# Key Stages to Solving Procurement Challenges within the Energy Market

- Link: https://imserv.com/news-and-events/key-stages-to-solving-procurement-challenges-within-the-energy-market/
- Published: 2019-10-01T17:49:13+00:00

### With so much change taking place within the energy market, it is important that those working in procurement understand the challenges that the energy market is facing. For energy procurement managers pressure to find the best deal is a key factor. Having a clearer picture of an organisation’s energy requirements puts procurers in a better position to make informed decisions and meet cost reduction and sustainability targets.

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The energy market is undergoing change at an alarming rate due to increased competition
and updates to industry legislation, and often the procurement team is responsible
for keeping up to date. These teams have to work with energy buyers and account 
managers within the energy companies, stay abreast of industry amendments and understand
the risks and opportunities that these changes bring. All whilst maintaining an 
effective procurement strategy which is flexible to take advantage of any fluctuations
of energy costs.

Jason Taylor, Account Manager at IMSERV, thinks these risks can be mitigated through
the combination of a proactive approach to buying energy, an understanding of the
shifts within the energy market and full understanding of an organisation’s energy
usage. He believes such tactics can prevent poor procurement decisions turning into
expensive mistakes. “The energy market can seem daunting, particularly in light 
of ongoing legislation changes such as P272 and the Capacity Market evolution. The
landscape of the energy market has also changed significantly, with new suppliers
entering the market and a wider range of solar, renewable and local generation options
available. Taylor states “By having a greater understanding of their energy portfolio,
companies are able to implement a robust procurement strategy and able to improve
their billing.”

**Jason believes there are 5 key areas procurers need to understand in order to 
provide an effective service:**

 1. **Site list** – Although it might sound like a basic piece of advice, the first
    thing a procurer needs to have is a firm grasp of their site list. It is important
    to understand the individual energy requirements of the different types of buildings
    and sites in your portfolio so you can obtain precise volumes of energy, minimising
    wastage.
 2. **AMR metering across all sites** – Understanding your energy needs can be achieved
    through the installation of automatic meter reading (AMR) technology across all
    of your managed sites. This will automatically collect consumption, diagnostic 
    and status data and transfer it to a centralised database where it can be analysed
    and interrogated.  By having this insight, informed decisions can be made.
 3. **Understand the contract and what it requires** – An energy procurement manager
    will need an understanding of what the business needs, when and in what volume.
    This will allow the manager to accurately forecast what will be needed in the future,
    and obtain the best rates to reflect the needs of business at different times of
    the day, week, month and year.
 4. **Energy spend** – It is important to retain a view on your overall energy budget
    whilst understanding the energy spend across all utilities. Having a robust data
    solution in place, your organisation can gain a better understanding of energy 
    demands over time. This will help to benchmark any future savings across your portfolio.
 5. **Drill down into your energy data for further opportunities** – There are a huge
    variety of energy solutions available to organisations on the market such as; Sub
    Metering, bespoke energy reporting packages and energy efficiency offerings. Being
    aware of and utilising a wide range of solutions can open doors to energy improvements,
    by providing actionable usage insights at more localised levels.

Jason continues: “Those working in procurement are often under many disparate pressures
and can be involved in an array of different areas, including: purchasing, IT, managing
inventory, vendor selection and holding process reviews. This often means that they
find themselves without the time to interrogate their energy data properly. This
is where mistakes can start to come into the equation. By taking the time to understand
the energy usage data, and how this will affect such strategies, procurers will 
be able to improve their energy billing, often saving money at the same time.”