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Why our tender design achieves the Lowest Possible Energy Prices

 

We are Totally Independent

We accept no payments or commissions for placing business from any of the retailers.

We tender to all Licensed Retailers

The importance of researching the whole market cannot be understated.

There are many different financial instruments that retailers use to hedge load, some, like the forward price curves on the ASX are transparent, but there are many other bilateral deals that are not transparent.

So the ability for retailers to offer the most competitive prices can change as the various hedging deals change.

Our Unique Tendering System

Our tenders are designed to maximise retailer interest, drive competition, and minimise retailer margins.

  • We provide all the appropriate data to minimise risk margins for risks that may or may not be real.
  • We make it easy for retailers to respond – thus increasing competition.
  • Once offers are in, we run a Blind Dutch Auction where retailers don’t know what their competition is offering and thus we get to their floor price.

We have unnecessary risk margins removed

The National Electricity Market (NEM) covers NSW and the ACT, QLD, SA, Vic and Tas. It is regarded as one of the most volatile commodity markets in the world. For this reason, energy retailers use various financial instruments to manage their risks.

Our tenders include all of your historic load shape data. For multi-sited clients we also model their future load, which is vital to remove retailer margins for risks that may or may not be real.

We run a blind Dutch Auction to the bottom of the market

Reverse Auctions or other Electronic Processes save the broker time, but cost their clients’ money because they miss the lowest price. These processes allow the winning retailer to know what their competition is offering, giving them no incentive to offer their floor price.

Instead we use a Blind Dutch Auction. It takes more negotiation time, and gets a far better outcome.

There is no prize for coming second, and when retailers don’t know what others are offering, we are able to drive to their floor price.

All offers are entered into a like for like analysis

We empower you with an independent analysis of all offers, and supply current market information. You are then in a stronger position to make an informed decision. This makes it easier for you to choose your Retailer of Choice and the length of contract.

We have no Conflicts of Interest

We are totally independent, and receive no payments from, or have any ties to energy retailers.

Accepting payments or commissions from energy retailers creates huge conflicts of interest. These conflicts are:

  • All commissions in the large market are added to the raw rates, thus adding to the rates your business pays.
  • The higher the price the higher the commission, so there is a disincentive to drive to the lowest price.
  • There are times when its advisable to go short, but long term contracts lock in broker’s commissions longer.
  • The larger the load the bigger the commission.

Access to Current Market Information

We research the market daily, and subscribe to a leading forecasting service. They trawl massive amounts of data, and use an algorithm to predict supply, demand and pricing movements.

The importance of access to Current Market information can’t be understated. Price drivers are changing in the increasingly complex wholesale electricity market, as it transitions towards a low carbon future.

The electricity grid requires synchronous dispatchable generation for reliability and stability, and while increasing levels of Variable Renewable Energy (VRE), mainly wind and solar are welcome, they don’t provide synchronous dispatchable generation that’s always available.

As a result of the increasing amount of VRE, the system is showing signs of stress, and these serious issues need to be addressed. In addition to reliability, the need for ancillary services to manage voltage and frequency is increasing.

There are certainly pricing concerns as generators are scheduled to retire from the aging coal fleet. There is also an increasing need for massive storage. All these issues have to be factored into future pricing forecasts.

Trading energy is an energy retailer’s core business. There are a number of different financial instruments available which can be employed to manage risk. If these risks are not properly managed a retailer could be forced into insolvency, as was the case with the energy retailers Jack Green and Go Energy.

Timing to the market is a lot more important than aggregation and size of load, as wholesale prices dictate offers because retailers cover their risks by hedging the load they win.

We upload market news on issues that will impact pricing onto our Market Information pages. We graph hedging and spot market prices in each region of the National Electricity Market (NEM), as well as prices in the WA Electricity Market (WEM).