Energy Update Issue 5 Market update There has been considerable media coverage of how the war in Ukraine has pushed an already inflated wholesale energy market to historic highs. Costs were already elevated following the spike in prices in the second half of 2021 and many analysts are forecasting that the UK will be heading for an extended period of high energy bills. The reason for this is that the UK is now part of a global market for energy where Russia is a key gas supplier and when there are risks of disruption to gas flows, prices reflect a situation where demand could exceed supply. This means that even if only a very small percentage of gas used in the UK is from Russia, as some countries have few other supply options, costs will increase for everybody. European countries are making plans to reduce dependence on Russian gas but these strategies will take time to implement and therefore geopolitics will continue to be a key driver of market movement. It is also inevitable that high energy costs will have some impact on demand
as some industry sectors reduce operations. This means markets are likely to remain highly volatile for some time, as they react to changing economic conditions and any news of escalations in the ongoing conflict in Ukraine. The ESPO Energy team have been able to protect customers from these high prices by forward purchasing energy in advance. The rates ESPO gas customers are currently paying are around a third of those now available on the market, saving customers thousands of pounds. However, when the market remains high for an extended period, like other suppliers, we need to obtain some of the gas and electricity our customers require at prevailing wholesale rates. Our traders will continue to look for opportunities to secure energy when conditions are most conducive to do so and with the ability to purchase volumes flexibly, we seek to balance the risk of further increases, while being able to take advantage of lower rates should there be a fall in wholesale costs in the future.
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Gas Renewal Reminder Join the hundreds of customers who have already signed up to the 2023-2027 period! We are a credible, customer service driven organisation that can mitigate price shocks due to the way we purchase energy when markets are favourable. The effectiveness of this strategy has mitigated the actual rises in the wholesale markets which are currently around 400% higher than those purchased by us. ESPO’s Mains Gas framework (192) uses a flexible purchasing strategy which has kept prices low over many years and will do so in the future. We have already hedged a proportion of the gas you would be using from April 2023, to ensure you benefit from our successful strategy. If you have already signed and returned your documents, thank you for choosing to renew with ESPO. If you haven’t yet returned your documents, please do as soon as possible.
Got a question? If you have any questions regarding your renewal, please contact energy@espo.org.
Meet the team, Damon Fleming Damon has taken over as the National Account Manager for Total Energies and is responsible for the overall running of the frameworks in which there is a sole supplier for both gas and power. He is an experienced industry professional having served customers for more than 13 years within the utilities sector. He has largely worked for ‘big six’ suppliers and spent most of his career working with public sector customers and frameworks.
Total Energies Staff Changes You may notice a few new names appearing in your inbox when receiving emails from our awarded supplier, Total Energies. Anthony Woods successfully secured a new role within Total Energies and has been replaced by Lewis Clatworthy who joined the ESPO Servicing team at Total Energies following the Easter bank holiday.
He has collected experience in operational and customer service roles before settling into the sales, allowing him to offer a variety of support; you’ll often see him getting stuck in when it comes to query management and resolution! Based locally, he is more than happy to get out and about to visit customers as covid restrictions ease and welcomes a chance to meet customers from across the framework.
Liquid fuel framework (301) ESPO is currently in the process of re-tendering Framework 301 for the provision of liquid fuels. The current framework agreement terminates on 17 August 2022 and the new framework agreement is anticipated to begin on 18 August 2022. Individual customer call-off contracts issued under the current framework agreement will expire on 30 September 2022. Customers who have contracts in place with suppliers under the current framework agreement do not need to do anything at this stage, as current customer requirements will be included in the tender documents for bidders to price against. Once tender submissions have been received the ESPO team will evaluate all bids to establish a supplier for all current customers. The evaluation will be based on the MEAT (Most Economically Advantageous Tender) methodology and will take into account both price and quality, as well as social value considerations. Once the outcome of the tender process is known, customers will be informed of the chosen supplier for their organisation. The new framework agreement will have provision for delivery of all standard liquid fuel products (diesel,
petrol, heating oil, Adblue etc.) and will also have a Lot for the provision of Green Fuels, such as HVO (Hydrogenated Vegetable Oil) and GTL (Gas to Liquid). New to this framework is a Lot for the provision of Bunker Fuel, whereby customers can bulk order diesel or petrol from their assigned supplier and have the fuel placed into the UK fuel bunker network rather than have the fuel delivered to tanks located on their premises. Customers can then fill up their vehicles from a range of forecourts, calling off the fuel they placed into the bunker network through a fuel card issued by a provider of their choice (such as Key Fuels Ltd, or UK Fuels Ltd). The benefits of this provision include: Vehicles do not have to be driven to a specific location to fill up fuel tanks. Drivers can fill up at a closer, local forecourt instead - saving time, money and emission. Unlike traditional fuel cards where prices paid for fuel are the retail ‘pump price’ plus an administration charge, the price of the bunker fuel is linked to the discounted, wholesale price as quoted by the Platts index, therefore saving money for your organisation.
Got a question? To ask any questions or obtain information regarding the Liquid Fuels framework (301), please feel free to contact us at energy@espo.org
Service lines More information on the service lines we offer can be found below: POSO – Purchase Only Service Only For this service ESPO will purchase your energy from the wholesale market using our flexible cost saving trading strategy.
Huge savings for customers
Over £115,000 saved for ESPO customers!
Reduced invoice query time by 51%!
POSO+ – Purchase Only Service Only plus Bill Validation For this service ESPO will help guide you on your energy needs through query management and bill validation on top of purchasing your energy.
Monthly average number of gas queries dropped by 72%!
We always strive to achieve savings for our customers without compromising on products or services. Bill Validation and evolving technology are an example of how we can do this.
FM – Fully Managed (Gas only) For this service ESPO will oversee all your bills and intercept any incorrect charges received and resolve directly with the supplier so you should only ever see a correct bill. POSO
POSO+
FM
ESPO will purchase your energy using our risk managed flexible trading strategy ESPO will assign your account a dedicated bill analyst to review each of your bills and provide you with a monthly view of correct invoices on your account
Bill Validation Service Our bill validation team have reached a huge milestone by saving over £115,000 for customers by intercepting incorrect bills since the service began in April 2019. When customers take our value-added services we tightly manage the supplier and strive for a positive customer experience. In the last 6 months we have managed to reduce the average time invoices spent under query by 51%, largely due to holding a weekly targeted clinic. Furthermore, through efficient query management and resolution, the monthly average number of gas queries has dropped by a huge 72%.
Your dedicated bill analyst will fully manage any queries on your behalf to ensure any incorrect billing is resolved promptly
Evolving technology Technology is constantly evolving and this is no different Total Energies Staff Changes for the energy sector. Automatic meter reading (AMR) devices are a hot topic in the industry right now, but we are finding that faults can occur as AMRs can become static and cause large catch-up bills once the standstill has been resolved. Utilising our weekly clinics, we identified a method of flagging static AMRs and during the winter period of 2021/2022 we visited over 60 sites to resolve this, ensuring customers budgets were not negatively affected.
Weekly query clinics to reduce query turnaround times
Gain access to ESPO’s online portal to visualise and track your energy usage over time ESPO invoices are created monthly by your dedicated bill analyst
Do you have any concerns about the accuracy of your bills and want to know more about our bill validation service? Get in touch on energy@espo.org and one of our dedicated team will arrange a meeting with you.
Barnsdale Way, Grove Park Enderby, Leicester, LE19 1ES T. 0116 265 7878 E. energy@espo.org espo.org