30-Second Overview
Energy procurement decisions have a significant impact on annual electricity and gas costs for large energy users. Securing the best outcome requires more than obtaining competitive supplier prices. The timing of the tender, contract structure and exposure to wholesale market movements are equally important.
Large energy users can choose between fixed-price, wholesale tracker and flexible purchasing contracts, each offering different levels of budget certainty and exposure to wholesale prices. Supplier pricing is typically unbundled, meaning that comparing unit rates alone won't tell you which offer is cheapest. A successful tender requires detailed cost models using the business's quarter-hour electricity consumption data or monthly gas usage data to calculate the full estimated annual cost of each offer on a like-for-like basis.
Every business has different energy requirements and priorities. Utilityfair can help you assess the available procurement options, whether your priority is reducing costs, securing budget certainty or retaining flexibility if wholesale prices change. Our team provides independent market advice to help you make the right decision for your business.
⚡ Is your business getting the best vaule from its electricity and gas contracts? Utilityfair runs competitive tenders across all suppliers, compares full annual costs and advises on fixed-price, wholesale tracker and flexible purchasing strategies. Choose an option below to discuss your energy procurement requirements with our specialist team. 👇
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Our Large Energy User team manages the entire tender process, obtaining offers from all suppliers and providing detailed, like-for-like comparisons of estimated annual costs, contract structures and terms.
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Review Your Energy Purchasing Strategy
Not sure whether to fix prices or track wholesale prices? Our team can review your existing contracts, discuss market conditions and explain the advantages and risks of fixed-price, tracker and flexible purchasing options.
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Key Considerations Before Issuing an Energy Tender
Effective energy procurement starts with a clear understanding of the business's requirements, priorities and risk appetite. Several factors influence the procurement strategy and the outcome of a competitive tender:
- Contract timing: Existing contract end dates and wholesale market conditions influence when a business should go to tender. Suppliers price fixed contracts using wholesale energy futures, including natural gas and carbon prices, and hedge their exposure when contracts are agreed. As these market prices change, supplier offers are generally valid for execution within 24 hours, making the availability of key decision-makers an important consideration.
- Contract structure and duration: Fixed-price, wholesale tracker and flexible purchasing contracts offer different levels of budget certainty and exposure to wholesale market movements. Contract terms of 12, 24 or 36 months also affect how long a business commits to a particular purchasing strategy.
- Consumption data and supplier pricing: Quarter-hour electricity consumption data or monthly gas usage data forms the basis of a detailed cost comparison. As supplier pricing is typically unbundled, cost models are required to calculate the full estimated annual cost of each offer on a like-for-like basis.
- Sites and meters: The number of locations and meters included in a tender, along with their existing contract end dates, can influence the procurement approach and opportunities to align contracts.
- Renewable energy requirements: Businesses may have different requirements for renewable electricity, ranging from supplier-backed renewable certification and Guarantees of Origin (GOs) to certificates linked to a specific local renewable asset or a Corporate Power Purchase Agreement (CPPA) with a named wind or solar farm.
Establishing these requirements before going to tender allows suppliers to price against a consistent specification and gives the business a clear basis for comparing the available options.
Understanding Your Energy Contract Options
Large energy users can choose between three main contract structures. Each offers a different balance between budget certainty, exposure to wholesale energy prices and flexibility over when energy is purchased.
Fixed-Price Contracts
A fixed-price contract allows a business to lock in the energy component of its electricity or gas price for a specified period, typically 12, 24 or 36 months. Suppliers price these contracts using wholesale energy futures prices and hedge their exposure when the contract is agreed.
This provides greater certainty over energy costs and helps businesses forecast their expenditure. However, a fixed-price contract does not guarantee that the entire bill will remain unchanged. Changes to regulated charges and taxes, such as network charges, capacity charges, the PSO Levy and VAT, are passed through without an additional supplier margin.
The main benefit is protection against increases in wholesale energy prices, with the trade-off that the agreed energy rates remain fixed if market prices subsequently fall.
Wholesale Tracker Contracts
A wholesale tracker contract links the energy component of a business's electricity or gas price to actual wholesale market prices, rather than locking in a rate based on futures at the start of the contract.
For electricity, tracker rates typically adjust monthly based on wholesale prices published by the Single Electricity Market Operator (SEMO). This provides transparent, market-based pricing and allows businesses to benefit automatically when wholesale prices fall, without waiting for their contract to expire.
Unlike fixed-price contracts, trackers do not include the same upfront price protection through supplier hedging. The trade-off is greater exposure to market volatility: energy costs can fall when wholesale prices decline but will also rise when markets increase.
Wholesale trackers can appeal to businesses that are comfortable with variable energy costs and want to retain exposure to potential improvements in wholesale market conditions.
Flexible Purchasing Contracts
A flexible energy contract allows a business to decide when and how much of its energy requirements to fix, rather than locking in the entire contract price on a single day.
The supplier provides initial contract rates calculated using a formula linked to natural gas and carbon prices. On the pricing date, the business can elect to fix a portion of its expected usage or leave it entirely unfixed. If the business makes no hedging decisions, the energy rate continues to move with the underlying wholesale market, behaving similarly to a wholesale tracker.
The business has the option to execute trades throughout the contract and lock or unlock prices in specified increments for individual months. For example, it could fix 50% of its winter energy requirements while leaving the remainder exposed to wholesale prices, fix 100% of a particular month, or lock in February's requirements while leaving March unfixed.
This allows businesses to build their hedged position over time, manage different months independently and adjust their exposure as market conditions change. The trade-off is that purchasing decisions require ongoing management, and any energy left unfixed remains exposed to wholesale price movements.
How Utilityfair Manages Your Energy Tender
Utilityfair manages energy tenders for some of Ireland's largest businesses, drawing on decades of experience in energy procurement and wholesale markets. Our team oversees the entire process, from initial preparation through to supplier comparison, contract selection and execution.
We work closely with you and your key stakeholders throughout the tender, providing independent market advice and detailed financial comparisons so you can make an informed decision. You choose your preferred supplier and contract structure, and we manage the execution.
Step 1: Understanding Your Energy Requirements
We begin by reviewing your current electricity and gas arrangements, including recent bills, contract rates, expiry dates and the locations and meters to be included in the tender.
We then discuss your procurement priorities and requirements. These include the preferred contract start date, a 12-month, 24-month or 36-month term, the choice between fixed-price, wholesale tracker and flexible purchasing contracts, and any renewable energy or sustainability requirements.
This establishes the scope of the tender and allows us to prepare a pricing request that reflects your requirements.
Step 2: Preparing the Tender
We obtain quarter-hour electricity consumption data from ESB Networks or monthly gas usage data from Gas Networks Ireland for the meters included in the tender. This allows us to prepare the detailed cost models needed to compare supplier offers against your actual consumption profile.
We then agree a tender timeline with you, including the date suppliers will provide their pricing and the deadline for executing the preferred contract.
As supplier pricing is generally valid for only 24 hours, we coordinate the timetable with you to make sure that you and your stakeholders are available to review the offers and make a decision within the pricing window. If that deadline is missed, suppliers will need to reprice their offers using the prevailing wholesale market rates.
Step 3: Issuing the Tender to All Suppliers
We prepare and issue a formal pricing request to all suppliers, setting out the agreed requirements for each site and meter.
The tender specification includes the required contract start date, duration and structure, consumption data, pricing date and any renewable energy requirements. We also provide the account holder's details, including the CRO number, so suppliers can complete their credit assessments.
Suppliers are asked to submit their offers against the same requirements and within the agreed timetable, providing a consistent basis for comparison.
Step 4: Comparing Supplier Offers and Providing Our Advice
Once supplier pricing is received, we enter each offer into our cost models, applying the relevant rates and charges to your electricity consumption profile or gas usage data.
We prepare a detailed comparison covering unit rates, estimated annual costs, differences between suppliers and contract structures, and the cost implications relative to your current contract.
We send you the full comparison alongside our recommendations and arrange an online meeting with you and your key stakeholders to discuss the results. We explain the advantages and risks of each option, answer your questions and help you assess the available offers against your procurement priorities.
Step 5: Contract Selection and Execution
You choose your preferred supplier, contract structure and duration. We then arrange the new contract and coordinate its execution with the supplier within the agreed pricing window.
Where the chosen arrangement involves hedging or price fixing, we clearly document and communicate the agreed instructions to the supplier, including the relevant volumes, periods and prices. This provides a clear record of the purchasing decisions and reduces the risk of execution errors.
Step 6: Ongoing Support and Re-Tendering
Our involvement continues after the contract is signed. We provide support with billing queries, consumption profiles, changes in energy requirements and the addition of new locations or meters.
For businesses requiring more detailed monthly reporting, we can also provide bespoke monthly consumption, carbon and sustainability reporting as an additional paid service, depending on your requirements.
We share ongoing energy market updates and engage with you well ahead of contract expiry, giving you time to review market conditions, assess your purchasing options and plan for the next contract. We then repeat the competitive tender process across all suppliers, allowing you to make your next procurement decision in good time.
Discuss Your Energy Procurement Options
Whether your existing energy contracts are approaching renewal or you're reviewing your purchasing strategy, Utilityfair can help you assess the available options.
Our Large Energy User team can review your current arrangements, discuss your requirements and advise on the most suitable timing and approach to your next electricity or gas tender.
⚡ Ready to discuss your energy procurement requirements? Click the buttons below to speak with our Large Energy User team 👇
Frequently Asked Questions (FAQs)
Preparation should begin well before your existing contract expires. This allows time to review your current arrangements, obtain consumption data, establish your requirements and agree a tender date with the relevant internal stakeholders.
The appropriate timing depends on your contract expiry date, procurement requirements and wholesale market conditions. Utilityfair can help you establish a timetable that gives you sufficient time to evaluate your options without rushing the final decision.
Supplier offers are generally valid for execution within 24 hours. Fixed-price contracts are priced using wholesale energy futures, including natural gas and carbon prices, which can change throughout the trading day.
Utilityfair agrees the tender timetable with you in advance and coordinates the comparison and decision-making process within the pricing window. If the deadline is missed, suppliers will need to reprice their offers.
Large energy user pricing is typically unbundled, so comparing headline unit rates alone may not identify the lowest-cost offer.
Utilityfair uses detailed cost models to apply each supplier's rates and charges to your quarter-hour electricity consumption data or monthly gas usage data. We calculate the full estimated annual cost of each offer and compare suppliers, contract structures and costs against your existing arrangements on a like-for-like basis.
Yes. A tender can include multiple locations and meters, even where their existing contract end dates differ.
Utilityfair reviews the contracts and consumption data for each meter and assesses opportunities to align contract end dates. The tender can then be structured around your operational requirements and preferred approach to managing the portfolio.
Yes. Flexible purchasing contracts allow you to fix specified portions of your expected energy requirements while leaving the remainder exposed to wholesale market movements.
You can execute trades in agreed increments for individual months throughout the contract. For example, you could fix 50% of your winter requirements, fully fix a particular month or leave selected months unfixed. The approach depends on your risk appetite, budget requirements and purchasing strategy.
No. A fixed-price contract locks in the agreed energy component, but it does not necessarily fix every charge on your bill.
Changes to regulated charges and taxes, including network charges, capacity charges, the PSO Levy and VAT, can still be passed through. Under the arrangements described in this article, these changes are passed through without an additional supplier margin.
Yes. Renewable electricity and sustainability requirements can form part of the tender specification.
Options may include supplier-backed renewable certification, Guarantees of Origin (GOs), certificates associated with a particular renewable asset or a Corporate Power Purchase Agreement (CPPA) with a named wind or solar farm. Utilityfair can incorporate your requirements into the tender so that the resulting supplier offers can be assessed against your objectives.
Our involvement continues throughout the contract. We provide support with billing queries, consumption profiles, changes in energy requirements and the addition of new locations or meters.
We also share energy market updates and engage with you well ahead of contract expiry to prepare for your next tender. Bespoke monthly consumption, carbon and sustainability reporting is available as an additional paid service.
