We offer an assessment service specialized in electricity purchasing
Of all commodities, electricity prices are the most volatile. In this complex market, active and dynamic management is key, because one of the biggest costs in industry can be managed by optimizing supply costs.
The choices in electricity purchasing vary depending on the degree of complexity and flexibility the customer is willing to accept:
PORTFOLIO MANAGEMENT IN ELECTRICITY PURCHASING
Primer paso: ANALYSIS
- 1.- Internal analysis and optimization of your electricity variables.
We perform an initial analysis to form a total understanding of the following points:
- How your business uses electricity.
- How your electricity contracts are managed.
- The possibility of bringing flexibility to your electricity supply contracts.
- Optimization of the factors, which impact your electricity costs.
- 2.- Analysis of the electricity market.
The fundamental analysis of information in the electricity market, its dynamics and drivers that influence electricity prices help us to manage risk and the value our assessment service brings. Some of the indicators we follow include:
- Omie SPOT prices.
- Omip futures prices.
- Electricity prices in the main European exchanges (SPOT and futures).
- Marketplace volatility and liquidity.
- Benchmarking between markets.
- Spreads between commodities.
We don’t claim to be able to predict the future; we understand how the market works. Above all, we’re pragmatic in our approach. We believe that theory and methodology are powerful tools when combined with expert knowledge of the target market.
- 3.- Regulatory analysis of the electricity sector.
The energy sector is highly regulated, so we know, understand and anticipate that any possible regulatory change will affect both the way the market operates and the cost of electricity.We follow regulations in force at both national and European levels, as well as significant repercussions, which may occur in key market or regions such as North America or Southwest Asia.
Second step: ELECTRICITY BUYING
- 4.- Analysis of electricity offers.
- Identification of existing choice in the marketplace.
- Definition of the Request for Quotation (RFQ).
- Completion of the Request for Quotation (RFQ) process at the correct time in the market.
- Analysis and modeling of submitted quotations: fixed price, Omie and Omip indexing, combined formulas.
- Custom products.
- 5.- Management of electricity contracts.
Legal initiatives at the time of defining the contractual terms and conditions favor the usual supplier; it is still commonplace for contracts to comply directly with the supplier’s general conditions. There are, however, opportunities to negotiate changes to aspects of the contract and we can help with this right from the start of the electricity buying process. Depending on the chosen supply method, the qualitative aspects of the contract to be signed are more relevant than the pricing of the electricity itself or non-negotiable formula.
Third step: CONTROL AND MONITORING
- 6.- Control and monitoring of electricity prices.
In an ongoing process, the decisions taken according to the targets set by the customer are monitored and analyzed periodically, based on the chosen purchasing strategy.
- 7.- Risk Management