At Leading Energy, we always say that market timing is top trump when trying to secure the best electricity rates available, and a perfect example is Devitt Wholesale Meats Pty Ltd.
Many businesses are under the impression that they cannot forward purchase electricity when they already have a contract in place.
This is absolutely not true.
We are constantly plugged into the market and when we see that futures prices have fallen below a certain level, we advise our clients to act fast and strike while the iron is hot because market timing is key to secure the best electricity rates on the market.
How did Devitt Wholesale Meats benefit?
We first engaged with Devitt Meats in 2019 to guide them through the procurement and installation of a rooftop solar array.
March 2020 we were back in touch to review their electricity contract, which was in place until January 31, 2022.
Right in the middle of the COVID restrictions, our monitoring team tracked electricity prices and in June 2020, we saw that they had hit rock bottom prices that were too good to be missed!
We contacted Devitt Meats and told them that they could secure a really good deal if they requested offers for the calendar years 2022, 23 and 24.
Although Devitt’s contract would not run out for another 18 months, they immediately recognised the opportunity and secured rates of $55/MWh.
Most businesses that have a contract ending January 31, 2022, would typically renew that contract a week or two before.
Had Devitt Meats done this, they would have been contracting when prices were around $75-85/MWh and would not have benefitted from the best electricity rates on the market.
Caption: A shows where Devitts’ entered the market and B shows where prices are now
This means that Devitt Meats is paying roughly $20&$30/MWh (2-3c/kWh) for peak and off-peak consumption, less than if they had waited.
To put this into context, on an annual basis, they are paying $4,000 less because they acted in June 2020 than if they acted in January 2021.
“Leading Edge Energy has really helped our business make some substantial savings. The solar installation has saved us thousands of dollars and the ROI will only increase in the future. In addition, we have secured energy rates that are far more favourable than if we had waited around. Super team, super service” – Kell Driver, Managing Director Devitts Meats