Energy procurement plays a pivotal role in managing costs, reducing risk, and meeting environmental targets. Yet, many organizations fall into common traps that can lead to higher expenses, missed opportunities, and misalignment with broader business goals. Whether you’re new to energy procurement or looking to refine your strategy, here are 10 common mistakes—and how to avoid them.
1. Focusing Only on Price
The Mistake: Selecting the lowest-cost energy option without considering contract terms, risk exposure, or long-term impact.
Avoid It: Look beyond price. Evaluate supplier reliability, contract flexibility, and the potential for cost volatility. A slightly higher rate may offer better risk protection or sustainability value.
2. Ignoring Market Timing
The Mistake: Waiting too long—or acting too soon—to lock in energy rates without understanding market conditions.
Avoid It: Monitor energy markets regularly or work with a trusted advisor who can help identify favorable timing windows. Procurement should be proactive, not reactive.
3. Overlooking Contract Details
The Mistake: Signing contracts without thoroughly reviewing terms like bandwidth clauses, termination penalties, or hidden fees.
Avoid It: Conduct a detailed contract review with legal and procurement teams. Even small print can carry significant financial or operational consequences.
4. Not Aligning with Corporate Goals
The Mistake: Making procurement decisions in isolation from sustainability, risk management, or financial planning goals.
Avoid It: Align energy procurement strategies with broader corporate objectives, including emissions reduction, ESG performance, and budget certainty.
5. Failing to Diversify Energy Sources
The Mistake: Relying on a single supplier or sticking to one type of energy product.
Avoid It: Consider a diversified energy mix, including fixed and index products, renewable energy options, and demand response programs to improve resilience and control.
6. Neglecting Data and Analytics
The Mistake: Making decisions without understanding energy usage patterns or historical data.
Avoid It: Use energy management systems and procurement analytics to identify trends, set baselines, and forecast future needs more accurately.
7. Delaying Renewables Integration
The Mistake: Postponing the move to renewable energy due to perceived complexity or cost.
Avoid It: Explore sustainable energy procurement options like RECs and green tariffs. These can support corporate climate goals while managing long-term costs.
8. Missing Stakeholder Collaboration
The Mistake: Keeping energy decisions siloed within procurement or facilities teams.
Avoid It: Involve stakeholders from sustainability, finance, legal, and executive leadership. Cross-functional input leads to smarter, more aligned procurement choices.
9. Underestimating Regulatory Risk
The Mistake: Failing to account for changing energy regulations or carbon compliance requirements.
Avoid It: Stay informed about policy developments and consult experts who can help you build regulatory flexibility into your procurement strategy.
10. Not Reviewing Contracts Regularly
The Mistake: Setting contracts on autopilot and missing opportunities to renegotiate or improve terms.
Avoid It: Regularly assess your contracts and procurement strategy against market conditions, company growth, and evolving goals.
Partner with Environ Energy for Better Results
Avoiding these mistakes requires awareness, preparation, and the right guidance. At Environ Energy, we help clients build energy procurement strategies that balance cost, risk, and environmental impact. From market analysis to sustainable energy procurement, our team ensures your energy decisions support both today’s operations and tomorrow’s ambitions.
