Energy market rises and falls: making it work for your business

It’s a jungle out there. The energy market rightly holds a reputation for complexity, but it’s not something you should be afraid of.

There are hidden dangers around every corner, but equally there are bountiful opportunities  to score a satisfying win just as often. Understanding some of the basics could help you take advantage and boost your business’ bottom line.

Here are three top tips to help you make Barrie in finance your biggest fan:

1. It’s a moving feast – keep an eye on it.

The market changes on a daily basis (see fig A). A good price today could be a great price tomorrow. There are so many factors involved in the price. Politics, environmentalism, infrastructure, transport, oil production and the weather to name but a few.

Look at the price of energy over the last 12 months – is it a good price right now? Is it likely to increase ahead of your renewal date? Now could be the perfect time to renegotiate.

2. Find a balance to attain the right contract length for you.

Shorter sounds attractive because you can switch more frequently, but this isn’t always beneficial. If you lock in a great price for three years and energy prices soar, you’ve protected for the duration of the contract.

Why not take a contract out for as long as possible, then? Five years would be even better by this logic. Not exactly. Take a look at fig. A below. This shows the gas market over the last six weeks. The three-year contract price has been the best every day. This is because once you start to look beyond three year deals, the retailer has to build in some level of protection for itself. It’s very likely that the gas price in five years will be more than it is now. So you won’t get a discounted rate for it. However, depending on your organisation’s attitude to risk, buying at this higher price could still prove fruitful if prices skyrocket after you’ve signed.

Fig. A

3. Act decisively.

If the market is the lowest it has been all year and is expected to increase from this point, it’s a great time to renegotiate your energy contract. Remember, you can negotiate your contract to start at the end of your current one automatically, even if you haven’t had your renewal. Being pro-active and decisive, based on solid information, can be the difference between the winners and losers in the energy market.

If you want to know more about how you can reduce your energy costs, feel free to contact Great Annual Savings Group for some no-obligation advice or pricing from one of our experts. We’ve helped businesses save millions this year alone across a range of different areas of expense.

How much could we save you?

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Paul JohnsonGroup Financial Director

Paul Johnson is very much a home-grown talent.

He joined Great Annual Savings Group in its infancy, fresh from a youth career as a professional footballer with Hartlepool United.  He quickly established a reputation within the business and aced all required accountancy qualifications in the space of four years to become the Group’s Management Accountant.

Several successful projects later, Paul was promoted to Head of Finance.  When the former FD left GAS, he took on the mantle of the business’ most senior finance professional; boasting a string of incredible achievements all under the age of 30.

Quote:

“I have witnessed phenomenal growth at the Group over the many years I’ve worked here and I’m looking forward to guiding the Group into an exciting new chapter.”

Interesting fact:

Paul made his professional debut for Hartlepool United against Bournemouth in the Football League.  Some say Danny Ings still resides in his pocket to this day.