We’re all familiar with the idea of an auction, particularly a property auction. You know, where people stand around with a group of strangers and nervously place their bids in the hope of securing their dream home. These auctions are, of course, designed to secure the highest possible bid. So it stands to reason that a reverse auction is designed to achieve the exact opposite: the lowest possible bid.
Energy Action is an independent energy partner for over 7,000 clients; a pioneer in reverse energy auctions. For over 20 years, we’ve used our smart technology and data-led insights to drive down prices and deliver substantial energy cost savings for businesses across Australia and beyond. As in any other area of business, competition is the core driver of price. So how does a reverse auction work? Here’s a quick overview.
To ensure we’re comparing apples with apples, Energy Action first gathers your organisation’s energy data and information – across all your sites if you have multiple NMIs – to ensure the bidding retailers know precisely what your energy needs are. It’s so much easier, faster and less time consuming that sending out traditional RFPs.
Before your auction day, retailers are invited to register their interest. We ask those that do to prepare a “bidding plan”. Through this, they can see the prices they have to beat on auction day – a great incentive for them to go lower. Invariably, a range of energy retailers will bid, and may include well-known brands such as AGL, Energy Australia, Origin Energy and Shell Energy.
Reverse auctions are fast – just 10 minutes, in fact. (The only exception being if a bid is received in the final 3 minutes, which triggers an extra 5 minutes.) The great thing is, you get to watch live as the energy retailers bid for your business. On average, we usually see a 20% decrease between the first and final bids.
Reverse auctions provide energy quotes across different timescales. Usually 24 or 36 months, but it can be as much as 48 months, depending on our specialist’s recommendation. As Energy Action has a complete and up-to-the-minute view of the market, the timing of your auction can be driven by our energy professional’s expert advice. Whatever the auction outcome, locking-in your energy costs over the long-term will be invaluable to your bottom line.
When the auction has concluded we’ll prepare a detailed comparison report for you. The report will contain pricing and commercial information, and a recommendation from our Account Manager. Ultimately though, the choice of energy retailer is down to you. Once you’ve made your choice we’ll help you to transfer to your new retailer.
Smarter, faster and more price-competitive, a reverse energy auction gives your organisation the opportunity to substantially reduce your energy costs and lock-in long-term pricing. That can only be good for business.