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Flexible Purchasing

The increase in media and social awareness allows the customer to ask whether their tariff matches their needs…

As media and social awareness increases, energy prices are placed under the microscope resulting in customers actively asking brokers and suppliers alike if they are on the correct tariff, and if that tariff is the most competitive for their needs. This increased awareness has also resulted in clients looking at the way they purchase their energy, with clients now turning towards a more flexible way of purchasing which puts the emphasis more so on the broker or supplier to inform them about market fluctuations, changes within the industry and ultimately, at what state the market is in, and if they would be better or worse off if they purchased at that time.

Traditionally, energy contracts are acquired through one transaction, whereby the market rate at that time is taken; resulting in a p/kwh value for the specified duration that the client requires from 12 – 60 Months. However, with Flexible Purchasing your energy consumption can be broken down in a way that the customer can purchase different percentages at any time. These multiple purchasing decisions can be tailored to suit your needs from Monthly, Quarterly or Seasonal acquisitions or to clip sizes that enable you to maximise flexibility and facilitate any strategies you may have.

Flexible Purchasing chart 1
If we take a look at the above graph, which charts the course of Electricity (Front Month) prices since December 2015, with the right purchasing platform the client would be able to purchase their energy at a time where there is a dip in the market, allowing them to take advantage of the low commodity cost. By purchasing in this way, the client can look to reduce their Annual Spend, however, the market does not always go downwards and externalilties can heavily influence market direction in a matter of seconds; therefore if purchased incorrectly or not purchased at all, customers may see their spends increase.

That is where regular dialouge between the Customer, Broker and Supplier is key. If the customer is informed correctly and a platform of honesty and trust is created between all parties, clients can really see a difference to their energy spend. Flexible Purchasing is just that, there are various products available within that field that can place as much emphasis on the Broker/Supplier as you desire or put you, the customer, at the heart of any decisions. Triggers can be set, whereby once the market reaches a certain level a % of your yearly usage, energy can be brought or you can even pre-purchase a % of your yearly usage at a fixed rate and float the remainder until there is a dip in the market.

Flexible Purchasing chart 2
There are many more options available that can help you to reduce your spend, so to learn more please contact one of our experts………

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Topics of Interest:

Energy Industry Update P272
Removal of CCL Exemptions
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