Energy Procurement UK: Tendering, Strategy & Cost Savings

Business Energy Procurement and Tendering | Telnergy

What is business energy procurement?

Business energy procurement is the process of going to the open market to find the most competitive gas and electricity contracts for your commercial premises. Rather than accepting a renewal quote from your current supplier, a properly run procurement process tenders the whole market, compares like-for-like offers, and negotiates the best available deal — typically saving UK businesses an average of 18% against the renewal price.

Why Your Renewal Quote Is Rarely Your Best Option

Every year, millions of UK business energy contracts come up for renewal. And every year, a significant proportion of those businesses accept the renewal quote their current supplier sends them — often because arranging a comparison feels complicated, or because the letter arrives close to the renewal date and there seems to be no time to shop around.

The renewal quote is, by design, not the supplier’s best price. It is the price the supplier believes you will accept without pushing back. The supplier knows your consumption history, knows you have administrative inertia on your side, and knows that the effort of switching feels like friction. The renewal quote prices all of that in.

The only reliable way to know whether you are paying the right price for business energy is to test it against the open market. That is what energy procurement does.

According to Ofgem’s business retail market data, a meaningful proportion of UK SMEs remain on expired or rolling contracts at any given time — a situation that costs them materially more per unit than comparable fixed-term deals.¹ For a business consuming 200,000 kWh of gas per year, the difference between a competitive fixed-term rate and an out-of-contract rate can be several thousand pounds annually.

Telnergy’s average saving against a supplier’s renewal quote — across its full client base — is 18%. That saving is achieved not through any particular market insight, but simply through the act of properly tendering the market: presenting the full commercial opportunity to multiple competing suppliers simultaneously and letting them price to win.

How Business Energy Tendering Works: The Telnergy Process

Telnergy’s procurement process has been refined over 24 years of working with UK SMEs. It is designed to be as straightforward as possible for the business owner or finance director while being rigorous enough to extract genuinely competitive pricing from the supplier market.

Step 1: Initial Consultation

The process begins with a brief conversation — typically 15–20 minutes — to understand your business, your premises, your current energy situation, and your priorities. Are you focused purely on cost? Do you want a green tariff? Do you have multiple sites? Are there any existing contracts that are mid-term? This shapes how the tender is structured.

There is no commitment required at this stage. The consultation is free.

Step 2: Letter of Authority (LOA)

To tender the market on your behalf, Telnergy needs your authorisation to access your energy account data from current suppliers. You sign a Letter of Authority — a standard, widely used document in the business energy market — which allows Telnergy to request your consumption data, meter details, and current contract terms from your supplier.

Telnergy’s LOA process is TPI Code compliant.² The TPI Code is the industry’s voluntary code of practice for third-party intermediaries, covering conduct standards, fee disclosure, and data handling. Telnergy discloses all commissions in writing before any contract is recommended.

The LOA does not commit you to switching. It simply allows the procurement process to proceed with accurate data.

Step 3: Data Gathering and Validation

Telnergy uses the LOA to collect your half-hourly or annual consumption data, meter point reference numbers (MPRNs for electricity, M-numbers for gas), current contract end dates, and any relevant account history. If you have multiple sites, this covers the full portfolio.

This data is validated before going to tender to ensure supplier quotes are based on accurate consumption figures — inaccurate data leads to quotes that cannot be honoured at contract, which wastes everyone’s time.

Step 4: Market Tender to 21+ Suppliers

With your data validated, Telnergy goes to market. The full tender — your consumption profile, contract requirements, start date preferences, and any green or other specifications — is submitted simultaneously to Telnergy’s panel of 21 or more business energy suppliers.

This is the step that most distinguishes a properly run procurement process from accepting a renewal quote. Twenty-one suppliers competing for your contract, simultaneously, under commercial pressure to win, produces pricing that a bilateral negotiation with a single supplier simply cannot replicate.

Suppliers on Telnergy’s panel include the UK’s major business energy retailers alongside a range of independent and specialist suppliers. The panel is regularly reviewed to ensure it remains representative of the competitive market.

Results are typically returned within 24 hours.

Step 5: Comparison and Independent Recommendation

Telnergy compiles the supplier responses into a clear, like-for-like comparison. This is not a raw list of quotes — it is an analysed comparison that accounts for:

Unit rates (pence per kWh for gas and electricity)
Standing charges
Contract length and renewal terms
Auto-renewal and exit provisions
Supplier financial stability and customer service track record
Any additional products or services included

Telnergy then makes an independent recommendation based on your stated priorities and the merits of the offers received. You receive the full comparison and the recommendation together, with the reasoning explained.

Telnergy’s commission — paid by the winning supplier — is disclosed at this stage in full, before you make any decision. This is a TPI Code requirement and a non-negotiable part of how Telnergy operates.

Step 6: Contract Acceptance and Switching Support

If you are satisfied with the recommended offer, Telnergy manages the contract acceptance process. This includes liaising with the new supplier to confirm the contract, co-ordinating with your incumbent supplier on the switch date, handling any objections raised by the incumbent, and confirming go-live meter readings.

For businesses with multiple sites, this switching support is a significant undertaking. Telnergy manages the full process, keeping you informed at each stage.

Step 7: Renewal Calendar and Ongoing Management

Once your contract is in place, Telnergy records the end date and builds it into a renewal calendar. You will be notified 6–12 months ahead of renewal — giving adequate time to run a proper procurement process again, rather than rushing to accept whatever the supplier offers in a 30-day window.

This ongoing management is included as part of the service at no additional charge.

Transparent Fees: How Telnergy Is Paid

Telnergy’s fee is agreed with each client upfront. It can be paid directly, or via the winning energy supplier as commission embedded in the contract rate. This fee is:

Disclosed in full to the client before any contract decision is made
Payable directly or via the supplier, whichever suits the client
Consistent regardless of which supplier is recommended (Telnergy does not earn more by recommending one supplier over another)

This fee structure has been Telnergy’s model for 24 years. It aligns the firm’s commercial incentive with the client’s outcome: Telnergy only earns a commission if a contract is placed, which only happens if the deal on offer is competitive enough for the client to accept.

This model works because Telnergy operates at scale — tendering a high volume of contracts across its client base — and because the supplier market is willing to pay for access to well-organised commercial opportunities. A business approaching a supplier directly is less commercially valuable to that supplier than a well-packaged, data-verified contract opportunity presented by a high-volume TPI.

TPI Code Compliance and Dispute Resolution Ombudsman Membership

The business energy market is not regulated in the same way as retail financial products. However, the TPI Code of Practice sets out a voluntary but widely adopted framework of conduct standards for third-party intermediaries.² Telnergy is TPI Code compliant, which means:

All commissions are disclosed in writing before a contract decision
Clients are not locked into any agreement to use Telnergy’s services
Data is handled in accordance with applicable law
A complaints process is in place

Telnergy is also a member of the Dispute Resolution Ombudsman (formerly the Energy Ombudsman) scheme.³ This means that if a dispute between Telnergy and a client cannot be resolved internally, the client has access to an independent, free-to-use escalation service. Ombudsman membership is not universal among energy consultants and brokers; it provides a meaningful additional assurance.

The Competition and Markets Authority’s 2016 Energy Market Investigation highlighted concerns about transparency in the business energy broker market, and subsequent regulatory activity has continued to place pressure on non-disclosure practices.⁴ Choosing a TPI Code compliant, Ombudsman-member consultant is the simplest way to protect yourself from the risks of undisclosed or mis-represented commissions.

What Does 18% Saving Mean in Practice?

Telnergy’s average saving of 18% against a supplier renewal quote is a portfolio average. Individual outcomes vary depending on the sector, consumption profile, current contract terms, and market conditions at the time of tendering. To illustrate what the saving means in concrete terms:

Hotel, Single Site: £6,435 Per Year

A hotel client approached Telnergy after receiving a renewal quote from their incumbent electricity supplier. The quote implied a 12% increase on the previous year’s contract rate. Telnergy tendered the market and secured a contract with a competing supplier at a unit rate 14% below the renewal quote — saving £6,435 per year on electricity alone.

School: £8,200 Per Year

An independent school that had historically renewed with the same supplier on the basis of familiarity engaged Telnergy ahead of a dual-fuel (gas and electricity) renewal. The market tender produced savings of £8,200 per year across both fuels against the school’s existing supplier’s renewal proposals.

Restaurant Group, 14 Sites: £14,000 Per Year

A restaurant group with a 14-site portfolio — some sites on competitive contracts, others on rollover rates — was audited and tendered as a unified portfolio. The consolidated deal saved £14,000 per year and aligned all site contract end dates, eliminating the risk of individual sites rolling over.

These are not best-case outcomes chosen for marketing purposes. They are representative of the savings achievable through a properly run market tender by a consultant with a well-stocked supplier panel and 24 years of procurement experience.

Gas: £38 Per Day Average Saving

On business gas contracts specifically, Telnergy’s clients save an average of £38 per day — approximately £13,870 per year — compared to what they were paying before engaging the firm. This figure reflects the particular inefficiency of the business gas market: gas contracts are renewed less frequently than electricity contracts, suppliers face less competitive pressure at renewal, and the incremental cost of not shopping around accumulates quietly.

For businesses with significant gas consumption — commercial kitchens, manufacturers with process heat, care homes, hotels with high hot water demand — gas procurement is often the higher-priority component of an energy review.

Energy Procurement for Multi-Site Businesses

The procurement process described above applies equally to single-site and multi-site businesses. For operators with multiple premises, portfolio tendering — presenting the full estate to suppliers as a single commercial opportunity — delivers additional benefits over and above competitive unit rates:

Volume aggregation unlocks better pricing than any single site could achieve
Aligned contract end dates eliminate the rollover risk that affects mixed-maturity portfolios
A single supplier relationship simplifies billing, reporting, and dispute resolution
Consolidated switching support is managed entirely by Telnergy

Telnergy’s portfolio clients range from 9 to 99+ locations. See Multi-Site Procurement Consolidation for more detail on the portfolio procurement process.

When Is the Right Time to Start an Energy Procurement Process?

The answer is: earlier than most businesses think.

A well-run procurement process — from initial consultation to contract in place — takes 4–8 weeks. To avoid any risk of rolling onto out-of-contract rates, you should have your new contract in place before your current contract expires. Working back from that, the ideal time to begin the procurement process is 3–6 months before your contract end date.

If your contract end date is less than 12 months away and you have not yet begun the process, start now. If your contract has already expired and you are on a rollover rate, the priority is even higher — every day on an out-of-contract rate is money that cannot be recovered.

If you are not sure when your contract ends, Telnergy can find out as part of the initial LOA process. Many businesses do not have this information readily to hand.

See Understanding Rolling Energy Contracts for more on the risks and costs of contract rollovers.

Scenarios: Energy Procurement Across Business Types

Pub or Restaurant (Single Site)

A single pub or restaurant on a dual-fuel contract will typically spend £15,000–£60,000 per year on energy depending on size, location, and operating hours. A competitive tender with 21+ suppliers is very likely to produce a saving against the incumbent’s renewal quote. The whole process requires no more than 30–40 minutes of your time.

Office-Based Professional Services Firm

Electricity dominates the bill; gas is typically a modest component. Competitive tendering of electricity at renewal almost always produces a better rate than auto-renewal or accepting the incumbent’s offer. A REGO-backed green tariff is often available at little or no premium and supports sustainability credentials.

Manufacturer or Distributor

High consumption, predictable profile, and relatively high unit costs make manufacturers strong candidates for competitive procurement. Gas contracts for process heat deserve particular attention. Multi-year fixed-price contracts can provide budget certainty as well as competitive rates.

NHS-Contracted Care Home or Healthcare Provider

Care homes have predictable, high energy use and limited capacity to manage energy procurement internally. The consequences of a billing dispute or unexpected rate increase are felt directly in staffing budgets. Competitive procurement and the availability of mediation support are both relevant.

Academy Trust or School Group

Schools typically have favourable consumption profiles for tendering — predictable, daytime-heavy, with good metering data. A portfolio approach across an academy trust’s campuses is well-suited to volume aggregation. See also the Multi-Site Procurement Consolidation page.

Frequently Asked Questions

How much does Telnergy charge for energy procurement?

Telnergy’s fee for the full procurement service — consultation, LOA, data gathering, market tender, comparison, recommendation, and switching support — is agreed upfront and disclosed in writing before any contract decision. It can be paid directly or via the winning supplier.

How is Telnergy different from going direct to a supplier?

Going direct to a supplier means negotiating with one party, from a position of limited information about what the rest of the market is offering. Telnergy tenders 21+ suppliers simultaneously, producing competitive pricing that a bilateral negotiation cannot replicate. The process also includes data validation, contract term review, and post-switch support — none of which a supplier’s sales team will provide.

How long does the process take from start to contract in place?

From signed LOA to contract accepted is typically 3–5 working days. The switching process — transferring supply from the incumbent to the new supplier — then takes 4–8 weeks. Total time from initial enquiry to supply going live with the new supplier is usually 6–10 weeks.

What if I am already in a fixed-term contract?

Telnergy can begin the procurement process for a forward contract commencing at your existing contract’s end date. Starting 3–6 months ahead of the end date is ideal. If your contract has early termination provisions that make switching before the end date commercially viable, Telnergy will advise on this as part of the comparison process.

Does Telnergy only work with large businesses?

No. Telnergy works with UK SMEs of all sizes. The minimum consumption threshold for the tendering service is modest — broadly, any business spending more than £5,000 per year on energy will benefit from competitive procurement. Multi-site businesses with portfolios of 9–99+ locations receive additional specialist portfolio management services.

What if I have a dispute with my current supplier?

Telnergy offers an energy mediation service for billing disputes and supplier complaints, separate from the procurement service. As an Dispute Resolution Ombudsman member, Telnergy can also escalate unresolved disputes through the Ombudsman’s formal process. See Energy Mediation for details.

Start Your Energy Tender Today

If your business energy contract is due for renewal — or if you are already on a rollover rate — Telnergy can tender the market and deliver a competitive comparison within 24 hours of going live.

Fee agreed upfront, full disclosure in writing
21+ suppliers tendered per contract
Average 18% saving vs renewal quote
£38/day average gas saving
TPI Code compliant, Dispute Resolution Ombudsman member
Serving UK businesses for 24 years

Request a market tender or explore multi-site procurement consolidation and energy mediation for additional support services.

Ofgem, Business Retail Market Monitoring Report, Q4 2024. Available at ofgem.gov.uk. ↩
TPI Code of Practice, Standards for Third-Party Intermediaries in the Business Energy Market, Energy UK, 2023. Available at tpi-code.org.uk. ↩ ↩²
Energy Ombudsman, Business Energy Complaints Service. Available at energyombudsman.org. ↩
Competition and Markets Authority, Energy Market Investigation: Final Report, June 2016. Available at gov.uk/cma. ↩

Telnergy Limited is an independent commercial energy consultancy established in 2002, based in Christchurch, Dorset. Ofgem registered TPI · ADR Ref E3561 · CRN 04576876.