The electricity market price can vary by up to 50% during the year. To ensure you maximise the market’s volatility and buy at the right time to lower your costs, it is essential you continually review risks and adjust how you purchase. This is what we call dynamic energy purchasing.
A dynamic purchasing strategy delivers a lower commodity cost by maximizing the benefit of market volatility and limiting the risk of buying when prices are artificially high.
It requires daily analysis and ongoing adjustments to deliver a price lower than the average market, and which reflects your financial and operational objectives. These can include budget considerations, expected market fluxes and demand forecasts, plus any energy you may be self-generating on-site.
Static vs dynamic purchasing
However, most consultants adopt static purchasing for their clients, where the strategy is set at the beginning of a contract and is rarely – if ever – reviewed or adjusted throughout.
Here at Noveus Energy we believe a static approach is a lost opportunity, particularly when the electricity market is twice as volatile as the FTSE 100 (as shown in the graphic).
With a dynamic approach you could reduce your energy costs by up to 10%.
With a dynamic approach, energy purchasing is constantly reviewed and adjusted. The result: greater opportunity to maximise market changes, and control and reduce costs.
Interested to find out more?
Committed to finding you savings, we’ve produced a dynamic purchasing PDF resource.
This free resource provides more detail about static vs dynamic purchasing and includes a handy comparison between the two approaches. Click to request a copy of our resource.
In summary
We believe a static approach is a lost opportunity.
With a dynamic approach to energy purchasing, you can consistently deliver savings of >10% above static models and benefit from greater flexibility.
It is essential you work with a team who understand the market, can continually review risks, adjust how you purchase and maximise the market’s volatility to buy at the right time and lower your costs. What we call dynamic purchasing.
Get in touch today to discuss dynamic purchasing.
