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How to contract better energy solutions?

Rafael Herzberg's picture
Consultant energy affairs Self employed

Rafael Herzberg- is an independent energy consultant, self-employed (since 2018) based in São Paulo, Brazil* Focus on C level, VPs and upper managers associated to energy related info, analysis...

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  • Jan 11, 2022
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How to contract better energy solutions?

The classic way for companies and institutions is to select each "piece" of the "whole" and close contracts one by one.

Examples: contracting energy on the free market, energy efficiency solutions, demand control, consumption and power factor, generation and cogeneration projects, migration to higher voltage connection, etc., etc.

A "holistic" approach allows you to achieve more interesting and convenient results.

Get to know this model that starts with the management levels - defining strategies to bring to the negotiation table companies that are able to offer structured packages involving technical, financial, legal and management solutions.

Make sure to learn about the proposed road-map and unveil a new format that has realistic chances of putting your organization at the cutting edge of the market in terms of energy costs and reliability.

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Thank Rafael for the Post!
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Matt Chester's picture
Matt Chester on Jan 11, 2022

Make sure to learn about the proposed road-map and unveil a new format that has realistic chances of putting your organization at the cutting edge of the market in terms of energy costs and reliability.

By your phrasing here, I'm assuming some people fall into the trap of going after unrealistic roadmaps, right? What are some of the common pitfalls in that direction? 

Rafael Herzberg's picture
Rafael Herzberg on Jan 12, 2022

I will give you a real life example that involved my client, a leading transformation industrial plant based in the greater metropoplitan area of São Paulo.

This client used to close a new power deal every December. This - as a result - implied that the client had to pay for the ongoing market price - case closed. 

My advice (fortunatelly accepted) was checking power prices well in advance (since the 1st semester of the year) and only lock a deal when there was a very attractive price on the table.

The result was a hefty 40% reduction in power prices. Originally the contracted power price was R$ 250/MWh. With the new methodology the client was able to lock a deal at R$ 150/MWh. 

And most importantly. The power bill was a top 5 cost for this client. 

Bottom line. If you ask a power trader for prices then it is in their best interest to close a deal NOW. If you have your own methodology, you might have way better results.

And this can be replicated to a list of energy related solutions. The point being. Potentially there are conflicting interets at stake (provider and th client) and the client should be well aware of this fact and deal with it!


 

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