Energy Procurement Services: How Businesses Buy Energy Properly

“Procurement” sounds grander than “getting quotes”, and it should — because done properly, it is. Buying energy for a business is a sequence of decisions, and the quote is one of the later ones. Having run procurement exercises for UK businesses since 2002, here’s the process worth paying for.

The decisions before the quote

Timing. Wholesale energy prices move daily. Businesses that wait for their renewal letter buy at whatever the market happens to be doing that fortnight. A procurement process watches the market across your renewal window — up to twelve months out — and contracts when conditions are favourable, not when the paperwork arrives.

Contract length. A 12-month deal re-exposes you to the market quickly; a 36-month deal buys certainty at a premium and is a poor purchase at a market peak. The right answer depends on your risk appetite and where the forward curve sits — a judgement call, not a default.

Fixed or flexible. Most SMEs fix everything: one price, budget certainty, done. Larger consumers (typically 1 GWh+ across sites) can buy flexibly — purchasing energy in tranches through the contract to average out market timing. Flexible buying without someone watching the market is just gambling with extra steps.

Multi-site procurement: the aggregation effect

If you operate several sites, procuring each meter separately is leaving money on the table. Aggregating your portfolio into a single negotiation:

• Gets you volume pricing a single meter can’t
• Aligns end dates so every future renewal is one exercise, not twelve
• Puts every site on one bill format — and stops the odd meter falling through the cracks onto out of contract rates, which is where multi-site portfolios most often leak money

A portfolio audit comes first, so you’re negotiating from accurate consumption data rather than the supplier’s estimates.

What negotiation actually changes

Suppliers don’t publish their best prices. The rate you’re offered depends on your consumption profile, credit position, how the deal reaches them — and who’s asking. A consultant bringing a portfolio of business to a supplier gets a different conversation than a business ringing the sales line once every three years.

Beyond price, the terms matter: notice periods (some contracts demand written termination up to 120 days out), rollover clauses, volume tolerance bands on larger contracts, and pass-through versus fully fixed non-commodity costs. The cheapest unit rate with a punitive volume tolerance clause is not the cheapest contract.

What procurement services cost

The industry norm is supplier-funded commission built into your unit rate — commonly 1–2p/kWh, and often undisclosed. Our position is different: the fee is agreed upfront, and you choose whether to pay it directly or via the supplier. Either way you see it before you sign. An undisclosed margin isn’t a free service; it’s just an invisible one.

When to start

Twelve months before contract end for large or multi-site portfolios; six months for a straightforward single-site supply. If your renewal is closer than that — or you’ve already passed it — the priority is getting off deemed rates quickly, which can usually be done within days.

If you’d like your portfolio reviewed, send us your contract end dates and a recent bill per site — we’ll map your position and set out the procurement window worth working to. Fee agreed upfront; if nothing needs doing yet, that’s what you’ll hear.

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Johnny Arthur runs Telnergy Ltd, an independent commercial energy consultancy established in 2002, working with businesses across Dorset, Hampshire and London. Ofgem registered TPI, ADR Ref E3561, CRN 04576876.