are currently at a level higher than anywhere else in Europe.

In the energy market, there is a direct correlation between oil prices – over $80 a barrel at one stage last month – and the amount business consumers and homeowners pay for their fuel.

The mood in the room in Vienna could play a vital role in helping to calm traders’ nerves and enable the market to weather the “perfect storm” caused by a combination of geopolitical issues, safety concerns and diminished storage supplies, a summary of which can be found below.

So, should businesses stick or twist when it comes to procuring energy before the great and the good of the oil industry convene in the Austrian capital?

For those customers looking to make decisions on future pricing, it’s a tough call. There is more than enough evidence from historic pricing to indicate the current bullish run will come to an end, but the key is determining when.

If talks go well and OPEC agrees to remove some of the current production cuts, then prices, which have enjoyed a brief lull in recent days, could continue to come down. But if that fails to happen, they could easily rise again.

Knowing when to fix a price – and for how long – is one of the key pillars of energy management and we find that a proactive approach pays dividends.

If you would like to talk to one of our energy consultants and get some specialist advice on energy procurement and the other services we offer, please get in touch on, 01225-867722.

The Perfect Storm – why the oil industry has got energy users over a barrel

Red alert: The newly re-elected Venezuelan government appears intent on continuing its path towards a socialist autocracy and therefore runs the risk of reduced foreign investment and the application of stringent economic sanctions. Venezuela is one of the world’s top 10 largest oil producers.

Trumped: After November 4, the US will reimpose sanctions on Iran’s oil exports, as a result of its immediate withdrawal from the Iran nuclear deal. Iran currently contributes roughly 3.8 million of the 98 million barrels of oil produced daily worldwide. Most energy experts say that a revival of American sanctions on banks and other companies that do business with Iran could reduce Iranian production and exports by at least 10 to 15 per cent, and that drop could take six months or more to be felt. Either way, it’s very unsettling for the oil price markets.

Poles apart: Poland’s state-owned oil and natural gas company signed a five-year deal in November to import liquefied natural gas (LNG) from the United States. The deal was signed as Poland and the rest of eastern Europe work to dramatically reduce their dependence on pipeline-delivered gas from Russia. Traders are anxiously waiting by to see how Russia reacts.

Rough times: Continued outage problems with the main North Sea gas pipeline that supplies gas from Norway into the UK are a worry. One shutdown in December, for example, sent oil prices soaring. Falling storage capacity for natural gas has left UK supplies increasingly susceptible to short-term outages, with the shutdown of Centrica’s Rough storage site, the country’s largest facility, making the Uk even more reliant on imports from Norway.

Cracks appearing: Nuclear power is a mainstay of UK power generation, picking up around 20 per cent of the UK’s demand so ongoing safety issues at Hunterston B, and with other plants of a similar age, have been most unwelcome for all concerned. There are even calls for the nuclear reactor’s permanent shutdown due to cracks in the graphite core of the structure.