A "Standard Model" has emerged for B2B energy contract pricing, which hinges on competitive pricing of fixed-price, fixed-tem contracts through a competitive tendering process. This brief presents Datamonitor's analysis of the Standard Model, including actionable recommendations based on the current best practice in the model's implementation and on a discussion of its inherent limitations.

• Analysis is based on Datamonitor experts' many years' work in the area of energy utilities generally and of energy procurement in particular.
• Reflects in-depth telephone interviews with high-level utility executives in leading EU energy markets, such as the UK, Germany, Sweden and Austria.
• Supported by a survey of over 2,000 UK major energy buyers conducted over the last 12 months, and by similar earlier surveys in other key EU markets.


Highlights



The key to profitable B2B pricing is risk allocation that reflects both the supplier's and the customer's risk profiles. If applied correctly, the standard pricing model does that for many categories of customers.





However, the Standard Model rests on some strong assumptions about the customer's energy usage, which will come under increasing pressure as markets become more volatile and large customers grow more sophisticated.



Reasons to Purchase


• Understand the main trends in the area of B2B energy pricing and what they mean to your company's profitability.
• Gain insight into the current best practice as revealed by key industry executives in some of western Europe's leading utilities.
• Assess the actionable recommendations developed by Datamonitor experts in light of your company's special circumstances, and apply them appropriately.