Auto parts manufacturer engages NUS to develop a strategic energy risk plan to better manage risks
7 Jan 2021
With NUS's support, the manufacturer implemented a comprehensive Strategic Energy Risk Plan and achieved over 1.2 million PLN in Savings through flexible procurement.
An automotive parts manufacturer engaged NUS Consulting group to evaluate its electricity purchase strategy for Poland.
The client’s annual electricity consumption is approximately 40 GWh. However, it has only been purchasing electricity in the traditional fixed-price agreements, although suppliers have expanded the types of supply contracts offered to commercial and industrial consumers.
NUS Polish team analyzed the client’s electricity consumption profile, including peaks and off-peaks throughout the year. NUS advised the client to change its risk management strategy by diversifying price risks and limiting risk exposures. NUS collaborated with the client to create a detailed Strategic Energy Risk Management Plan (SERP), which clearly sets out the client’s risk tolerance and procurement objectives, the minimum required hedge levels, caps and trigger prices and purchase authorization protocols. Once the client’s board approved the SERP, NUS closely followed the SERP to execute transactions. As part of the strategy implementation, NUS issued tenders to select suppliers and negotiate terms of energy contracts on behalf of the client, focusing on all mandatory charges, suppliers’ margin and other essential non-pricing clauses. After selecting the most competitive supplier, NUS executed hedging transactions according to the SERP based on the client’s authorization. As a result, with this new approach, the client secured substantially better electricity prices and realized savings over 1.2 million PLN.
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