News
11 Sep 2024
The outcome of Ofgem’s Non-Domestic Market Review marks a pivotal change in the energy industry, aiming to ensure fairer treatment for business consumers of all sizes. As part of this review, Ofgem is rolling out a series of measures designed to enhance the transparency of fees, improve the customers’ experience and boost accountability across the sector.
Key changes include the expansion of the Standards of Conduct, ensuring suppliers offer fair treatment to all non-domestic customers, not just microbusinesses. These changes focus on improving the accuracy and timeliness of bills, handling complaints effectively, and enhancing communication with customers.
However, perhaps the most significant development is the move to improve transparency around Third-Party Intermediary (TPI) fees.
Starting from 1 October 2024, energy suppliers will be required to disclose fees paid to TPIs, such as brokers or consultants, as part of the supply contract. For non-microbusinesses, fees must be displayed as a “cost per unit,” while for microbusinesses, fees should be shown as a total cost across the contract’s duration.
This change addresses long-standing issues of hidden or inflated broker fees, ensuring you have clear and accessible information to make more informed decisions when choosing energy suppliers and brokers.
This is an important change in the energy industry, and we welcome it. For too long, unscrupulous brokers have been able to get away with inflating prices and hiding their fees. These companies now need to adapt to a market where pricing is no longer opaque, and look to improve their service as businesses become better equipped to compare offerings.
Alex Payne
Director of Energy Markets and Procurement
With fee transparency becoming standard practice, the focus for energy buyers is shifting from cost alone to the overall value and services provided. As an energy customer, it’s now essential to consider not just the price, but also what additional benefits and support your energy consultant can offer your organisation—whether that’s enhancing sustainability, optimising energy management or providing tailored solutions for your business’s needs.
To help you make an informed choice, we’ve outlined five key questions to guide your evaluation and due diligence of a proposed energy consultant.
Look for a consultant that can offer a variety of contract options so you have access to the diversity and choice that the energy market offers.
At Zenergi, all procurement engagements start with a consultation to develop an understanding of your individual needs to ensure recommendations are tailored to meet budgets, value for money criteria and sustainability targets.
Zenergi’s expert consultants will guide the whole procurement process to free up your time and provide peace of mind that your utilities are in expert hands.
Whether your risk appetite remains with traditional fixed procurement or stretches to flexible buying, at Zenergi we create the best strategy based on your business requirements. We will also review all options, including green, renewable solutions.
A consultancy that serves a wide range of clients of all sizes and from a diverse mix of sectors will be well placed to address the needs of any client. Look for relevant industry associations that will help to ensure the consultancy understands the unique challenges in your industry.
Zenergi has a 20-year history of delivering value through transparent pricing, expert market insights, and a commitment to renewable energy options. During this time, we have built an enviable customer portfolio including, but not limited to, education and the public sector, manufacturing, retail, hospitality and finance. We are an approved partner to several leading bodies, including The Association of School and College Leaders, Institute of School Business Leaders, Aluminium Federation and Composites UK.
A good consultant will work with a range of suppliers and ensure recommendations are based on clients’ individual energy use and situation. They will present prices and clearly detail the options available in a standard format, making comparison easier and they will talk through the options.
Zenergi’s experienced Procurement Managers are supported by an expert Energy Markets team. This team is comprised of energy industry experts dedicated to continuously monitoring market conditions on your behalf. Ensuring they keep a keen eye on the market through a range of market fundamentals, our analytical team will be at the forefront of any changes to pricing trends or legislation changes. They deliver valuable insights to our Procurement Managers weekly, while empowering you to make well-informed decisions through their market reporting analysis, which is available to subscribe to on a daily and monthly basis. Identifying the right time to buy, whether that be fixed or flex, is our speciality.
Choose a consultancy that works with a wide selection of energy suppliers to access a large variety of contract options.
Be aware that some consultants can unfairly represent contracts, whereby unit rates are “broken down” and only some elements of the proposal used. When compared with other proposals, which may have fully inclusive prices, they can appear significantly cheaper than those of their competitors. If there is a significant difference in proposed costs then something is not right.
Ask for a written comparison which identifies the suppliers on offer and standardised pricing comparisons and ask for them to be presented to ensure you fully understand the options.
At Zenergi we run tender exercises from a panel of 15 pre-approved suppliers, offering you a variety of choice of contracting terms, contract lengths and type of products, including fixed and flexible purchasing options. Key supplier relations enable us to offer more bespoke products to maximise your opportunity to secure the best price.
Our experienced Procurement Managers will take the time to understand your needs and use their knowledge to gather prices from the most suitable suppliers. They will then provide detailed comparisons and expert recommendations, so you can make a fully informed purchasing decision.
If energy efficiency, cost saving and net zero are important drivers for your business, look for a consultant that can help you beyond procurement.
Zenergi is a leading energy and sustainability consultancy dedicated to helping organisations achieve their energy, carbon and cost-saving goals.
From bill validation ensuring you are billed at the rates that have been agreed with the supplier, to maintaining compliance with energy regulation, or optimising your utility usage and achieving net zero goals, we are here to help you achieve your goals cost-effectively and at pace.
We are as serious about our own contribution to a sustainable future as we are about yours, giving us even greater insight into what it takes to achieve ambitious sustainability goals.
As fee transparency reshapes the energy market, it’s crucial to partner with the right consultant. Make informed decisions, access competitive rates and unlock added value with a consultancy that aligns with your goals.
Contact us today to discover how we can help you optimise your energy management process.
As fee transparency becomes the new norm, the purchase focus will shift from cost as the differentiator to an overall service value.
