Many energy tenders start in the wrong place.

The first question is often, “Can we get prices from the market?”

The better question is, “What are we actually trying to achieve, and what risks are we prepared to carry?”

That may sound like a small distinction, but in energy procurement it matters. A tender without a strategy can still produce a price. It can still produce a recommendation. It can still result in a contract being signed. But that does not mean the business has made a good decision.

Start with risk, not prices

Energy is not a normal indirect category. It behaves differently from office supplies, cleaning services, professional services or fleet. The price can change materially between the start and end of a procurement process. The structure of the contract can matter as much as the headline rate. The timing of the decision can have a greater impact than the negotiation itself.

That is why energy procurement should not begin with a spreadsheet of suppliers. It should begin with a view on risk.

A business needs to understand what it is actually trying to achieve. For example:

• Budget certainty

• Market opportunity

• Renewable credentials

• Operational simplicity

• Contract flexibility

• Supplier resilience

• A balance between some, or all, of the above

It also needs to understand what it can realistically manage internally.

Fixed or flexible is not the real question

There is nothing inherently wrong with a fixed contract. For many organisations, a fixed contract is exactly right. It gives budget certainty, is easier to explain to finance, and reduces the need for ongoing trading decisions.

There is also nothing inherently wrong with a flexible contract. For larger or more sophisticated buyers, flexibility can provide better access to the market, more control over purchasing decisions, and the ability to build a procurement strategy over time.

The issue is not fixed versus flexible. The issue is whether the contract matches the organisation.

Too often, energy buyers are asked to choose between contract structures before the business has properly agreed its risk appetite. That creates confusion. Procurement may be focused on competitiveness. Finance may want budget certainty. Sustainability may want renewable evidence. Estates may want operational simplicity. Senior leadership may only become interested once prices move against them.

By the time those tensions surface, the tender may already be live.

That is the wrong moment to discover that the business does not have a shared view.

The market will not wait for internal alignment

The wider market context makes this even more important. Energy buyers are not operating in a calm, predictable environment. Gas markets remain sensitive to geopolitical disruption. Events in the Middle East can quickly feed into LNG risk, oil sentiment and wider energy confidence. The war in Ukraine continues to influence European energy security thinking. Grid constraints are becoming more visible. Data centres and electrification are increasing pressure on power systems. Policy costs, network charges and balancing costs are no longer background noise.

These issues may feel distant from a single electricity or gas renewal, but they influence the market into which that renewal is being placed.

A buyer who goes to market without a strategy is effectively asking suppliers to define the options. A buyer who goes to market with a strategy can test the market properly.

That difference matters.

Suppliers can normally tell when a tender is well prepared. They can also tell when it is rushed, unclear, or being used simply to benchmark an incumbent supplier at the last minute. That does not mean suppliers will refuse to quote, but it may affect how much effort they put into the response, how much risk they price in, and how seriously they view the opportunity.

This is an uncomfortable point, but it is worth saying. Not every tender is equally attractive to the market.

What should be agreed before going to market?

A good strategy does not need to be complicated. It does not need to be a 60-page document. In many cases, it can be a clear internal position covering a few important points:

• What volume are we buying?

• How reliable is the data?

• When do our current contracts end?

• How much budget certainty do we need?

• Are we prepared to accept market movement after contract award?

• Do we want renewable energy, renewable certificates, a PPA, or simply a compliant supply contract?

• Who will approve the decision?

• What happens if the market moves sharply during the tender?

• Are we giving suppliers enough time to price properly?

Those questions are not academic. They affect the quality of the offers received.

A well-structured tender with clean data, clear decision-making, realistic timescales and an informed buyer is more likely to get proper engagement. A rushed tender with poor data, uncertain governance and unclear objectives is less likely to bring out the best of the market.

This is particularly true when markets are volatile. Suppliers become more selective. Risk teams become more cautious. Pricing windows shorten. Internal approvals matter more. The old assumption that a buyer can simply issue a tender, wait for best and final offers, and pick the cheapest rate is increasingly fragile.

Clarity comes before the tender

That does not mean procurement teams should overcomplicate the process. Quite the opposite. A good strategy should make the process simpler.

It should tell the business what matters most.

If budget certainty is the priority, the tender should be designed around that. If market participation is the priority, the contract and governance model need to support it. If carbon reporting is important, the renewable product needs to be properly understood. If operational simplicity is essential, the buyer should be honest about that from the beginning.

The wrong approach is to ask for everything, decide nothing, and hope the market somehow resolves the trade-offs.

Energy procurement rewards clarity.

That clarity should come before the tender, not after the offers arrive.

For Heads of Procurement and Estates Directors, the practical lesson is straightforward. Before going to market, spend time agreeing the strategy internally. Challenge the data. Understand the contract position. Speak to finance. Clarify the appetite for risk. Decide how renewable claims will be treated. Think about governance. Then ask suppliers to respond to a clear requirement.

This does not remove market risk. Nothing does.

But it does mean the business is making a conscious decision rather than drifting into one.

The best energy tender is rarely the one that starts with a request for prices. It starts with a clear view of what the business is trying to achieve, what risks it is willing to hold, and what kind of supplier relationship it needs.

Price still matters. Of course it does.

But in energy procurement, price is only useful when the business understands the decision sitting behind it.