Read our latest article by Caroline Beshay, our Key Account Manager, as she outlines how applying a strategic approach to procuring energy can save thousands.
How one of our key clients secured a $400,000+ saving in energy costs
The client story below highlights the benefits of applying a strategic approach and expert negotiation when procuring energy for an multi-site business who is expanding their sites.
Background
A leading food manufacturer expanded their business holdings and wanted to take a strategic approach to their greenfield site’s energy procurement. We have been their broker of choice since 2017, fully managing their energy portfolio across several sites. Our services have included procuring their electricity and gas contracts, consulting on energy efficiency practices, billing support, and site energisation and termination.
Opportunity
Our client’s greenfield site had a clear timeline to be connected so our team needed to work to tight deadlines. The scope of our project included:
- Procure competitive gas contract to ensure site energisation within tight timeframe. The gas contract needed to take into consideration ‘take or pay’ (TOP) penalties to ensure consumption flexibility, plus inclusion of site connection charges.
- Procure competitive electricity contract, again, to ensure site energisation within tight timeframe.
- Analysis of rooftop solar for the new site to reduce energy costs and carbon emissions.
- Assessment of potential LGCs and government incentives.
The Solution
Our Senior Account Manager worked closely with the client’s Project Team over 24 months to provide a comprehensive solution across electricity, gas and solar procurement and overall portfolio management:
✔️ End-to-end energy procurement – our team assessed the client’s usage profile based on required machinery and industry benchmarks, ensuring all paperwork was ready for new site connection. We then took the portfolio to market to find competitive tenders from leading retailers.
✔️ Load flexibility – The client’s final contract included a load flexibility clause, 1% minimum consumption, effectively nullifying TOP risk, and $0 upfront payment for new site connection.
✔️ Market timing – We used short-term contracting to minimise the client’s exposure to high rates, ensuring the client would be in a more favourable position for the next contract expiry.
✔️ Solar solution – Our team managed the whole solar procurement process using our dynamic solar platform, from initial assessment, requests for proposals from suppliers, arranging necessary documentation pre and post installation, and advising on Power Purchase Agreements (PPA) options to ensure positive cash flow.
SAVINGS
Our client selected a competitive offer from a leading retailer that included all the necessary clauses and requirements as outlined above, including:
- Gas: The client selected a competitive offer from a leading retailer that included all the necessary clauses and requirements as outlined above, including a load flexibility clause nullifying TOP penalty.
- Electricity: $400,000 avoided in annual costs through market timing and short-term contracting.
- Solar: Forecasted savings of over $600,000 per annum, with an average payback period of 3.5 years.
- Green Tariffs: Projected annual costs reduced by over $28,000 through accessing suitable tariffs. We also provided costs and information on LGCs, green energy options, and LPG vs natural gas, to assist our client in their carbon emission reduction target of 66% by 2025.
Take control of your energy costs today
Discuss your energy needs today with our team by filling out our contact form or calling us on (02) 9371 4153.
