Soaring energy prices, concerns about maintaining production levels, warnings from managers and elected officials... Despite tariff shields introduced by governments (mainly aimed at small and very small businesses), energy bills are at the top of managers' lists of concerns. Faced with soaring and volatile prices, controlling costs now goes beyond the CSR commitment of managers to become a vital element of risk management at the heart of companies' business strategies.
In this context, one of the key moments for companies is the renewal of their electricity or gas contract. In addition to reducing energy consumption, budget control requires a finely tuned purchasing process. During this process, the call for tenders is a key stage. For buyers and CFOs, energy management and optimization tools allow them to prepare the consultation in the best possible way, and then to compare the offers. In this article, we look more closely at how to put yourself in the strongest position.
Tenders: Your Supplier Also Needs Your Energy Performance Data
First of all, it should be remembered that the energy market today is uncertain and that it is complex for an energy supplier to commit to a fixed price. Of course, the fixed price is the most secure for a public or private manager. But the risk incurred by the supplier is too great and leads him to no longer meet this requirement.
With a variable price contract in mind, how can buyers best negotiate an energy contract? The answer: by reducing the supplier's risk.
One way to do this is for the company itself to take responsibility for the price on the energy market. The calculation formula with the supplier can be negotiated, but in this case it is the client company itself that assumes the risk of variations by taking positions. For large, high-consumption, multi-site and multi-energy companies, or for energy-intensive industrial companies, this choice may be appropriate. In addition to securing their energy supplier for the duration of the contract, this solution allows them to remain in control by managing their purchases and the supplier's margin.
"THE CLEARER THE SUPPLIER'S VISION OF THE FUTURE CUSTOMER, THE BETTER THE OFFER."
In all circumstances, the challenge is to reduce the risk for the energy supplier and the key to reassurance is always to know one's own profile as well as possible, in order to be able to provide the future supplier with as much information as possible. The clearer the supplier's vision of his future customer, the better their offer will be.
In order to adapt the production in the best possible way, the future supplier needs to know more than just the number of gigawatt-hours the company consumes annually. They want to know how reliable the consumption is, how it will evolve over time, and how it is distributed between peak and off-peak hours. The more a consumer knows and analyses their energy costs, the more secure he is for a supplier.
In this perspective, the buyer will communicate to the candidate supplier their quarter-hourly statements, information to which only the historical supplier has access at the time of the consultation. Over a typical year and with all the details that an energy management system can provide: sub-meters, type of consumption, etc. Suppliers will then have the maximum amount of information to best prepare their response and secure their market balance (see box).
Let's go further: If the company has an energy saving action plan, it is able to describe to the candidate suppliers its future consumption and how it will be affected by the planned measures. This anticipation, resulting from the use of an energy optimization solution and supplemented by forecast industrial information (opening of new sites, changes in the pace or type of production, etc.) will enlighten the supplier, helping it to build its offer.
Comparing the Offers: With or Without Energy Software?
Once the answers are received, the comparison has to be made. But without the help of an energy management system, this is a difficult task. Each supplier has its own way of presenting its offer, its own calculation formulas, according to peak and off-peak hours, sometimes with disguised taxes. Around the price per MWh, the comparison can become a headache. An Energy Management and Optimization System (EMOS) supports the buyer or CFO, helping them to compare and visualize future budgetary impacts, to manage their energy optimization. With the formulas received from the suppliers consulted, the tool analyzes and highlights the most interesting offers. All that remains to be done is to measure the impact on the annual energy bill, and to deduce, site by site, the distribution of costs and potential increases or savings.
Market Balance, Shift Work and Supplier Responsibility
While the opening of the energy market has seen an increase in the number of alternative suppliers, the management of the distribution network has remained in the hands of the major distributors. Therefore, the distributor must, at each moment, provide enough energy to the network by adjusting supply and demand: this is the market balance. In this context, information from the quarter-hourly schedule is essential. Regardless of the contract between the consumer and the energy supplier, the supplier is always responsible for the balance: it is up to the supplier to call the distributor for the right amount of energy at the right time.
Managing Energy on a Daily Basis Means Better Control of Risks
After the optimization of the purchasing process and the choice of the energy supplier comes the time for daily energy management. Detailed knowledge of energy consumption and costs per location, per hour, per type of power, per type of consumption is a must. The more companies evolve in a complex environment (multi-site, multi-fluid), the more knowledge enables intelligent action.
Energy management software allows for the tracking of contract performance:
Integration of invoices directly on the platform,
Invoice management: monitoring of contract execution, taxes, and delivery,
Help in deciding which position to take on the market and in tracking clicks.
As a reminder, here is a summary of the features provided by an advanced Energy Management System:
Data acquisition management: data collection and energy flows, centralization, access to history, guarantee in the reliability of the data and the highest security standards,
Energy performance monitoring: visualization, measurement and evaluation of energy consumption, reports required for ISO 50001 certification,
Energy insights and analysis: identification, modeling and maintenance of optimal energy consumption, detection of energy losses at an early stage,
Energy cost management: control of accounting and forecasting budgets,
Advanced energy optimizations: complex AI algorithms enable accurate real-time optimizations for complex assets,
GHG measurement: consolidation of carbon impact data, monitoring of progress on your sustainability strategy.
WHAT TO REMEMBER
Understanding the energy supplier's need for security is key to preparing the tender. This is so that the uncertainty of the customer's consumption does not add to the instability of the energy market! The quality of digital energy optimization systems is an adequate response to the current context of energy related tensions. Whatever the type of contract, the accuracy of the data provided in a typical year but also in N+1 will optimize the answers. And the company will have all the chances on its side to obtain the best contract, for several years. An energy management and optimization system will also serve the company's energy monitoring over the long term. The accuracy of the data, their reliability and the intelligence of the dashboards are all facilitators for good daily decision-making and good relations with the energy supplier...
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