Expert energy analysis and insight for UK businesses.
Facing up to the new challenges and opportunities presented by the changing energy market, many large businesses are developing more sophisticated energy strategies. Or at least as we see it, many business energy buyers are demanding more from their energy suppliers.
Bring it on, I say.
With this much change going on, it’s no surprise that standard contracts and traditional rigid procurement practices don’t cut the mustard anymore. That’s especially true for – but in no way limited to – the country’s largest energy users.
So why stick with the status quo?
Energy suppliers, this one in particular, are more than happy to look at developing new ways to address these new issues. Just take a look at these recent examples:
> We developed a completely new ten year electricity supply contract when Network Rail wanted to find a way of matching its future electricity prices to its regulated income and meet its growing demand on the back of a huge rail electrification programme.
> We worked collaboratively with Tesco to develop an innovative Pan European Framework which enabled them to simplify and harmonise the purchasing and management of their electricity requirements across their Central European businesses.
> We worked in partnership to deliver a new Power Purchase Agreement contract structure with Government Procurement Service (GPS), leveraging government’s buying power to benefit taxpayers. This has enabled GPS to purchase directly from a renewable energy producer that needed a long term buyer for their new generation project to go ahead. This supports the government’s objective to provide cheaper energy to the public sector bodies that GPS buys for, as well as supporting growth through infrastructure investment.
But there is a but.
Three conditions need to be met for a successful outcome for both the business and the energy company. Thankfully, they’re all free.
Time. Developing these deals requires a lot of thought to get them right and avoid creating a new problem as we answer the current one. That can involve modelling and testing contracts under different circumstances, working with a number of specialists in their field, changing systems, and negotiating new contractual terms. Not quick tasks.
Listening. Sometimes the way we express what we want is really more of a solution than a requirement. The thing about our own solutions is that we can be blinkered by them – even when they’re suboptimal. But careful active listening can distil the real requirement and lead to a much more suitable solution being developed.
Conversation. It’s unlikely that for a completely new requirement we’ll come up with the right answer first time. Plus there may be a number of people to get on side about whatever new approach we’re considering. So it can take a lot of dialogue to work things out properly and communicate that effectively to those that matter.
Each of the examples I listed are bespoke and, at least at the time they were signed, unique in the market. In each case we worked closely with our customer over (sometimes) many months to come up with the right answer. And in each case there was plenty of meaningful dialogue throughout the process.
If you’ve got the time for a conversation, we’ll listen and work with you to find an answer to your niche need.