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Over the last two years we have seen energy market prices increase to unprecedented levels, impacting all energy users, domestic and commercial, across the UK and Europe. If we put this into context in late 2022 fixed price energy contracts hit delivered price highs of 100p/kWh for electricity and 30p/kWh for gas.
So, what can be done to help mitigate the budget shock that comes with such market price volatility?
A strong flexible procurement strategy is of key importance, with this acting as a vital tool to manage the price risk associated with volatile wholesale energy markets. Flexible procurement enables you to hedge market price risk by forward buying and spreading how you buy energy. LASER manages Flexible procurement ‘baskets’ within which we group together public sector volumes to achieve optimal terms and pricing.
We have now awarded the new flexible energy procurement frameworks (gas and electricity), covering the period October 2024 to September 2028 and it’s open for your public sector organisation to join.
We want to ensure that our frameworks provide the benefits that our customers value and want to experience, which is why we are consultative with our customers on what matters to them when making improvements and progressions.
Market events in 2022 demonstrated that no end user is safeguarded from rising energy prices, even with recent Government’s energy support schemes customers who had to secure Fixed-price contracts during this time experienced severe budget shock. It has never been more important to have a forward flexible procurement strategy in place for managing market price risk.
For our new flexible energy procurement framework 2024 / 2028 there are several benefits and enhancement including;
Our frameworks are compliant with Public Contract Regulations (PCR, 2015) and as you can directly access the frameworks without further competition, saving time, resource and money.
Our flexible procurement strategies have proven highly effective in helping with budget shock, with our basket prices being 50-85% lower than peak market prices seen in 2022.
We have introduced enhanced supplier Service Level Agreements (SLAs) KPI’s and Poor Performance remedies; including the ability to move you to another supplier if a supplier fails to deliver during the contract or goes bust.
From Power Purchase Agreements (PPA), supply and installation of on-site renewables or heat decarbonisation projects to sleeving in electricity from your own PPA.
We have the experience and capability to deliver customer specific trading strategies. There is a wide degree of flexibility for you to spread your sites across multiple Flexible baskets for a solution that meets your risk appetite needs.
Social value is high on our agenda and the framework suppliers have committed to delivering a pot of up to £130k per annum to spend across initiatives nominated by our customers.
Having a flexible and strategic risk managed approach is in place is critical to help you manage future price risks and budgets.
If you would like to find out more about our new flexible energy procurement framework for your organisation, please contact us using the details below to speak to one of our experts.