We can never emphasise enough the power of market timing when future contracting for wholesale electricity.
Ewen explained that even though Astor still had two years to go on their contract ending in July 2022, they could still forward purchase electricity.
After discussing the matter with Ewen, Managing Director Neil Henderson decided to lock in rates of 5c/kWh for 2022-2023 two years in advance.
If Astor had gone on with business as usual, they would soon be requesting quotes for their next contract.
What would they receive in current market conditions? They would receive quotes from retailers that are more than double what they were offered back in 2020.
Effectively, future contracting saved them 6-7c/kWh, a 21% saving equivalent to about $25,000 per annum. This is the power is in market timing & future contracting.
To put this into context, Astor Industries is expected to save $50,000 over the next two years as a result of forward purchasing energy at the right time.
“If we had not taken Ewen’s advice back in 2020 to forward purchase electricity for the next two years, we would have ended up paying double what we are paying now.” – Neil Henderson Managing Director.