Most energy procurement strategies are well run but still underperform.
Contracts are structured correctly. Risk is managed. Governance is in place. Yet costs remain volatile and savings plateau.
The problem isn’t how energy is bought. It’s what procurement is being asked to optimise around. Procurement strategies focus on contracts, pricing and timing.
The missing piece is rarely found in procurement at all. It sits in sustainability and operational decisions that are usually treated as separate initiatives. When on-site generation, energy efficiency, demand reduction, flexibility and timing are planned alongside procurement, they change the baseline against which procurement is optimised, improving outcomes.
A standard energy procurement strategy is designed to manage price risk and provide budget certainty in volatile markets. In isolation, it does this well. Most strategies focus on:
Procurement model
Fixed, flexible or hybrid purchasing approaches based on risk appetite.
Market timing
Buying energy in tranches or at specific points to manage exposure.
Contract structure and length
Balancing price certainty against flexibility.
Governance and controls
Clear approval processes and defined decision rights.
Supplier selection and diversification
Managing counterparty risk and service quality.
These are all essential components of effective energy procurement. They help organisations avoid unnecessary exposure to market swings and provide a level of cost predictability.
With fixed charges projected to make up around 45% of non-wholesale costs by 2028, the scope for optimisation through buying strategy alone is narrowing.
What most procurement strategies still don’t address is how much energy is needed in the first place, or how sustainability and operational initiatives could reduce reliance on the grid, improve efficiency, or change demand and flexibility before a contract is signed. That distinction matters. It’s where many procurement strategies reach their natural limit.
Most energy procurement strategies are built on the assumption that demand is fixed. That assumption has rarely held true in energy markets.
This data from Ofgem shows the fluctuation in UK wholesale energy prices for gas and electricity from 2021 to late 2025. They show that in summer 2023, gas prices were 500% lower than they were 12 months prior. Electricity prices mirror this fluctuation almost exactly.
Assuming an average mid-sized UK company’s energy usage is around 5 GWh electricity per year and 10 GWh gas per year, a combined bill could swing by over £3 million per year. This obviously ignores other costs, such as network charges and supplier margin, but it illustrates the dangers of assuming a stable market.
When demand ignores these fluctuations and is treated as static, procurement can only optimise around contract structure and timing. It can reduce exposure with reactive measures, but not eliminate it. It can smooth volatility, but not fundamentally change the cost base.
What’s missing is a strategy that actively changes the conditions procurement is working with. Until demand, flexibility and operational decisions are actively planned, even the most sophisticated energy procurement strategy will always be reactive rather than strategic.
Changing the baseline procurement is working with requires levers that sit outside contracts and pricing. This is where sustainability, treated as a commercial discipline rather than a reporting exercise, comes into play.
Energy efficiency reduces overall demand. Flexibility shifts consumption away from the most expensive periods. Both give procurement teams more options when contracts are structured and renewed.
Reducing demand before a contract renewal, for example, changes reliance on the grid and lowers overall procurement cost exposure. Improving flexibility reduces exposure to peak pricing and non-commodity charges. Both effects make procurement outcomes more predictable, regardless of market conditions.
In practical terms, an effective sustainability strategy can give procurement teams more control over the variables that drive cost and risk, rather than asking them to manage volatility solely through contract structure and timing.
So how does this work in practice?
Procurement teams improve outcomes not by changing how they buy energy, but by changing the conditions under which those decisions are made.
Here’s what that looks like in real life:
Energy efficiency is often treated as a sustainability initiative. In practice, it is one of the most effective ways to improve procurement outcomes.
Reducing demand before a contract renewal:
Lowers the volume procured
Reduces future energy costs
Reduces exposure to future price swings
When efficiency is delivered after renewal, much of that leverage is lost.
A disproportionate share of procurement cost comes from peak demand and inflexible usage.
Operational changes that smooth peaks or shift load:
Reduce exposure to the most expensive periods
Lower capacity and non-commodity charges
Improve budget predictability
Even limited flexibility can materially reduce risk in volatile markets.
Onsite generation, storage and flexibility projects deliver the most value when they are aligned with procurement strategy.
When planned properly, these assets:
Reduce exposure to wholesale price swings
Provide optionality at renewal
Support longer-term cost control
Installed in isolation, they often underperform. Integrated with procurement planning, they become commercial risk-management tools.
Procurement strategies often assume demand and infrastructure are fixed. In reality, timing matters.
High-performing organisations:
Prioritise efficiency and demand reduction first
Align larger investments with procurement windows
Phase delivery to manage risk and cash flow.
The same action can deliver very different outcomes depending on when it is taken, which is often the difference between a sustainability initiative that stalls and a sustainability business case that gets approved.
Each of these approaches reduces how much energy is exposed to volatile markets. That makes procurement outcomes more predictable and less dependent on timing the market perfectly.
This is where sustainability stops being an add-on and starts functioning as part of a robust energy procurement strategy.
Additional resources: Check out this article to learn how True Group helped drive efficiency via sustainability in one of Europe’s most complex energy portfolios.
In most organisations, procurement and sustainability are working toward related goals, but on different timelines, with different inputs and different pressures.
Procurement teams are focused on contract cycles, market conditions and budget certainty. Sustainability teams are often focused on targets, reporting and longer-term initiatives, with limited reference to contract cycles or commercial timing.
That separation means the actions that change demand and flexibility are rarely sequenced around the moments procurement decisions are made. The result is predictable:
Sustainability initiatives are planned without reference to contract timing
Procurement is brought in late, once key decisions are already made
Opportunities to reduce demand or improve flexibility before renewal are missed.
This isn’t a capability problem. It’s a coordination one.
When sustainability sits after procurement, it has limited influence on outcomes. When it’s planned alongside procurement, it changes the timing, sequencing and commercial impact of decisions. That creates far more value.
That alignment is what turns sustainability from an adjacent initiative into a core part of a strong energy procurement strategy.
Bringing Sustainability and Procurement Together
Procurement teams are expected to manage cost and risk in volatile markets, but without control over demand, flexibility or operational change, there is a hard limit to how far buying strategy alone can go.
When sustainability is designed as a commercial strategy and planned alongside procurement, it strengthens decision-making rather than competing with it, positioning sustainability as a competitive advantage rather than a cost. Reducing demand, improving flexibility and sequencing actions around procurement windows makes costs more predictable and reduces exposure to volatility.
This is where joined-up planning matters. Aligning sustainability and procurement gives organisations control over the variables that drive energy cost and risk, rather than relying on timing the market alone.
True Group helps organisations make that shift. By bringing sustainability planning, energy procurement insight and forecasting together, procurement strategies move from managing volatility to actively reducing it.
If your energy procurement strategy feels well run but underpowered, it may not be failing. It may simply be missing a piece.
See how joined-up sustainability and procurement planning reduces cost and risk.