What Does a Business Energy Broker Do?
Energy costs remain one of the largest overheads for many UK businesses and, with over 50 business energy suppliers to choose from, varying contract terms and fluctuating wholesale energy prices, identifying the right contract can quickly become time-consuming and overwhelming.
Many UK businesses are turning to business energy brokers to simplify the procurement process, save valuable time and gain expert support when comparing, securing and managing their commercial energy contracts.
So, what does a business energy broker actually do? In this guide, we'll explain how brokers support businesses and why recent statistics show that over 80% of UK business energy contracts are now arranged through brokers.
What Is a Business Energy Broker?
An energy broker, sometimes referred to as a Third Party Intermediary (TPI), is an intermediary that helps businesses compare, procure and manage commercial energy contracts.
By understanding your business requirements and comparing options from a panel of suppliers, the objective of a broker is to help you save time, maximise value and secure the best possible outcome for your business.
How Can a Business Energy Broker Help?
Although every broker offers a slightly different service, their role generally falls into three key areas: Energy Procurement, Energy Management and Market Insight.
Energy Procurement
Energy procurement is about finding the right contract for your business at the most competitive price. Rather than approaching a single supplier, an energy broker compares options from a panel of trusted providers, evaluating contract terms, pricing structures, renewable energy solutions and service levels to identify the most suitable agreement. By managing the procurement process on your behalf, they help secure a competitive contract that aligns with your business needs while saving you time.
Energy Management
For many businesses, the relationship with an energy broker doesn't end once the contract has been agreed. Ongoing support and account management can significantly reduce administrative time by providing a dedicated point of contact for supplier queries and issue resolution, saving hours spent on hold or chasing suppliers yourself.
Ongoing billing support helps ensure unnecessary costs don't go unnoticed. From auditing invoices for billing errors and reviewing agreed supply capacity (KVA) and non-commodity costs, proactive energy management helps ensure you're paying exactly what you should for your energy.
Market Insights
Working closely with an industry expert provides valuable market insight that many businesses would otherwise find difficult to access. By monitoring market trends, supplier developments and procurement opportunities, brokers can help businesses make informed decisions about when and how to secure their next contract. For larger businesses, usage analysis and consumption trends can also provide valuable insight into future procurement decisions.
Energy Broker vs Energy Consultant
Although the terms are often used interchangeably, there are some key differences between an energy broker and an energy consultant.
An energy broker is primarily focused on procuring energy contracts, comparing prices from their supplier panel and securing competitive agreements on behalf of their customers. They are typically commission-based, with their remuneration often incorporated into the customer's energy rates and paid by the energy supplier rather than directly by the customer.
An energy consultant generally takes a broader, more strategic approach than an energy broker. They are often fee-based, providing independent advice on procurement strategy, energy efficiency, budgeting, carbon reduction and long-term energy management. Rather than focusing solely on procuring energy contracts, consultants analyse a business's energy usage and consumption patterns to identify opportunities to improve efficiency, reduce costs and support wider sustainability objectives.
Things to Consider When Choosing a Broker
Supplier Panel
Not every energy broker compares the same range of suppliers. While some work with an extensive panel, others only have access to a limited number. It's important to understand the range of suppliers a broker works with, as this determines how much of the market they can compare on your behalf.
Ongoing Account Management
For many businesses, the value of a broker extends beyond securing a competitive contract. Consider whether they provide ongoing support throughout the contract term, including assistance with supplier queries, billing issues and account management.
Transparency
A reputable broker should be clear about how they are remunerated, the suppliers they work with and the services included. Understanding this from the outset helps you make an informed decision and ensures there are no unexpected surprises later.
Industry Experience
Commercial energy is a complex market. Working with an experienced broker who has extensive market knowledge and understands procurement strategies, supplier processes and market trends can provide valuable guidance when making important energy decisions.
Final Thoughts
Choosing the right business energy broker is about more than simply comparing prices. It's the level of knowledge and industry experience, supplier access, transparency and ongoing account management that sets the best brokers apart.
Whether you're approaching a renewal, moving into new premises or reviewing your existing arrangements, working with a broker can help simplify the procurement process, reduce administration and ensure you secure the best-suited energy contract for your business.
As an independent UK business energy broker, Shoto Energy helps businesses compare, procure and manage commercial energy contracts with confidence. If you'd like to discuss your energy requirements or arrange a no-obligation review of your current agreements, we'd be happy to help.