One of the many options available to business owners in lowering their commercial power bills is putting out a business energy tender.

But what exactly is a business energy tender and how do you know if it is the best option for your business? Below, we provide some straight answers to the common questions around this process.

What is a business energy tender?

A business energy tender is a process whereby a business invites quotes from energy providers on the wholesale price of the volume of power a business uses. If the business chooses to sign on to one of these quotes, they effectively fix their power price for the period of the contract and therefore can protect themselves against fluctuating prices in a volatile energy market. In essence, it is a way of making energy providers show their hand and offer their best prices for your power needs over a fixed period of time.

Energy Partners blog - business energy tenders

Who can issue a business energy tender?

There are two categories in the tender process: small to medium-sized businesses who typically use up to 100 MWh of electricity per annum, and commercial and industrial businesses who typically use more than 100 MWh of electricity per annum.

Commercial and industrial businesses are able to issue tenders for plans at a wholesale market price, while small to medium-sized businesses are able to issue tenders for retail plans.

Do I have to wait until my current business energy contract is due for renewal to issue a business energy tender?

Absolutely not! It’s possible, and in fact, encouraged, to put out a business energy tender well before your business’s current electricity contract is due to expire. This means that you have plenty of time to compare offers and choose the price that’s best for your business, rather than being forced to accept whatever the market offers when your contract is up for renewal.

What are the advantages of business energy tenders?

The main benefit of issuing a business energy tender is the potential to fix an economical price for your power needs when the market is favourable. By planning ahead and forward-purchasing, you can avoid being stung by spikes in the market due to seasonal demands or unpredictable political or environmental events.

Another benefit is price certainty – the providers responding to your tender will quote for a set amount of electricity over a set time period of 12, 24, or 26 months. That’s great news for budget forward-planning. With a contract in place, you know exactly what your outlay will be for power usage over the given period.

Are there any down sides to business energy tenders?

One of the difficulties of putting your energy needs out to tender is that it can be time-consuming and requires some prior knowledge of the energy market to secure the best deal. Similarly, scrutinising the resulting offers and their terms and conditions involves time and expertise. For many smaller businesses, this challenge can be overcome by outsourcing your tender process to an expert partner. Energy management consultants have the know-how to manage the tender process, analyse the contracts on offer and report back to you with the best options for your business.

How do I start the business energy tender process?

The first thing to do will be to pull up your current energy contract and find out the specifics of what your business is currently paying, how much electricity your business consumes and how much time is left on your contract. Armed with this information, you are able to begin the process of sounding out energy providers for their best quotes. If you don’t feel confident to manage the process yourself, or you need more information, the best option is to engage the services of an Energy Partners, with expertise in the business energy tender process, who can walk you through the process or manage it altogether.

For more information on the business energy tender process, or ways to reduce commercial power bills, don’t hesitate to contact the friendly and knowledgeable staff at Energy Partners. Reducing your power bills is our business. Give us a call on 1300 768 977 and stay a step ahead of the energy price rise.


Jay Dean

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