Procurement consultancy in the energy sector
The energy sector is experiencing a significant transformation. The demand for sustainability and green energy is not just growing—it’s expected to be implemented immediately. Procurement plays a crucial role in accelerating this transition, making it a critical component for the energy industry’s evolution.
Procurement consultancy in the energy sector
The energy transition is advancing rapidly, presenting industry stakeholders with unprecedented challenges. Traditional business models are under scrutiny as the demand for sustainability and green energy grows, with an urgent call for implementation. Yet, navigating a transformation of this magnitude raises a crucial question: how can it be effectively realized?
The answer lies in procurement’s pivotal role in facilitating this transition.
The energy industry is undergoing unprecedented change. The aim is to produce completely carbon-neutral energy by 2050 – as envisaged in the European Union’s Green Deal – while keeping energy costs at a competitive level that is also acceptable to end consumers.
Whether it involves hydrogen, synthetic fuels, or renewable energy sources, energy companies—including energy suppliers, power generators, network operators, and storage providers—seeking to advance must have robust procurement functions. These are essential for driving innovation, achieving cost excellence, and ensuring a secure supply chain.
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The complete shift to energy sources without a carbon footprint requires huge investments. The International Energy Agency (IEA) has calculated that energy companies will need to invest four trillion dollars globally by 2030 to achieve full decarbonization by 2050.
To achieve competitive costs in building new plants and networks, it’s essential to involve procurement early in the planning process, ensuring close collaboration between procurement and engineering. This is crucial, especially as transitioning to new concepts often means traditional supplier relationships may not suffice. Early involvement of procurement allows more time to identify innovative suppliers for emerging needs.
Procurement plays a key role in laying the groundwork for successful transitions, such as establishing new infrastructure with optimized capital expenditures (CAPEX), developing new operating models with tailored categories, and crafting strategic supply chain strategies. Furthermore, forging strategic partnerships presents a significant opportunity to leverage specialist knowledge and collaboratively develop solutions.
Learn more about intelligent supplier management and innovation partnerships.
Our energy sector experts are happy to support you in the conception and implementation of optimal sourcing strategies. In this way, we ensure efficient cost management for our clients. This also applies to the indirect requirements of fast-growing and increasingly international companies.
Electricity transmission and distribution companies are navigating a pivotal challenge, in the face of a critical power cable supply crunch. Demand surges driven by global green energy transitions and aging infrastructure are clashing with supply-side pressures like labor shortages and raw material cost volatility. Competition for resources across various sectors like telecommunications and automotive manufacturing compounds the pressure of escalating power cable production.
The failure to address the bottleneck carries severe environmental and financial repercussions. Electricity utility companies stand to incur substantial penalties, diverting funds that could otherwise be invested in accelerating the transition to renewable energy. This scenario not only threatens project timelines but also global sustainability objectives.
INVERTO has crafted a resilience framework to guide companies through these turbulent times. It focuses on activating high-impact levers for stability, cost-efficiency, and strengthened partnerships. Have a look here.
In the evolution of the energy sector, digitalization is the key to success and requires innovative supplier and procurement management, e.g.
- the control of a decentralized energy network by means of smart metering
- cost optimization in maintenance and repairs through innovative technologies, such as remote diagnostics, remote monitoring or predictive maintenance
- the acceleration of internal company processes from the conclusion of a contract to payment
- innovative spend analytics solutions
You can find out more about our expertise in the digitalization of procurement here.
Companies in the oil and gas sectors are adapting business models and cost structures to changing demand. At the same time, the development of new, sustainable business models is leading to new procurement challenges for companies in the industry.
Examples are:
- Investments in renewable energies
- Integration of charging stations into petrol station networks
- Research into synthetic fuels or biofuels
In companies from the gas and oil industry, procurement is the area where significant savings potential can be addressed in order to realize competitive energy production costs. At the same time, as a link to the supply chain, the department plays a central role in achieving sustainability goals and establishing innovative processes. The prospect of declining revenues for fossil fuels requires active cost management within the framework of traditional business models. In maintenance, cost optimization is becoming increasingly important – plants and infrastructure have to work efficiently and safely.
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Procurement also needs to remain efficient and responsive in the face of change, to deal with short-term challenges in strategic procurement with a professional team when needed, and to know how to implement best practices.
Private power generation via photovoltaics plays a decisive role in many political plans to achieve carbon neutrality. In order to do so, infrastructure must be adapted at the same time. More and more private households are becoming not only consumers, but also producers and suppliers. Transmission system operators are thus challenged to plan and implement large-scale projects to manage decentralized infrastructure, which is not possible without external service providers. The goal is to find practicable and affordable energy technology solutions.
Parallel to the real estate sector, the automotive sector is also switching to electricity instead of fossil energy. The development of the charging infrastructure therefore requires further investments and an intelligent connection to the supply networks.
Procurement is required for all of these tasks. It is foreseeable that in the course of this development, procurement will play a much more prominent role than in the past.
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