Optimising energy purchasing and reducing costs and risks

Purchasing energy requires taking decisions across different time horizons. Companies must define what share of their needs to cover in advance, what volume to keep exposed to the market and which instruments to use at each moment. A sound strategy has to take into account the expected evolution of prices, the possible market scenarios, the consumption profile and each organisation’s risk tolerance.

The workshop will analyse how to plan purchases and how to combine the spot market, futures, bilateral contracts and PPA. The choice does not depend solely on the price available at a given moment. The contract duration, the flexibility, the budget stability, the risk taken on and the ability to adapt to changes in consumption or in market conditions also play a part.

The session will also address how to align purchases with actual demand. For retailers, this means improving portfolio management, preparing offers on a sounder basis and reducing imbalances. For industrial companies, large consumers, electro-intensive companies, data centres and renewable fuel producers, it means adapting contracting to the consumption profile and anticipating how their needs may evolve.

Self-consumption, storage and demand flexibility can complement the purchasing strategy. These resources make it possible to shift or reduce purchases during the most expensive hours, take advantage of periods with more favourable prices and limit direct exposure to the market. Their contribution has to be analysed together with the contracts and the hedges in order to assess their impact on costs and risks correctly.

Finally, continuous monitoring of market prices, consumption and purchase positions makes it possible to detect deviations and adapt the strategy when conditions change. Having an integrated view facilitates decision-making and helps to maintain the balance between cost, stability and market exposure.