Energy consumption in the hospitality trade is inevitably high. In fact, according to data from the Carbon Trust, the catering industry uses 20,600 million kWh of energy each year.
Whether you’re running one restaurant or managing a chain, energy procurement proposes a whole host of options and in turn questions.
In the following piece we’ll address the most common queries we get from our customers.
The restaurant is part of a group, should I procure individually or buy in bulk? Â
Generally speaking, the more energy you use, the better you unit prices will be. So, if your approaching an energy supplier with for example five restaurants, then you will get a better overall price than you would if you individually sourced energy for each one.
Consider using an Energy Consultant for group buying as they sometimes have established relationships with energy suppliers that can result in better prices for you.
How long should I commit to a contract?
Once you have identified the best prices for you, consider a longer-term contract. Energy is a volatile market with prices often increasing over time, so obtaining a longer term fixed-price contract will protect you from such price rises for the duration of your agreement.
A fixed contract also provides the opportunity to set budgets and manage cash flow as the unit prices will not change. With these contracts however it is important to note that you are billed based on your usage. So, although your prices are fixed, if you suddenly start using a lot more energy, you will see an impact to your bottom line.
We have a high usage; do we need more energy meters installed?
Sub-metering allows for more insight to be gained into energy performance. For example, if you have a separate sub-meter set up that supplies only refrigeration, you will be able to monitor the performance of those systems in isolation. With more visibility, trends and anomalies can be observed which increases the probability of you identifying where energy is being wasted.
Energy monitoring software will need to be installed in order to access your usage information. The technology offers invaluable insight into energy performance. Also, with more visibility and understanding of your energy use, you will be able to take steps towards being more strategic with the restaurant’s usage.
We’re only half-way through our current contract, should we wait to look at prices?
There are many factors that influence price fluctuations, it is therefore difficult to be 100% accurate with price forecasting. However, statistics show that energy prices have increased year on year. If this trend is to continue, it would be far more beneficial to you to lock in contracts at today’s prices rather than waiting until your renewal window and risk paying more.
There are factors suppliers consider when arranging contracts longer term, such as changes to the wholesale market, which could result in you paying more as a result of the supplying adding a contingency fund to your pricing. That’s why it is worth working with a consultant to navigate the best option for your restaurant.
Given the busy nature of the hospitality sector and the many factors involved with energy procurement, more and more restaurants are taking advantage of expert consultants.