Energy procurement is pivotal to managing business costs. However, poor strategies in this area often result in unnecessary expenses and missed opportunities to buy energy at cheaper rates. For businesses with tight budgets, these costs can affect the bottom line. 

At Commercial Energy Solutions (CES), we specialise in energy procurement, navigating the complexities of energy markets to help businesses thrive. But first, let’s uncover the common energy procurement mistakes businesses make and, most importantly, how you can avoid them. 

Understanding the Consequences of Energy Procurement Mistakes 

Ignoring energy procurement best practices doesn’t just lead to higher utility bills, it can also limit your ability to improve operational sustainability, adapt to market changes and capitalise on cost-saving opportunities. 

Here are five common errors businesses make in energy procurement and how they can have lasting impacts: 

1. Lack of Energy Market Knowledge

The energy market is complex and volatile, with prices frequently fluctuating due to factors such as weather, political events, or shifts in supply and demand. Businesses that fail to understand these nuances often lock in unfavourable energy rates. 

For example, signing a long-term fixed-rate contract during a period of high market prices can leave you paying more than necessary for years. Companies without market expertise commonly overlook these trends, paying the price for their lack of insight. 

How to avoid it: 

• Stay updated on market trends with quality market intelligence  

• Collaborate with energy procurement experts, such as CES, to analyse market forecasts and secure optimal rates. 

2. Rushing the Contract Negotiation Process

Another critical mistake is failing to review energy contracts carefully. Many businesses accept the first deal they’re offered without assessing the charges, unfavourable terms, or clauses that limit future flexibility. 

Overpaying due to overlooked supplier premiums or restrictive terms can result in thousands of pounds in unnecessary expenses over the life of a contract. 

How to avoid it: 

• Collaborate with an energy consultant to thoroughly review contracts and negotiate terms in your favour. 

• Focus on contracts that offer both savings and scalability. 

3. Not Shopping Around for Better Rates

Some businesses settle for the first energy supplier they find or stay loyal to their current provider out of convenience. However, energy suppliers often provide different rates and benefits that could lead to significant savings if thoroughly compared. 

How to avoid it: 

• Regularly evaluate your options and request quotes from multiple energy providers. 

• Leverage CES’s network of trusted suppliers to compare offers and secure the best deal. 

4. Ignoring Renewable Energy Options

Consumer and regulatory pressure to increase sustainability continues to grow. Businesses that ignore renewable energy options not only risk missing out on tax incentives and subsidies, but may also experience reputational damage among eco-conscious stakeholders. 

How to avoid it: 

• Include green energy solutions in your procurement strategy to unlock incentives and align with stakeholder values. 

• CES can provide renewable energy options with certified source of renewable energy and guide the implementation of sustainable practices tailored to your needs. 

5. Failing to Monitor and Adjust Energy Usage

Energy procurement doesn’t end with the signing of the contract. Businesses that fail to regularly monitor energy usage and adapt strategies miss opportunities for further savings and efficiency improvements. 

How to avoid it: 

• Implement ongoing energy analytics to assess performance and identify inefficiencies. 

• Schedule regular procurement reviews to adjust strategies as needed. 

The Real Cost of These Mistakes 

Each misstep in your energy procurement process compounds over time, ultimately may lead to significant financial losses. Consider this example: 

Example: 

A medium-sized manufacturing company contracts 300,000 kWh of electricity annually. 

In April 2023, they locked into a 3-year contract at 31p/kWh satisfied that electricity prices have reduced from 42p/kWh+ since 2022. Over 3-year contract term (2023–2026), they will pay: 

• 300,000 kWh/year × 3 years × £0.31 = £279,000 

Meanwhile, our CES client took strategic approach by analysing energy market intelligence and several supply/demand scenarios along with a non-commodity charges forecast. They decided to secure a 1-year contract at 31p/kWh in April 2023, then renewed into a 2-year contract at 21.5p/kWh in April 2024. Their total cost over the same 3-year period: 

• Year 1 (2023–2024): 300,000 kWh × £0.31 = £93,000 

• Years 2 & 3 (2024–2026): 300,000 kWh × 2 × £0.215 = £129,000 

• Total: £93,000 + £129,000 = £222,000 

CES customer has benefited from additional saving of -£57,000 due to expert guidance backed by market intelligence 

Beyond the immediate financial impact, poor procurement decisions can lead to escalating costs over time, limiting a business’s ability to allocate resources effectively. This is particularly concerning in industries where tight budgets and cost efficiency are critical to maintaining competitiveness and long-term stability. 

How CES Can Help You Avoid Unintended Costs 

 At CES, we turn energy procurement challenges into opportunities. Our team offers: 

• Market Expertise: We track market trends in real time to identify optimal purchasing and strategic approaches. 

• Contract Negotiation: Leave the fine print to us. We ensure terms are transparent and designed to meet your goals. 

• Tailored Procurement Plans: Every business is different. That’s why we create procurement strategies tailored to your energy usage and budget. 

• Access to Renewable Options: We’ll connect you with renewable energy suppliers that offer cost-efficient, environmentally friendly packages. 

• Ongoing Support: Energy needs to evolve. CES provides continuous monitoring and strategy refinement to maximise savings throughout the year. 

By partnering with CES, you gain a trusted energy advisor who ensures you avoid costly mistakes and thrive in a complex market. 

Take Action Today 

If you’re a business leader or energy buyer, it’s clear that improving your procurement strategy can unlock immediate and long-term value. The cost of inaction could equal tens of thousands of pounds in unnecessary expenses—but the solution is within reach. 

Avoid costly energy procurement mistakes by partnering with a trusted provider. Contact Commercial Energy Solutions today to learn more about how we can tailor our expertise to your unique business challenges. Together, we’ll power your business with precision and savings.