Learning & Insights - Whitepaper
Top 5 Mistakes Businesses Make in Energy Procurement and How to Avoid Them
Cut Your Commercial Energy Costs with Confidence
Helping UK businesses reduce electricity and gas bills, choose the best energy contracts, and reach carbon neutrality through our fixed and flexible procurement services.
Commercial Energy Procurement Experts
Yet many businesses still fall into common traps that lead to overspending, inefficiency, and missed sustainability goals.
At Advantage Utilities, we’ve helped hundreds of organisations navigatethis space with confidence.
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Top 5 Mistakes Businesses Make in Energy Procurement
Choosing a Supplier Based Solely on Price
On the surface, selecting the cheapest energy rate may seem like the most logical decision, especially when budgets are tight. But in reality, price-only comparisons can lead to costly surprises down the line. Procurement is about value, not just savings, and failing to see the full picture is a common trap for businesses of all sizes.
The Risk:
A low unit rate may not reflect the full contract cost. Some suppliers add hidden charges or lack flexibility and customer service.
The Solution:
Look beyond the rate. Evaluate suppliers based on:
Contract terms and break clauses.
Billing transparency
Green energy credentials
Service and support record
Work with a consultant who can benchmark suppliers properly and negotiate on your behalf.
Not Reviewing Contracts Regularly
Many businesses set their energy contracts and forget about them — until it's too late. Without regular reviews, contracts can lapse into expensive rollover rates or default terms, often with limited options for change. A proactive approach is essential to staying in control and avoiding unnecessary costs.
The Risk:
Allowing contracts to roll over can place you on expensive default tariffswith no control over rates.
The Solution:
Track your contract end dates and notice periods.
Set calendar alerts or use a bureau service to monitor terms.
Re-procure at least 6 months before expiry for optimal market timing.
Ignoring Flexible Procurement Options
Fixed energy contracts are often viewed as the “safe” option, but they’re not always the most strategic. In a volatile market, flexibility can unlock cost savings and help businesses respond to changing conditions. Yet, many businesses aren’t aware of the alternatives, or how to use them effectively.
The Risk:
Fixed contracts aren’t always the best fit, particularly during volatile market conditions.
The Solution:
Consider flexible purchasing if you have high or predictable energy use.
Flexibility can enable cost savings when markets dip and provide better risk control.
Use real-time market intelligence to make informed decisions.
Overlooking Sustainability in Procurement Decisions
Sustainability is no longer a “nice to have” — it’s a business imperative. Energy procurement decisions made without considering environmental impact can hinder progress toward Net Zero, damage brand reputation, and even limit future funding opportunities. Integrating sustainability into procurement is now essential.
The Risk:
Choosing non-renewable options may conflict with Net Zero targets and corporate responsibility goals.
The Solution:
Assess green tariff options, on-site generation, or Power Purchase Agreements (PPAs).
Align your procurement with your carbon reduction strategy.
Track emissions performance as part of your supplier evaluations.
Managing Procurement Internally Without Expert Support
Energy procurement is a complex and rapidly evolving landscape. While many businesses try to manage it internally, limited market access, lack of time, and inexperience often result in missed opportunities or poor-value contracts. Working with experts can make all the difference.
The Risk:
Procurement is time-sensitive and complex. Relying solely on internal teams may limit outcomes and expose you to market risk.
The Solution:
Work with an experienced consultancy like Advantage Utilities.
Gain access to wholesale market data, supplier relationships, and bespoke strategy advice.
Free up your internal team to focus on core operations.
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