Energy prices have surged in recent years due to rising demand and climate change. According to the U.S. Energy Information Administration (EIA), new solar and wind projects boosted these sources to 16% of total U.S. electricity generation in 2023, up from 14% in 2022 and just 8% in 2018. Meanwhile, coal's share dropped from 20% to 18%, and natural gas saw a slight decline from 39% to 38%.
This shift towards renewables, along with the unpredictability of traditional energy sources, makes it crucial for businesses to navigate the energy market carefully.
Making the wrong call on when to lock in energy contracts can lead to significant financial losses. Managed energy procurement offers a solution.
Let’s explore what managed energy procurement is, its benefits, and how Pilot Energy’s tailored strategies can keep you ahead of the curve.
What is Managed Energy Procurement?
Managed energy procurement involves the strategic sourcing, negotiating, and managing of energy contracts to meet a business's specific operational needs. Unlike traditional retail energy purchasing, managed energy procurement transitions businesses from retail to wholesale buying, allowing large-scale consumers to secure more favorable rates and terms.
Think of it like buying in bulk at a wholesale club like a big box warehouse versus buying individual items at a retail store. For example, instead of purchasing small units, businesses can buy full megawatts of power, leveraging greater purchasing power.
Managed services like Pilot Energy facilitate this by enabling businesses to participate in the wholesale market without the complexities and administrative overhead typically associated with it.
Benefits of Managed Energy Procurement
• Cost Savings: Significant cost reductions can be had by purchasing energy at wholesale prices. This is particularly beneficial for large-scale consumers who use substantial amounts of energy.
• Enhanced Purchasing Power: Bulk buying enables better price negotiations and long-term stability in energy costs, providing a financial advantage.
• Risk Management: Managed energy procurement helps businesses mitigate risks associated with market volatility. By locking in prices when they are low and adjusting energy procurement strategies as needed, businesses can achieve more stable and predictable energy costs.
• Operational Efficiency: Accurate scheduling and forecasting of energy usage allow businesses to adjust based on actual consumption, optimizing costs.
Market Intelligence & Energy Procurement
Market intelligence is essential for making informed energy procurement decisions. Tools like Pilot Energy's PowerUp™ provide real-time data and analytics, helping businesses stay updated on market trends and optimize their strategies. PowerUp™ allows users to visualize energy trends and track price movements, streamlining the decision-making process by reducing reliance on spreadsheets and manual analysis. This centralized platform enables effective management of energy procurement strategies.
Customized Energy Procurement Strategies With Pilot Energy
Our energy procurement strategies are customized to meet the particular needs and risk profiles of each customer. We begin by assessing your risk tolerance and operational goals, whether you prefer the potential savings of index pricing or the stability of fixed-rate contracts.
By understanding your unique requirements, we develop tailored strategies that align with your financial and sustainability objectives. Ongoing support and training ensure that you can effectively implement and optimize these strategies for better energy cost management.
More About Our Energy Procurement Advisors
Pilot Energy’s advisory team offers more than just market data. We assist businesses in navigating the energy market, ensuring compliance with regulatory requirements, and providing strategies for hedging and risk management.
Our comprehensive approach helps you make strategic decisions that align with your business goals. Besides market insights and strategy development, we handle supplier management and stick with you beyond the contract signing. With continuous monitoring and expert guidance, we ensure you're supported every step of the way.
Pilot Energy
Founded in 2001, Pilot Energy is an unbiased and independent energy procurement advisor that empowers leaders to confidently know when, where, and how much energy to purchase by leveraging our unique blend of industry knowledge and innovative digital platforms. Putting our know-how to work daily, we drive clarity and control in decision-making and take pride in providing unparalleled personalized service. Guiding businesses with strategic innovation while committing to sustainable solutions.
Ready to optimize your energy strategy? Schedule a consultation with our experts today and start saving smarter!
