Energy firm made £3.5m out of low oil prices

RECORD low oil price is being credited with a 135% sales spike at a North West energy procurement specialist.

Businesswise Solutions, based at Nelson in East Lancashire, recorded sales of £3.5m in 2015 – up from £1.5m in the previous 12 months.
 
Managing director Frazer Durris said the record growth was down to companies taking advantage of the 12-year low oil prices by forward buying their energy up to five years ahead.

Businesswise Solutions celebrated its fifth birthday in 2015 and has entered an exclusive deal with DONG Energy, which has made it easier for businesses to buy their energy in advance.

Durris said: “The canny businesses have seen the price of oil fall as low as $28 a barrel and, with our support, acted upon it.

“During 2015 alone we secured £3.3m of forward savings for our customers and we expect this figure to increase significantly as we move into 2016.”

“Our sales book has gone up by 135 per cent in 12 months and that’s down to a lot of reasons,” he said.

“Clearly seeing the cost of a barrel of oil reach $28 has been a significant factor and prompted customers to ring fence their future energy requirement at these historically low prices.

“We’ve also launched a new online portal called UTILITYi, which enables customers to see their energy consumption in real-time on an easy-to-read dashboard. That has helped us move into bigger markets.”

The 39-year-old entrepreneur compared procuring your energy to getting a mortgage. “When you go for a mortgage you can go for a variable rate but you’re subject to the vagaries of the market,” he said.

“The alternative is you can fix the price for a number of years. The falling oil prices have convinced businesses that now is the best time to fix their energy supply and give them budget stability.

“I’ve worked in the energy market for a long time and we’ve never seen oil drop so drastically and over such a long period of time as this. What’s unusual is we’re not getting any short-term spikes when the price goes up. The price is either flat or falling.”

Durris said the exclusive partnership with DONG Energy was hugely significant because they’re the UK’s second largest supplier of gas to the industrial and commercial sector.

“It enables us to take a new product to our clients, allowing them to forward buy their energy until 2021 and fix the price,” he explained.
 
“As part of the deal with DONG even businesses WHICH are currently getting their energy supply from someone else can forward buy their future energy until 2021 providing their existing contract finishes no later than the latter part of 2018.
 
“To secure a partnership with DONG Energy reflects our entrepreneurial approach.  Ultimately we’ve delivered by putting the deals on the table.”