ELX
The Energy Exchange
 
 Powered by Energy Link
 

How The Energy Exchange Works

The Energy Exchange is New Zealand's first web-based high tech exchange designed for better electricity procurement for large electricity consumers, with built-in intelligence based on Energy Link's 20 years of accumulated knowledge and expertise in the procurement field and the electricity market.

It helps you find the best deal and renew supply contracts, either through a reverse auction or a paperless RFP, or both if you wish to set this up in the Advanced service option only).  The Energy Exchange makes the often difficult and fraught issue of contracting supply simple, and the whole process consumes very little of your valuable time.

A large electricity consumer typically spends more than $75,000 ex GST per annum across all of their sites (which are also referred to as ICPs in the electricity industry), and/or has many sites supplied under contract.  Large consumers typically receive discounted non-standard pricing from retailers, as opposed to the standard pricing provided to small and medium consumers.

The Energy Exchange can literally handle procurements with several thousand ICPs and an electricity bill of millions of dollars per annum.

Buying groups need to talk to one of our energy experts about setting up an assisted procurement on the Energy Exchange.

Reverse auctions are new to New Zealand and provide a faster and cleaner alternative which will appeal to many consumers with less complex requirements.  An auction is created for a list of ICPs that Retailers make fixed-price offers on, in a live auction which runs during a 30 minute window on a date and at a time set by you.  You are then free to accept the lowest offer.

You don't have to be an electricity market expert to get great outcomes with the Energy Exchange.  Support by phone or email is included in your fee, or you can also use an energy consultant to run your re-contracting exercise through the Energy Exchange as an assisted procurement, if you prefer not to do it yourself.

The Energy Exchange handles fixed price variable volume contracts for supply, which are the choice of the majority of large consumers.  Contact Energy Link for other types of supply including supply at spot prices or  hedge  contracts.

Read about what you'll need to get started, and watch the tutorials here

Using the Energy Exchange is simple, but there is some terminology you need to be familiar with:

ICP - Installation Control Point

To get started with your auction or RFP you will need a list of your ICPs, which you find on your electricity invoices.  The ICP numbers have the format yyyyyyyyyyxxccc, for example 00000568188WTEDC.  You don't need to include the leading zeros.

Each site typically has one ICP and you receive one invoice each month for that ICP, but a site could have more, e.g. one ICP for the factory and one ICP for the warehouse:  you need to include all the ICPs on a site in your list of ICPs.

RFP - Request for Proposals

An RFP is like a tender process, but a little less formal.  An RFP put through the Energy Exchange is paperless, easy to set up and painless.  You can also add your own custom requirements.

TOU - Time of Use

An ICP with Billing Type TOU is usually larger (typically more than 100,000 kWh per annum) and the electricity meter records consumption by half hour.  The energy charges and line charges are always shown separate.  Costs for TOU ICPs shown on the Energy Exchange are always exclusive of line charges (and exclusive of GST).

NHH   Non-half hourly

The NHH Billing Type is the opposite of TOU (and is sometimes called non-TOU).  NHH ICPs may have TOU meters, but they are smaller in consumption and, more importantly, have NHH pricing plans.  These plans may have energy and line charges bundled together, so costs for NHH ICPs shown on the Energy Exchange are always inclusive of line charges (but exclusive of GST.

UNM Unmetered

Streetlights, cell phone towers and phone booths don't usually have electricity meters so these ICPs have the UNM as their Billing Type.

Service Level - You Choose

The Standard service includes one auction and is quick and easy to set up.  The Advanced service allows you to create and run up to two RFPs and up to one auction.  For example, you might decide to put 900 smaller ICPs into an RFP and your 25 larger ICPs into an auction.

An RFP allows you to add standard requirements (provided by Energy Exchange for you to tick as being included) and you can add your own custom requirements.

An RFP also allows you to specify up to three contract terms, for example you might be open to contracting for 12, 24 or 36 months and allow retailers to respond accordingly in their pricing offers.

It's up to you how you structure your Advanced procurement, but our energy experts are there to advise you.

Deal Selection Tool for RFPs

The Energy Exchange's Deal Selector tool makes selecting the best deal simple, quick and accurate.

When an RFP closes, the Deal Selector produces default deals for you to start with.  The Base Case default deal is the combination of retailers which gives the minimum overall cost.  The Deal Selector also produces the deal that minimises the number of ICPs that are switched to retailers that don't currently supply those ICPs, and an  exclusive' deal for each retailer.  Most of the time one of these default deals will suit your requirements, but you can easily get in and adjust them to create your own custom deals.

If you entered your own groupings for your ICPs, then you can even create group deals which allocate all ICPs in each member of the group to one retailer, e.g. all ICPs in the south grouping to retailer A, mid group to retailer B and north group to retailer C.

The costs shown in the Deal Selector for the TOU sites are only the retailer's energy charges, which are typically fixed throughout the offered contract terms.   

Smaller NHH site costs are based on bundled line and energy charges, and may be offered with fixed and non-fixed tariff components at each ICP:  non-fixed components are estimated.  The Deal Selector includes an  Inflator  (defaults to zero), which you can adjust, and is used to inflate the non-fixed NHH tariff components, based on the assumption that the non-fixed components may change over time as line charges increase.  Obviously, it is not possible to predict how line charges will change over time, but if this issue is important to you, we recommend contacting our energy experts to discuss the range of inflators that might actually occur.  Or use an auction instead, in which all components must be fixed by retailers.

The Deal Selector also separates offers from retailers into different terms, e.g. some retailers may have offered pricing for 24 months, or 36 months, or both.  The Deal Selector provides cost estimates for each offer for each term so that a decision can be made as to which term is preferred.

Once you make your selection of retailers and pricing offers, you simply initiate a new contract via the Energy Exchange with either your existing or new retailer(s).  Any further negotiations with retailers, and execution of supply contracts, are handled by the consumer external to the Energy Exchange, but our energy experts or your energy consultant can assist when required.

Authorisation Ensures Integrity

When you register on the Energy Exchange, you will be contacted by one of our energy experts to complete the authorisation process, which is required so that the Energy Exchange can access your consumption data and provide this to retailers.

The Energy Exchange can handle groups of unrelated entities but these buying groups must contact one of our energy experts before registering a procurement so that we can assess their suitability, and arrange authorisations.

Independence

The Energy Exchange is powered by Energy Link Ltd, a leading independent provider of expert services and software for large consumers, electricity generators and electricity retailers, established in 1996.  Energy Link developed the Energy Exchange from scratch, when we recognised that convergence of smarter metering, competition in the retail sector of the electricity market, and the internet, meant that procurement practices for larger consumers needed to change.

With so much at stake for large electricity consumers, the Energy Exchange is designed to be independent, so you can be assured there is no bias in the selection of default deals or the inclusion of retailers.  Retailers do not pay commissions.    

As a large consumer, you will pay a fee which is based on your ICPs.

A 10% early payment discount is available on all fees when paid by credit card, or otherwise paid on invoice on or by the indicated early payment date.