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06.06.2024

Purchasing green electricity: energy buyers should be aware of these points

Green electricity. Energy purchasing. Energy platform

The procurement of green electricity is an important topic for many industrial, medium-sized and commercial companies as part of their sustainability strategy. The promotion of renewable energies and the energy transition are key focus topics for many companies, which is why we are devoting today's article to the procurement of green electricity and the points that energy buyers in companies should know about it. We look at the relevance of digital energy marketplaces and the importance of platform operators that bring companies and energy suppliers together efficiently and transparently in order to optimise the purchase of green electricity in the best possible way. We have summarised the most important questions and answers in the following article. At the end, we look at what you as an entrepreneur should consider when purchasing green electricity and what advantages digital platforms such as enPORTAL connect offer. A lot has happened in recent years, particularly in the area of energy purchasing, and in the context of digital processes, which makes working life easier for purchasers and offers more control and security when it comes to energy purchasing.

In the first part of our article, we start with typical questions and answers. How can green electricity be procured?

How does the procurement of green electricity work in the B2B sector?

Purchasing green electricity in the commercial sector is basically the same as purchasing grey electricity: a tender is launched and energy suppliers submit a price offer for the pure energy price of electricity generated from renewable sources. As with grey electricity, buyers should also take advantage of the great competition on the energy market, because with around 1,000 suppliers in Germany, there are significant price differences if as many potential suppliers as possible are contacted as part of a tender. With enPORTAL connect, up to 700 energy suppliers can be asked for a price offer - simply at the click of a mouse via the digital energy marketplace. Maximum competition means the best price at the time of purchase. Good to know and a finding from our daily practice: In most cases, it is also possible to "re-green" the electricity bilaterally if the decision was only made after the award/tender (subsequent purchase of green electricity certificates).

Are there other options for companies to purchase green electricity?

Yes, in addition to the traditional tendering process, there are two other ways for companies to purchase green electricity. For energy-intensive companies with high electricity consumption, the purchase or negotiation can also take place directly with the green electricity producer: With PPAs, Power Purchase Agreements, which are concluded directly with wind power or photovoltaic producers. Companies can also generate their own green electricity by installing their own generation plants (PV & wind).

How do energy supply contracts for green electricity differ from grey electricity?

Energy supply contracts for green electricity differ in that they guarantee that the electricity comes from renewable energy sources. To this end, the supplier buys corresponding certificates or supplies the green electricity from its own production with corresponding guarantees of origin (HKN). There is a wide variety of guarantees of origin and certificates, which is why we will not go into the various certificates in detail here. In principle, it is important for energy procurers to check on a case-by-case basis what requirements should be placed on the energy supplier and which verifications or certificates are required.

The most common certificates on our energy platform enPORTAL connect are e.g. Ok power, Grüner Strom Label e.V., TÜV Rheinland Standard/Renewable Plus, TÜV Nord, TÜV Süd, TÜV ee01, TÜV ee02, KlimaINVEST Ökostrom. The most common guarantees of origin are HKN Wasser EU, HKN Solar EU & HKN Wasserkraft.

How strong is the competition among energy suppliers in tenders for green electricity?

As we organise and support around 3,000 tenders for electricity supplies from conventional and renewable sources every year with enPORTAL connect, we can say that we have not noticed any significant differences. In some cases, there are suppliers on the German energy market that only offer green electricity, which means that competition for pure green electricity tenders can even be higher in some cases. With around 700 energy suppliers on our energy marketplace, we always find the best price on the market at the time of purchase.

Is green electricity more expensive than grey electricity?

Yes, green electricity tends to be more expensive than grey electricity. There were times when green electricity cost more than 1 cent per kilowatt hour more than grey electricity, but there were also times when the additional costs were 0.1 cent per kilowatt hour. With a consumption of 500,000 kilowatt hours per year (a typical medium-sized company), this amounts to a total of 1,500 euros in additional costs for green electricity.

In the following, we would like to explain what needs to be considered when procuring green electricity and what new opportunities digital processes offer.

 

What do I need to consider as a buyer if I want to purchase green electricity? You should know these points!

1. check the origin and type of green electricity

Check which guarantees of origin or certificates you need for your company and your sustainability strategy and whether the energy supplier provides or can provide these. These should match your company's sustainability goals.

With around 700 energy suppliers on the enPORTAL connect energy marketplace, you have a large selection of guarantees of origin and certificates at your disposal. As a buyer, you can specify which certificates you need as part of a tender and request them specifically from the suppliers. With our digital processes, you can inform all participating energy suppliers of your preferences with a single click, eliminating the need for time-consuming individual communication.

 

 

2. contract models

Check which contract model you want, whether fixed price, tranche, spot market or portfolio model and what special features are offered here in relation to green electricity.

For more than 15 years, the enPORTAL connect team has been supporting numerous customers from industry, SMEs and commerce in the selection of suitable contract models and the implementation of energy procurement. With over 3,000 tenders carried out every year, we are very familiar with the requirements and wishes relating to green electricity procurement.

 

 

3. costs and profitability:

Take advantage of the strong competition on the energy market among green electricity providers and compare pure energy prices. Green electricity can vary depending on the market situation and availability, so it's worth comparing offers from different providers to find the best value for money.

With enPORTAL connect, you automatically see all price offers and ancillary components (tolerance band, taxes, levies, surcharges) listed clearly after a tender. You can see at a glance which energy supplier is offering you the best price and the best conditions. This allows you to decide in favour of a supplier within a short commitment period and automatically reduces the suppliers' risk premiums. You benefit from the best energy price at the time of purchase.

 

4. monitoring of consumption

Check your energy consumption and find out whether you can take any efficiency measures to reduce consumption and offset the additional costs of green electricity, which tends to be more expensive.

With the enPORTAL connect energy platform, you can see all your consumption points and energy consumption figures transparently and up-to-date at all times. You no longer have to worry about updating consumption manually, but can see your company's latest consumption status after logging in - along with the costs incurred and ancillary components. At the same time, this data evaluation gives you a better understanding of optimisations (e.g. avoiding peak loads by shifting consumers on your periphery).

 

 

5. take advantage of favourable purchasing times on the market

Always keep your energy consumption data up to date and tender immediately when the exchange prices are low. This allows you to offset any additional costs due to higher green electricity prices.

With enPORTAL connect, your energy data is always up to date and you are kept informed about exchange developments on the electricity market according to your individual requirements (target prices). This allows you to identify favourable purchasing times and, with our energy price forecast, you can immediately see how much energy costs would likely be incurred in the event of a tender. This makes it easier for you to decide to launch a market enquiry and obtain green electricity offers from the 700 or so energy suppliers on the energy marketplace.

 

6. energy expertise

A professional energy expert can help you find the best way to purchase green electricity and inform you about technical and market-specific aspects.

At enPORTAL connect, this task is performed by a personal account manager who knows the individual requirements of your company and contributes their professional energy expertise. As an energy buyer, you have a partner at your side who knows the needs of other companies in your sector and the requirements of the energy market inside out - you benefit from our broad network expertise and direct connection to the energy market.

 

Advantages and disadvantages of purchasing green electricity at a glance

 

 

Advantages of procuring green electricity

 

1. opting for green electricity can be an important part of your sustainability strategy and show that your company actively assumes environmental responsibility. Purchasing green electricity should be in line with your company's sustainability goals. This can improve your corporate image and strengthen the trust of customers and stakeholders.

 

2. competition in green electricity tenders is sometimes higher than for grey electricity. As a result, you benefit from a high level of competition among energy suppliers and the best energy prices at the time of the market enquiry.

 

3. digital platforms and energy marketplaces make it easier to find a suitable supplier that guarantees the company's sustainability goals. The entire process of switching from grey to green electricity is done with one click and no longer represents a major effort for your company

 

 

Disadvantages of green electricity procurement

 

1. tendering for green electricity requires a detailed examination of the various certificates that match the company's sustainability goals. This may require some research and effort, but is quickly done when processing the tender and drafting the contract with platforms such as enPORTAL connect, as the most common certificates are available or can be queried as part of the tender.

 

2. green electricity still tends to be more expensive than grey electricity, but these additional costs pay off at the same time through your commitment to the environment and your support for the energy transition.

 

 

"We are seeing more and more companies switching to green electricity and driving forward the energy transition. The good news is that many energy suppliers are also promoting this and in some cases offering exclusively green electricity, which stimulates competition and leads to the best energy prices when purchasing for sustainability-conscious companies. Those who utilise digital, efficient processes and the strong competition on the energy market can partially offset the additional costs for green electricity.

 

Clemens Graf von Wedel, owner and managing director of enPORTAL GmbH

 

 

 

 

 

Conclusion: Switch to green electricity quickly with digital platforms

Through careful planning and consideration of these factors, companies can ensure that the switch to green electricity makes both ecological and economic sense. It became clear that digital processes and platforms help to make the purchase of green electricity simple and thus successfully drive forward the energy transition with just one click.

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