Five things to consider when buying energy

Procuring energy can be a long and confusing process, yet it doesn’t have to be. CPL Group outlines what schools should consider when thinking about buying their next energy contract

When should I buy?

You don’t need to wait until you are close to the end date of your existing contract. Most electricity and gas contracts can be agreed up to three years in advance of the start date and sometimes it can be done even further in advance. You have the opportunity to take time to understand the different product options available, get prices and agree your energy contract well ahead of time if your contract renewal isn’t imminent.

Why does this matter? The cost of power and gas varies over time, it is similar to the stock market and if the market is at a low point at the time you arrange your next contract it could make you significant savings. Energy prices dramatically reduced when the Covid-19 Pandemic started but they have gradually increased since the beginning of lockdown earlier this year, although they are still much lower than they were a year ago.

Beware of complex or unclear energy offers in the market

The energy market can be complicated and unclear but using the services of a good energy consultant can help to make it clear, safe and simple. The market has a range of products, some are totally fixed and others have elements which have additional costs that may not be shown on your electricity contract offer but may still be on your bill. Make sure you are clear on the product you are buying and that you have seen the terms and conditions.
    
It’s important to understand how the charges feed through to the total costs on your bill. Use a reputable consultant who will be honest, transparent and support you to get the best product for your needs. They will be able to manage all the work which is associated with procuring an energy contract such as with dealing with suppliers on queries and contracting, plus they will be able to help you avoid any pitfalls. Ultimately a good energy consultant will save you time and help you achieve value for money for your energy contract.

Make sure you are clear on any termination clauses in your existing contract

This is important because if the clauses are not adhered to you may find yourself locked into a renewal contract that you may not have chosen or want. Your energy provider will be able to help you with this and we would always advise that you are clear on any termination clauses at the point of contracting. It is worth checking the terms and conditions you are on now if you are unsure about your existing contract.

Stay informed of market trends or changes in energy regulations

Sustainability is important for all of us so review renewable energy options. Keep informed about the energy market and when prices are low it may be worth considering a renewal for your contract even if it’s not due imminently. Most importantly stay on top of regulatory change.

The UK Government have very recently put in place regulations whereby larger Multi Academy Trusts now have to report on energy usage and their carbon outputs on an annual basis. Should your MAT consume in excess of 40,000kWh of energy per annum and meet two of the three following criteria, these regulations apply to you: Income greater than £36 million; balance sheet greater than £18 million; 250 employees or more.
    
Should you meet the criteria, you will need to publish your UK energy use for gas, purchased electricity and transport fuel plus your associated greenhouse gas emissions in your annual accounts for 2019/20 and these generally have to be submitted to the ESFA by 31 December 2020 and to Companies House by 31 May 2021.
    
You are also required to publish your emissions intensity metric and calculation methodologies used plus a narrative on measures you have taken to improve energy efficiency.

There isn’t a lot of time to collate the necessary information. An energy consultant will be able to help you if you need support with this, from answering any questions to writing the report for you, helping to eliminate risk of non-compliance or missing the submission deadline.

Find a provider who will look after you and your energy needs

One of our biggest tips is to ensure you find an energy consultant who will provide you with a hands-on, bespoke service and who will look after all of your energy needs. Select a consultant who will take the extra work away from you and make your energy buying easy.

CPL Group

CPC and Tenet Education Services are not-for-profit organisations which are part of CPL Group, an education owned charity that gives back to the sector through funding and support. CPC has a complete range of framework agreements which are designed for the education sector, including a comprehensive utilities framework. The framework’s fully vetted energy consultant, UPG Ltd, will compete your gas or electricity requirements in compliance with the public sector procurement regulations and provide you with expert advice. CPC membership is free of charge to all institutions. Tenet provides procurement consultancy support.

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