Energy procurement is essentially the acquisition and sourcing of the necessary energy
Contracts that would best suit your company’s specific needs. Whether you utilise energy procurement in-house throughout your operations or outsource it to a third-party professional, the basic goals and objectives remain unchanged: find the most cost-effective energy contracts for your company, while still taking into consideration the possible future demands as well. Energy procurement does not only revolve around natural gas contracts but also encompasses developments such as the development of renewable sources of energy (read wind and solar) and advanced energy technologies such as energy automation and microelectronics. The challenge then is how to find the most cost-effective supplier, whilst still ensuring that the technology and services being offered are highly beneficial to your company?
With advancements in technology and the discovery of more efficient manufacturing processes, businesses are increasingly looking at ways of reducing their energy consumption both within operations and to the overall bottom line. By reducing operating costs through the use of green technology and efficient machines, businesses can not only help save the planet but can also improve the quality of service that they offer their customers. As consumers, we want our businesses to show us that they are doing everything in their power to reduce their environmental impact whilst still providing a high standard of customer service.
What departments within your company require the most energy procurement from you?
This leads into the next step – ensuring that you have a sound energy procurement process in place. The first step is a comprehensive analysis of where you are currently at, so that you know where you need to go next. This may be dictated by the size of your operation, the number of employees, the number of contractors you employ, or it may be some other identifying factor. It is important to identify where your current weaknesses lie and work towards improving these as you can then develop a strategy to strengthen your position.
Once you have identified the current areas of strength within your organisation then it is necessary to determine what you can do to strengthen your position in the market. Some departments within your organisation may already have in place procurement strategies in place, such as purchasing and supply chain management or supplier relationship management systems, so this should not need reviewing. For others’ energy procurement may be a relatively new area of activity, so again it may be necessary for you to conduct an assessment to identify the best possible supplier to partner with. This assessment should be comprehensive, listing all of the areas of weakness as well as any areas of strength.
required experience or the latest technology to offer you the best possible energy procurement solutions
The final step is to establish whether you need specialist suppliers or not. In many cases you will find that there are several suppliers of energy procurement services already in operation within your industry sector. These suppliers typically operate as part of a network of suppliers who offer a range of products and services to the energy industry. Because they operate as part of a larger company, they are able to offer better pricing on certain products and can get the job done faster than you as an individual. It is worth remembering however that not all suppliers are equal when it comes to delivering a sound energy procurement plan. There are some companies that offer energy efficiency deals at the lowest prices, but these companies may not have the required experience or the latest technology to offer you the best possible energy procurement solutions.
If you are a small business you may be struggling to meet the cost of energy contracts, especially if you have just started out. As you look at your options for energy procurement, you should think about whether it makes more sense to seek a professional supplier and engage them on a contract based programme. Contract based programmes allow you to pay a fixed amount over a set period of time for a guaranteed minimum amount of energy procurement, along with routine maintenance and service checks. This is usually less expensive than employing a supplier on an on-going basis.