Energy prices continue to reach record-breaking highs, and industry sectors around the world have been forced to prepare for high prices. Individuals around the country have been forced into energy poverty, and many businesses are teetering on the edge. As a result, businesses are desperately trying to regain control of their energy bills.
Last month our EIC experts, John Palmer (Director of Flexible Procurement) and John Dawson (Energy Trade and Market Intelligence Manager) spoke with Sumit Bose from Future Net Zero. They discussed the current events shaping the energy procurement landscape and tips on how to protect your business in a volatile market.
So, what are the best ways to future-proof your business against rising energy prices?
What can you do now?
Before you look into procurement or switching to a different contract, you should first assess your business’s current situation and how it can be improved. For example, are there any areas of your business that can reduce consumption? Can you generate your own energy on-site?
By not prioritising areas such as accurate data and energy billing management, businesses could face substantially higher, and unnecessary costs. While checking for invoice inaccuracies is essential in being efficient and financial savings, many customers simply do not have the time or resources to spot and resolve errors.
EIC expert John Palmer also pointed out that accurate billing is essential. ‘Another thing to look at is invoicing – are you actually being invoiced correctly for your energy?’ he said. ‘It’s amazing how often you find there are problems with energy invoicing, and certainly our bill validation team have found quite significant cost savings as a result of invoicing errors that have been discovered.’
At EIC, our data solutions and intelligent bureau team provide full invoice checking and bill validation for clients. Each month, we will provide you with a full analysis of your bills. Highlighting any errors, along with the actions we have taken with your energy supplier to resolve these errors. Get in touch to find out more about our bill validation services.
Buy smart
With another year of triads ahead, businesses have the choice to be flexible. Planning for long-term costs and budget forecasting is advisable, particularly when considering aspects such as onsite generation and the payback for energy efficiency projects. However, it can be hard to calculate various rates and charges in relation to a business’s specific budget.
John Dawson spoke about this topic in our recent webinar. He explained: ‘Long-term forecast reports are something that EIC can provide. Also looking at whether you can benefit from asset optimisation and demand-side response schemes, again if you’ve got that ability to be flexible with your demand then you might well be able to save some money or even make an income from those kinds of schemes.’
Accurate budgeting forecasting is especially helpful during these times, where volatile energy markets are very apparent. By building up a realistic and sustainable budget cost, businesses are able to plan further ahead and develop their future strategies more efficiently.
Decide on fixed or flexible
Deciding between a fixed or flexible contract can be difficult. It is advisable to weigh up your desire for certainty, versus the option of flexibility when procuring energy in the fluctuating markets. While a fixed contract works better for a business that wants certainty that their rates will not falter, flexible contracts allow businesses with significant costs to warrant a more sophisticated solution – giving them more fluidity.
Understanding what kind of contract, on what terms, and the timescale are all very important considerations for a business. At EIC, our dedicated energy procurement support team are on hand to manage your utility supplier relationships and ensure accurate and timely consumption data. On which you can base your contract decisions.
John Palmer went on to say that ‘in terms of the way you procure, it’s got to be right for your organisation. If you need absolute budget certainty, a fixed contract probably still is the way to go – it’s about timing when you actually fix that contract. If you’re looking at flexible contracts it’s about understanding what you’re trying to achieve with that contract and getting the right risk management strategy to give you the best opportunity to get what you need out of it.’
Where does EIC come in?
Reducing your energy consumption is a simple and effective solution to reducing costs – if you know how. Finding simple ways around constantly rising prices can often be confusing and time-consuming. But it doesn’t have to be.
At EIC, our goal is to help companies navigate the best routes for themselves and their business plan. We recognise that while there are many reasons as to why energy prices are rising, we can help our clients return their business strategies to normal.
We have a range of guides on topics such as procurement, energy management, fixed and flexible contracts, and many others that can help you to kickstart your journey to a more efficient and cost-effective future. Get in touch today to find out more.
