£ 0.00 m

saved over 3 years

0 %

Renewable energy

0

Meters under management

The relationship 

Equity Energies and Peabody, a prominent housing association that owns and manages over 66,000 homes across London and the South East, have worked together since 2020. We first started working together when they sought to enhance their energy procurement and management practices for their offices, housing stock, communal lighting, and landlord supplies. With around 4,400 gas and electricity meters consuming over 97 GWh of gas and power a year, they wanted to minimise cost and achieve best practice with their energy procurement strategy. 

The challenge 

Peabody’s initial challenge was to secure new energy contracts during the COVID-19 pandemic. Having assessed various frameworks in the energy market, they were curious about the value, services, and innovations that other OJEU frameworks could offer. 

The solution 

Using our Dynamic Purchasing System framework, we were able to deliver a transparent, OJEU compliant procurement process, with 15 different suppliers competing for the contract. Having secured new contracts for Peabody at the height of the pandemic, we then set about developing a long-term energy procurement strategy with them. 

Six months from their contract renewal (April 2021) the wholesale markets were considered by many to be overpriced. However, following a long winter that resulted in European gas storage reaching record lows, eEnergy was aware that there were still significant risks of further price rises over the summer that would result in increased costs for Peabody. Therefore, Equity Energies engaged with Peabody early to ensure they understood the risk of delaying their renewal, how this would impact their budgets, and how much additional risk they were prepared to take. 

Equity Energies and Peabody agreed that the risks of increases were too high and budget certainty had to be prioritised. Despite increases in prices from the lows seen during lockdowns, wholesale prices at the time still represented good value in historical context as prices had only been cheaper on three exceptional occasions (the financial crisis, oil price war, and COVID-19 lockdowns). 

Market backwardation (where wholesale prices are cheaper for periods further ahead) provided an opportunity to offset the expected increases in environmental taxes and levies in future years. Peabody therefore locked in their gas and electricity contracts to give the group long-term price certainty. 

Electricity and gas prices subsequently exploded to unprecedented levels, however, Peabody was not impacted by this as they took proactive steps to protect their budgets. Had Peabody waited to renew their contracts they could have ended up paying £54m more for the same volume of wholesale electricity and gas. 

“Equity Energies’ close engagement and risk management advice has helped us manage our budgets and protect us from adverse rises in energy costs.”

Richard Ellis – Asset Director, Peabody.

The results 

  • £8.6m saved over 3 years through proactive risk management strategies. 
  • Secured 100% renewable electricity contracts with no additional premium. 
  • 2 year budget certainty for all sites within the portfolio. 
  • 15 different energy suppliers engaged as part of the tender process. 
  • 4,400 meters under management.