For businesses wanting fixed price contracts, we offer an online energy market. This involves a reverse auction tendering, whereby energy suppliers compete for our clients’ business. There’s no hiding place with this level of competition, so suppliers have to offer the very best price available on the market. Part of the process is automated, but sometimes a human has to step in. The buyer might want specific terms and conditions to be met; wholesale prices can fluctuate after the auction and other contract issues might need to be dealt with. A team of professional energy brokers and risk management experts oversee the tender process and auction to ensure the best results.
Traditional fixed price contracts aren’t for everyone. Savvy energy buyers look for more sophisticated, flexible options, which can help with risk management and hedging strategies. For our full tender service, we run an auction to find the best fixed price to use as a benchmark. Then we follow up with comparison analysis of all suitable flexible purchase contracts.
The costs of flexible purchase contracts are compared against each other and the fixed price contract costs, all fully delivered. Then fully transparent mark-to-market techniques are used. Furthermore, our custom-built online systems can compare any type of flexible purchasing contract. Even sophisticated energy buyers sometimes overlook the hidden margins and risk premiums that can be included in purchasing contract offers. We don’t.
We use Contract Reverse Engineering service to assess new clients’ existing supply contracts and offers. This involves the same methods we use to compare complex flexible purchasing contracts in our tender process. And it allows us to reverse engineer contracts to uncover hidden margins and risk premiums, which even experienced buyers can fail to spot.
The table below shows how we were able to unearth a further £1.24m in negotiable charges from a £24m flexi contract after the buyer had seemingly exhausted all his options. Contract reverse engineering software gives customers more negotiation power with suppliers in the final stages of settlement.
|Energy component||Reason for examination||Negotiable savings|
|BSUoS||Too high in comparison to other suppliers||£150,000|
|FIT||Undeclared on the contract offer||£480,000|
|Imbalance risk||Premium too high compared to industry||£57,600|
|Shape / residuals||Base load locked but not residuals||£48,000|
|Demand weighted energy||Weighted only first year but not indexed||£67,188|
|Aggregated price difference||Risk premium for 8 part STOD||£40,800|
|Spot price / risk harnessing||Using new risk management techinques||£403,128|
We are able to deliver the above tender solutions in an OJEU compliant way via our formal bespoke OJEU tender framework in line with the Public Contracts Regulations 2016. This solution not only gives control back to public organisations in regards to buying energy, it is also proven to deliver savings in terms of time and money.
The challenges were to:
Beond has gone on to deliver multiple OJEU compliant tenders while delivering real value to our clients.
Procurement for water services in Scotland
Procurement for water services in England
To find out more about any of the above services please do call us on +44 20 8634 7533 or email email@example.com.