Case Study

Strategic Energy Procurement

Background

Our client is a UK-based property management group with responsibility for a prestigious portfolio of buildings, including one of London’s most iconic and landmark buildings with over 25 tenants.

Each tenant is required to pay an annual service charge, which uses accurate energy forecasting to assist in setting the charges. Prior to February 2020 and pre-pandemic, energy usage had been relatively stable at 29 GWh per annum.

However, by March 2020 consumption had been significantly impacted by Covid and reduced tenant activity and demand had declined to 25 GWh.

The client’s energy contracts were up for renewal in Autumn 2021, during a period of unprecedented turbulence in the wholesale gas and energy markets. Previous annual spend was c£2.8m (electricity) & £0.4m (gas), so the client was facing a significant increase in their commercial energy budget.

At the same time, the business had an objective to increase and improve use of renewable/green energy providers as part of their energy strategy.

What We Did

RPM Consultants energy procurement specialists:

  • Undertook a detailed financial assessment to determine clients’ attitude to risk and financial planning, particularly important given the volatility of the energy markets in Autumn 2021.
  • Provided detailed analysis on the commercial energy markets, tracking price fluctuations and made recommendations on when to purchase at the best possible moment for our client.
  • Led on detailed negotiations between the client and energy suppliers, using our commercial energy expertise and experience to secure improved credit terms.
  • Highlighted new negotiable areas such as volume tolerances, pass through charges or bill payment terms, ensuring our client received the best terms available at no additional cost.
  • Reviewed the combined heat and power (CHP) system for the portfolio, identifying opportunities to improve operational and energy efficiency improvements.

Outcomes and Impact

Key successes included:

  • RPM Consultants energy procurement specialists successfully negotiated gas and electricity supplier renewals, mitigating their original renewal increases and saving nearly £200k each year, over a 2-year period.
  • Obtained improved supplier credit offers, ensuring our client achieved maximum benefit from the chosen energy supplier’s terms and conditions.
  • Efficiency cost savings due to the CHP improvements were reinvested to update sub-meters, improving accurate energy reporting and tenant recharges.
  • Guaranteed green energy supply for the term of their supply without any additional charge.

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