Communal Energy Supply Procurement Strategy
Our customers will be aware of the difficulties faced by the energy market in recent times with substantial increases in gas and electricity prices well publicised, with some suggestions of this impacting homeowners by around £400 per year.
On behalf of all our customers with communal energy requirements, we interact with market specialist energy broker, Indigo Swan, who have extensive knowledge of the Property Factoring industry in Scotland, and the Property Management industry in England and Wales.
Indigo Swans primary objective is reviewing the energy market and seeking the most appropriate energy deal for our customers. Thereafter, they make recommendations on the placement of our customers energy contracts.
Following such recommendations from the broker, contracts are then placed for communal energy supplies throughout our portfolio. Whilst the supplies are relative to communal facilities serving domestic premises, as there is no single domestic client, it can be difficult for homeowners to enter domestic contracts and for the most part, these are classed as “non-domestic” by energy providers.
Having asked Indigo Swan in early 2020 to review the market for our customers, they, with their knowledge of the market, confidently recommended that the most appropriate route was for our customers to secure a 3-year contract with Opus energy, these contracts commencing on 1st August 2020.
We are advised that when looking at the electricity wholesale cost at the time of the market review, it averaged £47/MWh. The Wholesale element made up about 40% of the overall delivered cost for each electricity unit (kWh). We understand to place such a contract now, from November 2021 for one year, the price would be £160/MWh.
We are delighted that our customers, because of their current three-year fixed contract, will continue to benefit from no increased energy costs through till at least August 2023.
Indigo Swan, like many others in their industry, hope that the next 6-12 months will see an improvement in the energy wholesale market pricing, and we will continue to work closely with them as we move towards renewals in 2023.