Procurement, Risk & Trading
Our procurement team are experts at creating bespoke strategies that fit in with any business structure and align with an organisations’ KPI’s. We make sure that we understand your energy portfolio and overall objectives and design optimised procurement proposals that services your individual business requirements.
We have access to a vast source of company market and financial intelligence and utilise our data interpretation techniques and expertise to develop compelling risk management and trading strategies for our customers. Our team always have their eye on the market, past, present and future, ensuring the very best strategies are put in place for your business’ requirements.
Procurement: Contract Negotiation & Architecture
Detailed financial and consumption profiling provides the insights we require to negotiate contracts from a position of confidence and strength. We are one of the largest volume buyers of energy in the UK on behalf of a select profile to include a high net worth of corporate clients.
In addition to these powerful commercial levers, we place great stock in developing the long-standing relationships we have with all suppliers and encourage our customers to do the same.
Our expertise in matching and designing a bespoke contract type depending upon our clients’ risk appetite is second to none.
“Our approach to procurement and contract management is unique.”
Commercial utilities procurement
We are best known in the energy market for being the owner and operator of TECC® (The Energy Credit Consortium), which we believe is the most powerful energy procurement platform in Europe and includes some of the largest and well-known brands in the world.
“Our consortium, TECC®, provides us with the ‘purchasing power’ required to go to market on behalf of our customers”
The Logical Utilities Company launched TECC® in June 2012 due to the growing number of larger corporate enterprises becoming dis-enfranchised with more standard energy procurement ‘basket’ deals. It is a misconception that volume (or usage) is a critical factor in determining the cost of an energy contract. The science behind TECC® allows us to come back from the market with more competitive deals for our customers.
Contact one of our experts today to find out how TECC® can help your business make financial savings.
Contract types, and the best one for your business
Our Procurement Team establishes the best deals by using key pointers to develop bespoke buying strategies before going to the market. By ensuring we know your business as well as you do, we are able to go to market with confidence and create contracts based on your business’s key performance indicators.
Fixed
contract types
Fixed contracts provide stable, simplistic costing strategies and budgets can be consistently assured with your monthly bill consisting of the same yield each month.
However, there are many downfalls of fixing a contract. They often work out very expensive due to suppliers benchmarking at a higher rate across a fixed period of time. You’ll only have one opportunity to buy your energy at the start of the contract; you will not be able to benefit from any reduction in wholesale cost during the duration of your contract.
Fixed contracts are suitable if you have a small business with a single meter and are looking for a secure budgeting strategy to fall in-line with your business’s KPI’s.
Hybrid
contract types
Hybrid contracts provide a combination of both fixed and flexible type contracts, typically a 50:50 split. This means you benefit from the stability of a fixed contract, as well as having the ability to buy in the remaining 50% when the market shows a decrease in wholesale movements. This can be done in advance so you’re able to take advantage of the market decreases.
Hybrid contracts do have an element of risk involved, meaning you could end up paying more if the market moves in a bullish direction.
Our in-house team of Traders and Risk Management gurus will ensure you are locking in at the right moment giving you the best prices on offer.
Hybrid contacts are more suited to SME or large corporate businesses.
Flexible
contract types
Flexible contracts provide you with complete freedom and control on purchasing your energy. With a flexible contract you don’t have to purchase all of your energy at once and you have the freedom to be selective on when you buy your energy. For example, you can purchase your energy for months in advance ignoring more current periods if we believe the immediate market will go down. Our team of Traders and Risk Management Analysts will be able to buy your energy in months, quarters or seasons, in and out of sequence, while maintaining control of your costs.
Due to the nature of a fully flexible contract, there are several risks to look at before settling with this option. For example, your monthly invoice will vary due to fluctuations in the market meaning you could end up paying more than you’ve forecast to spend.
Fully flexible contracts are suited to larger business of around 30GWh+ consumption per year.
Risk Management & Trading Strategies
Understanding the drivers behind credit and pricing decisions has a material impact on contractual terms, product exposure, and margin application. The interpretation of financial and market data varies dramatically across the entire supply chain and leads to wide variations in pricing.
The ability to interpret credit risk and payment propensity relative to preferred contract type, usage, and contract duration gives our customers significant pricing leverage and reduced exposure.
Market & Financial Intelligence
We have access to our very own extensive catalogue of company market and financial intelligence enabling us to utilise our data interpretation techniques and expertise to develop compelling risk management and trading strategies for our customers.
As thought leaders, we collaborate closely with our customers and conduct regular on-site training and focused workshops including masterclass sessions aimed at ensuring all stakeholders understand the market influences as well as we do so that even the most complex strategies can be simplified and communicated clearly.
Risk and hedging strategy development
Hedging energy prices allows us to reduce or eliminate your business’ exposure to the extremely volatile energy market. This practise allows us to fix or cap energy costs at a certain level and period of time. Rather than accessing the market all at once and being exposed to the price then on offer, we access the market continually and in effect top-up the amount of energy your business needs.
Our team of Risk Management Analysts tailor your risk and hedging strategies and evaluate which approach will work the most effectively with your business’ KPI’s, energy consumption requirements and forecasted annual spend.
Energy market risk
Energy risk management is a significant and integral part of your energy procurement tool kit because the energy market can be so unpredictable. A well-defined and perfectly executed energy risk management strategy can effectively protect your company against the whims of the energy market.
The Logical Utilities Company have an abundance of experienced staff with an extensive background in energy risk management. Our team always have their eye on the market, past, present and future, ensuring the very best strategies are put in place for your business requirements.
Your company could be using a tailor-made energy procurement strategy which fits in with your business’s KIP’s. Get in touch with us today to discuss further.
Hedging strategies
A ‘hedge’ is a simple purchasing strategy designed to best manage your exposure to price risk. Our team of risk management and trading experts proactively seek out the right time to buy in the energy market creating hedging strategies tailored to your business’s requirements. This is called ‘Advanced purchasing’, which is essentially how much energy is purchased how far in advance and is impacted by many factors. Our team will look at all of these factors and buy your energy in advance, insuring (hedging) you against potential price increases.
Market intel
Our comprehensive inventory of intelligence contains a deluge of energy industry source data that include supplier observations, insights from governing bodies and our very own in-house trading and financial intelligence.
Our team of Traders and Risk Managers collate intelligence from our inventory are provide daily, weekly and monthly insight reports that help your business keep up to date with the latest energy industry market trends and includes price evolutions during the last week or month and short-term market forecasts.
Click here to subscribe to The Logical Market Intel Reports
We are Agents of Change
Founded in 2009 we have become the UK market leaders in energy consulting and support services specialising in multi-site and large commercial business sectors. We operate in a highly fragmented market where most providers concentrate on what they do and how they do it. Our success is attributed to our focus on “why” we do what we do; we challenge the status quo in the energy market. We believe we can improve a clients’ bottom line whilst removing highly complex tasks associated with energy from within their facilities and finance departments, and we are driven by sharing in this success.
“We consider the structure of the energy market to be illogical”
We have become standard bearers for a more logical and transparent approach. Logic is applied in everything we do and remains the backbone of our success. We have attracted and grown a specialist team of ethical, and talented industry professionals motivated by achieving fantastic results for some amazing customers and pushing the boundaries of what is perceived possible.
We are Pioneers in Utilities Bureau Support Services. Make your next choice Logical.
