Eskimo Ice / Ice Club
The client was interested in purchasing energy in a more flexible manner but they were also keen to create medium term budget stability.
Mindful Energy spent a lot of time with the Leadership Team to understand the business drivers, pressures and objectives while providing information on the supply contract products available. This enabled Mindful Energy to better understand the requirements and put in place the most appropriate strategy.
The Results
Mindful Energy ran a fixed price reverse auction (what is a fixed price auction?) to provide an accurate renewal budget to assess the clients appetite. 9 suppliers participated bidding 24 times during a live and time constrained auction. The bidding and rebidding encouraged supplier margin erosion, resulting in offers delivering savings of over 35% /£484k.
Despite the potential additional rewards of purchasing more flexibly over a longer term, the risk/reward ratio wasn’t attractive enough enough, so the client fixed their renewal, delivering an estimated annual saving of c£484k.
Additionally, Mindful Energy was able to negotiate 60/140% volume tolerance (VT) threshold with the winning supplier, massively reducing the Take or Pay risk exposure.
Last but not least, the winning suppliers’ offer included 100% auditable renewable energy (REGO) at a reduced premium, helping Ice Club meet their sustainability objectives.
Summary
The client was extremely happy with the results of this auction. A significant saving, 100% renewable energy and wide VT clause of 60/140% enabled Eskimo Ice to meet all of their pre tender objectives. We are proud to have supported them on this process.