The Consultus International Group make big savings for London Gatwick Airport after taking over long-term strategies for their energy requirements.
London Gatwick is the UK’s second-largest airport and handles over 45 million passengers, per year, transporting them to more than 200 worldwide destinations.
As a vital part of national infrastructure, keeping the most efficient single-runway airport in the world running, along with its support mechanisms, is an absolute must.
The airport runs on two principal energy sources – electricity and natural gas. Its annual use is 125-gigawatt hours of electricity and 45-gigawatt hours of gas.
London Gatwick has set Net Zero Scope 1 & 2 carbon targets, for 2030, so are interested in renewable sources of energy, along with cost control and value for money.
Consultus were selected by London Gatwick, in early 2022, to provide a range of services.
This provided included procurement of supply contracts, risk management of energy and UKA carbon, invoice validation, cost forecasting and accruals.
Gatwick were able to benefit from a specialist mobilisation process, which has been designed to onboard the client to all of the required services.
Consultus’ Bureau Services team are on hand to assist Gatwick with invoice validation, quarterly cost forecasting and monthly accruals.
Additionally, Consultus initiated a link to a specialist carbon broker, who are now handline their UKA carbon requirement, for compliance, with UK-ETS fully covered into 2025, at below the market average prices.
Gatwick can track and report on their energy use, price information and sustainability performance, through Consultus’ innovative and bespoke in-house portal, myEnergy. This can be accessed by the client at any time.
Early on in the relationship, Consultus turned their attentions to tendering gas and electricity supply contracts, for the next 24 months.
Another early focus was the set-up of risk management services. Gatwick found itself in a position where they were only partially hedged, for future supply contract periods.
Consultus took Gatwick through a risk strategy definition process, and they adopted an AMP (Actively Managed Purchasing) strategy, meaning that they could buy and sell energy to the market.
Early on, Consultus stepped in to fully fix Gatwick’s position until the end of their existing supply contracts (until April 2024), taking effect in March 2022.
Regular market calls are a platform to advise the client on purchasing decisions and strategy.
Consultus’ Risk Management team combine their expert market knowledge with algorithmic-based tools and a formula-based approach, to get the most out of AMP strategies.
The team are client-facing, not feeding into a consultant. A consultant and risk management specialist are available to discuss triggers, signals, and drivers to strategy, following market trends.
The first 18 months of the Gatwick and Consultus partnership has been a time of great uncertainty and unrest in the energy markets.
This is due to the war between Russia and Ukraine, making clear strategy and timely decisions on future energy purchasing critical.
At the start of 2023, the energy market started to decline, leading to the potential to optimise future energy price positions using the AMP strategy, but with a risk cap to protect budgets.
Some positions for both electricity and gas were unfixed, in line with the downturn of the market, and then re-fixed, at a lower price, which came in line with the risk cap.
Risk management has tripled the number of trades for Gatwick, who are now fully hedged with all necessary energy requirements in place, until the next financial year.
Making energy a commodity for Gatwick has resulted in savings of £812,000, just on electricity, compared to their forecasting had they not changed their position.
This figure is based solely on Consultus’ own trades, dealing with aspects that were not already fixed. When FY 2024 begins, risk management of their full volume commences.
Tenders are in place for flexible products to provide all of their electricity and gas, from the renewal point. The relationship will continue until, at least, 2025.
Consultus are also advising Gatwick on self-generation assets that would be site-specific, such as potential sources of solar power.
The Net Zero Projects team spent three days at Gatwick, assessing renewable energy opportunities, and presented a site survey to the client.
Gatwick are also considering the merits of a CPPA (Corporate Power Purchasing Agreement), to ensure further green energy supplies, from a generator such as a wind farm.