Choosing a supply contract and managing it properly while it is valid are the most important steps in Energy Purchasing Guidance. The definition of a Purchasing Strategy, knowledge of the market and the different products available for each client, conducting a transparent bidding process, and managing the formalised contracts, are fundamental points in ensuring successful management of energy purchasing.

–       Definition of the Purchasing Strategy.

Within the definition of a Purchasing Strategy, two fundamental parameters must be borne in mind: predictability and seasonality. With these parameters, both the client risk profile and the most appropriate contract type for them are defined.

The utility companies may have a diversity of contract types which are not available for all clients or supplies, as other criteria come into play such as the segmentation of the clients, consumption volumes managed or even limitations in the product portfolios of the utilities themselves. The decision to opt for a fixed-price, purely index-linked or flexible product which offers hedges in the futures market (“multiclick”), will depend on the risk profile of the client and the availability of the product. Therefore, market awareness is very important to determine which products are the best fit to the client profile.

–       Bidding process.

The bidding process is the phase of Energy Purchasing Guidance in which we proceed to choose the contract. GE&PE Engineering guarantees the complete transparency and independence of this process, as it is not subject to external pressure from the utilities, allowing the maximum benefits of the contract to be passed on to the client.

Together with the client, the contractual conditions are established on the basis of the Purchasing Strategy defined, preparing the bidding documents and launching the query (RFP) onto the market with a wide range of utility companies. After analysis and assessment of the bids, a report is issued for the client to take a decision. Finally, the contracts to be signed are reviewed to verify that they match the particular and general conditions offered, and that they will enter into force properly.

–       Energy Market and Purchase Recommendation Tracking.

The final phase of Purchasing Guidance is managing the contract. This is achieved through Energy Market and Purchase Recommendation Tracking. This is a necessary service in managing energy supplies, to identify the best moments to buy and give recommendations on setting the contract price, where this is permissible.

For this phase, GE&PE Engineering has a team of analysts who monitor the energy markets continuously to assess the different future market trends. For monitoring and tracking the energy markets, the different variables sensitive to the market price are analysed. Macroeconomic, microeconomic and geopolitical parameters, water reserves, climatological factors, forecasts of special regime energy generation, forecast consumption demands at local-continental-worldwide level, prices and future quotes for raw materials such as petroleum, natural gas and coal, energy reserves, CO2 emissions rights, and others, are all values which are appraised to prepare the forecasts of market behaviour and define the trend curves. In addition, GE&PE Engineering enjoys the technological and information support of prestigious European companies from the energy sector.

Given the current volatility of the energy markets, the most important parameters in Purchasing Guidance these days are choosing a utility company whose offering fits well with the Purchasing Strategy defined, as well as choosing the right moment to conclude a contract or, when index-linked or futures market contracts are chosen, to know when is the right time to conclude a certain hedging.

During this phase of the work, GE&PE Engineering issues a monthly report on the energy market showing the evolution of the sector, the reference indices and future trends expected; it performs tracking of how the energy markets are evolving to determine the best moment for hedging; and it monitors the portfolio of supplies managed to ensure the envisaged objectives are being met.

In addition to proper Energy Purchasing Guidance, it is fundamental to track the consumption and billing continuously, so that deviations can be detected and to improve those aspects which lead to genuinely lower energy costs for the activity and optimal quality for each of the supplies.

–       Billing tracking and control.

The Billing Tracking and Control service monitors the supplies in the management portfolio and identifies possible deviations or billing errors, so that the contract parameters can be optimised in the first case, or the appropriate claims made in the second.

The bills are checked using computer-based control tools which generate the corresponding tracking reports to be sent to clients. The service also offers legal guidance and handles claims arising from billing errors or defective supply quality. In this last case, GE&PE Engineering can give technical support with the installation of its own grid analysers to log quality parameters with a view to possible claims against the distributor company.

Giving budget estimates and the flexibility to prepare any technical report the client may need are possible thanks to our experience in the sector, in the energy law of both Spain and Portugal.

–       Data management and registration.

All the information about the supplies managed by GE&PE Engineering is held in a powerful data platform, developed internally by the R+D department of our company in collaboration with the Energy Management department. Here, all the data about contracts, consumption and billing, as well as incident logs, among other information, are stored.

Clients can gain access to this data platform to view data about their own managed supplies, download consumption and billing histories, tracking reports, circulars and any other information about the management of the electricity or gas supplies in their portfolio.