The Consultus International Group saves PPS £584,000 on their business energy, in just 24 months, with further opportunities to increase this saving through a risk management strategy.
Background
PPS Group are a UK market leader in Returnable Transit Packaging (RTP) solutions and services including rental, pooling, management, washing, repairs and sales.
Sustainability is at the heart of PPS’ strategy and promoting the circular economy, by reducing packaging waste, is a key component of and benefit to Returnable Transit Packaging.
PPS have entrusted the Consultus International Group to source their business energy (electricity and gas), for a number of years, and wanted flexible choices while retaining price certainty.
They got that with ‘Budget Guard,’ a fixed option that sets a maximum commodity rate, using a CAR (Capital At Risk) buy-only strategy, which doesn’t allow selling energy back to the market.
PPS then reached a point where significant savings could be made by transferring to another product and sought the advice of Consultus’ risk management team.
The Solution
Consultus recommended transferring to its flexible consortium solution, Market Tracker, which enabled PPS to gain additional opportunities for reducing their original energy cost forecast.
Market Tracker makes effective use of an AMP (Actively Managed Purchasing) strategy, guided by Consultus’ risk management experts, which acts upon current trends when energy trading, at the best possible rates.
Secured energy is there to buy, sell and be bought back again, hedging positions as prices rise and fall, from an ever-changing market, under the Market Tracker strategy, which PPS can benefit from.
This seeks to cover a client’s risk, should rates increase, and protect them from a sharp upturn in pricing, while adding additional value, by being allowed to re-enter the market for trading.
Outcomes
Market Tracker has provided savings of over £450,000 for power, over the 24 months the client has been on the product, against an original spend of £2,100,000, almost a 25 per cent reduction compared to budget.
Gas costs have decreased by almost 50 per cent, with savings of more than £230,000 for this period, on an original spend of £478,000. There could be further benefits, too, if the market continues to lose value.
Consultus has traded PPS’ positions so well, for the period of April through to September 2023, that are being charged at a negative unit rate for gas.
If the market continues to trade at current rates, PPS will receive a credit. Last year, this period cost them £262,172, but so far (for October 2022-September 2023) it has gone down to £68,502.
In just 14 days, Consultus reduced the total energy cost (for the period from June 2023 to September 2024) by over £90,000, a figure that is now more than six times that amount.
Jeremy Tutt, PPS Group Finance Director, said: “Consultus’ trading strategy and expert advice has allowed us to take advantage of the falling market, resulting in huge savings.
“We’re confident that the company’s ability to quickly react to market conditions will deliver additional significant savings in the future.”