LAVA has been invited by Ferranti to act as key note speaker at the Ferranti BOOST18 event. We brought market insights about Pricing & Sourcing in a world of irreversible transition towards green energy.
TOPIC 1: Renewable energy
In the past 15 years, concerns about the environment have arisen that have led, among other things, to the growth of renewable energy generation and the demand for more green, sustainable (or blue) energy. The uncontrollable nature of the renewable output makes it hard to match production to consumption. While some parties search to secure their profitability others search to save on their costs. When considering the decaying availability of budget coming from the authorities, grants can only disappear on the mid-long term while the grid costs are continuously rising. Matching offer and demand on a correct price for both, buyer and seller, is a challenge that could reach a societal level. LAVA has market experience and offers some insights on this topic, considering a few main points of view:
- Which is the optimal combination of renewable energy sources and storage, taking the consumption into consideration?
- How can an investor optimize his engagement in renewable production and storage?
- How can a supplier identify the customers for whom this combination makes sense, and which are these combinations?
TOPIC 2: Energy price
When an offer is made to a (large enough) B2B customer, a lot of attention is paid to the calculation of the energy price, taking into account a lot of parameters derived from the consumption pattern, itself priorly normalized, and risks characterization figures. Generally, once the contract is signed, no actualization is made on the original volumes either for the contract with fixations.
The fluctuating nature of the energy price in combination with the uncertainty about consumed volumes and consumption patterns (mainly the deviation from the offered volume) can quickly reduce the profit margin or result in a loss. Statistical analysis of the contract process & volumes, portfolio structure and product catalog make it possible to define the required frequency for the feedback loop necessary to secure benefits.
LAVA has market knowledge, considering the domain of activity and the acquired expertise of its consultants: in-depth knowledge of contracting, sourcing, allocation processes, data collection and cleaning, and analysis with statistical models.
TOPIC 3: Cloud solutions for Utilities
- Utility suppliers need IT systems to support their operations. They require systems to treat their customer’s contact info, billing, sourcing, credit collection and financial management, and this often for complex market interactions. There are many similar processes, but each supplier also tries to find its ‘niche’ in the market, its specific offer, whether it is a better price, a given customer segment, a specific product, a contract with better terms, suppliers all have needs for this dedicated ‘tweaking’ of their business offer and processes. Is this specificity compatible with a common cloud solution?
- LAVA has market experience and offers some insights on this topic, considering a few main points of view:
- Where do you find your supplier company in the utility market? What’s of importance for decisions on cloud solutions?
- What is the role of your Cost-to-Serve? Can you lower it using a cloud solution?
- Does it matter in which utility market you are? Which role does the complexity of your business play?
- What can you learn from completed cloud implementations?
Check www.lava- consulting.com for more details about our clients and partnerships.