A perfect storm
On the global stage, things are conspiring to make 2022 a memorable year for energy suppliers, and not in a good way… Climate change, the pandemic, war in Ukraine, sanctions on Russia, European dependency on Russian energy – all of these are coming together in a perfect storm to make life more difficult, complex and expensive for suppliers and consumers.
The impact of climate change, and business commitment around the globe to a net zero carbon future, has seen traditional fuel suppliers and sustainable fuel suppliers square up to each other, in a inflexible 2D scenario whereby fossil fuels equal bad and green energy equals good.
The complex picture
Unsurprisingly, the picture is considerably more complex than the media, green suppliers and climate change activists would have us believe. At a time when global demand for energy is at an unprecedented high, the unpalatable truth is that sustainable energy sources simply cannot meet the increasing demand. In fact, by 2050, around 50% of our energy supply will still come from fossil fuels.
Traditional energy suppliers have largely embarked upon a process of transformation – digital and otherwise – to move towards a greener, more sustainable supply. Some are straddling the gap between fossil and green fuel supply and reinventing themselves as they make sustainable investment a key part of their economic strategy.
A future of volatility and risk
So far, so good. Enter COVID-19. Disrupting supply chains and choking off demand, the pandemic wrought absolute havoc on the global energy market. Do you remember filling your car when fuel was less than a pound a litre? Those halcyon days… COVID was a wake-up call for many businesses around the globe to prepare for a future of further volatility and risk, not least for energy and utilities. Strategic thinking and resilience was clearly going to be the difference between those businesses that survive and businesses that do not.
A change in strategy would enable businesses to wrest back control over the fortunes once the darkest days of the pandemic subsided. Or so we thought. Putin had other ideas. The invasion of Ukraine has pulled the rug out from under the feet of even the best prepared, most resilient, most agile of suppliers.
A market like no other
Today, the landscape is complex, fractured, shifting. Sanctions on Russia see prices in an already volatile market shoot up, and with no end to the war in sight, there’s talk of the conflict dragging on for months. Even when the war does come to an end, traditional global agreements, traditional supply chains and traditional market demands will have changed forever. Heavy European dependence on Russian energy has to change – whether driven by Russia demanding payment in roubles and shutting off supply, or by European countries reluctant to swell the coffers of the war machine. The UK and the US – traditionally less dependent on Russian energy – are still fundamentally affected by global events. There’s talk of fracking, of opening up new and abandoned oil fields, of speeding up investment in wind, wave and solar. And every consumer is facing price increases in fuel supply – for home, for work, for travel – of hundreds of per cent.
Addressing the challenges
What does this mean for domestic energy suppliers? Well for some it’s the end. Some are being subsumed into competitor suppliers. Some are struggling to stay afloat as customers walk. The regulator is busier than ever as the government seeks to ensure that consumers are afforded some degree of protection during what seems like uncontrollable price increases.
All of this brings the perfect storm closer to home. Energy suppliers are creaking under the strain of the paperwork that accompanies this volatile complex market. New contracts, renewed contracts, expired contracts – all of these require on-going management in a stable market. Today as companies expire or merge, the situation is further complicated by on boarding of new or acquired staff, different kinds of customer billing and new homecare agreements.
Contract management software for the energy industry
What can you do to address these new contractual needs? Well you certainly can’t take your eye off the ball when the market is changing daily. Smart contract management solutions offer automated compliance, advanced analytics and real time contract visibility to help you manage admin, support your new and existing customers and keep abreast of compliance requirements.
Four Business Solutions offer Contract Insight, energy and utilities contract management software which helps suppliers with document management, contract drafting, reports and analytics, tracking, workflow and contract negotiation. If you want to maximise your business agility, your contract and your ROI in this volatile market, Four can help by bringing your entire contract ecosystem onto our contract management platform.
Why not get in touch? We’d be delighted to help.