Throughout the retail energy sector, traditional operating models are being challenged and margins from business and commercial consumers are being squeezed. Retail energy regulation is introducing more transparency into energy pricing and utility billing is putting micro-businesses on a similar footing to residential customers in terms of access to data. The business model for SMEs is changing: as annual renewal processes are becoming increasingly competitive and increasing numbers of customers are choosing to switch, traditional customer bases are being eroded.
Larger firms are engaging directly with upstream suppliers, and many are developing their own generation capacity. Energy collectives and the aggregator model are growing in popularity among smaller customers, while self-supply is attracting interest from major players.
Baringa’s energy retail consultancy is helping utilities tackle these commercial challenges in a variety of ways. Knowledge of the integrated energy value chain is key and our industry experts deliver strategies to optimise margins, cut margin leakage and improve energy forecasting. We design and deliver programmes that create operational excellence and efficiency to shave costs and have designed incentive schemes to encourage reduced consumption among business customers, ensuring they remain with their current supplier. We also work with energy suppliers to reduce their non-energy costs through optimised triad avoidance.
Baringa also brings its expertise from financial services and has used this in a variety of different contexts, for example to help utilities develop programmes that enhance revenue from each customer while reducing both the cost to serve and cost of acquisition.