The evolving dynamics of the energy sector present both new opportunities and unprecedented risk for our customers. No two days are alike in the energy market, so it is imperative to help customers navigate their risk and make the most from the energy value chain. A one-size-fits-all approach is no longer a viable way to consider sourcing your energy. Customers need more sophisticated offerings; tailored, flexible solutions based on their unique risk tolerance and budget.
Understanding risk tolerance
Understanding risk tolerance or risk appetite in energy is similar to how risk is considered in other financial investment decisions. For example: do you want to put 90% of your investment into a more volatile stock market? Or are you more comfortable with a diversified approach and consider bonds and other more secure financial vehicles? Energy sourcing should be considered with this same lens by considering the volatility of energy prices and weighing what is appropriate for their business drivers.
For example, customers that are typically more risk averse may find that a fixed price solution is best to maintain a degree of budget certainty. On the other hand, customers that are more comfortable riding the ebbs and flows of the energy market may find that an index price solution (with price locks) might better match their higher risk tolerance.
Custom, tailored solutions
Proactively identifying opportunities across the energy value chain and delivering tailored solutions is crucial to customers. This involves understanding key criteria such as budget considerations, target goals, current strategies and aspirations for improvement. Considering the needs of the customer results in meaningful energy solutions that address specific needs.
A prime example of a customized solution is a multi-year retail energy supply agreement that addresses price, risk and specific objectives. Such agreements can provide flexibility and stability by locking in prices for a portion of usage while allowing the remaining usage to float at the current market index price. In this agreement, a pilot program implements a process for all transmission and ancillary services billed directly from ENGIE instead of the local utility, with charges based on actual demand. As such, the venues can take advantage of savings that stem from their distinctive peak load characteristics versus higher pooled costs.
Importance of sustainability
Renewable energy is growing at an unprecedented rate, and organizations have set aggressive goals for sustainability including ambitious target dates for net zero carbon emissions.
By integrating renewable energy into tailored solutions, we empower customers to meet or exceed their sustainability energy goals. Embracing sustainability in energy procurement is not just beneficial for our environment; it is a strategic move to ensure resilience.
Matching energy consumption with renewable energy credits (RECs) can help companies achieve their set targets while meeting their current energy demands. This approach can bring the benefits of renewable energy to businesses of all sizes, regardless of market location and structure. ICA Miami is matching 100% of its consumption with RECs (renewable energy credits) which is a greenhouse gas emissions reduction equivalent of 1,352 metric tons of CO2.
Providing support
It is essential to offer customers responsiveness, timely pricing and helpful tools to manage their energy usage and spending. Leveraging energy expertise can bring valuable insight to the table. For example, the utilization of wholesale markets and structuring risk management products based on customer objectives can ensure further financial security in energy procurement.
