Case Study

Tradition Energy and OMNIA Partners Reduce Energy Costs for Global Chemical Manufacturer

Tradition Energy and OMNIA Partners Reduce Energy Costs for Global Chemical Manufacturer

The opportunity

A global specialty chemical manufacturer needed a new energy procurement strategy after losing its existing purchasing arrangement.

A leading global manufacturer of peroxide-based specialty chemicals faced a significant change in its energy procurement strategy. Historically, the company had aggregated its domestic electricity and natural gas purchasing with a sister company, leveraging their combined energy requirements to secure supply agreements.

When the sister company was sold, the manufacturer was left without an established procurement solution. As a member of OMNIA Partners, Private Sector, the company gained access to Tradition Energy’s procurement services, creating an opportunity to reassess its existing agreements, improve contract terms, and develop a more competitive, long-term purchasing strategy.

Analysis

Tradition identified opportunities to correct natural gas purchasing inefficiencies, increase supplier competition, and secure more favorable long-term energy agreements.

Tradition evaluated the manufacturer’s existing electricity and natural gas agreements, identifying several opportunities to improve pricing and contractual terms. The analysis revealed that the company’s contracted natural gas volumes had automatically renewed for approximately 10 years without being adjusted to reflect actual consumption, resulting in supply shortfalls that required additional purchases at higher market rates.

Tradition also discovered that the manufacturer’s previous procurement approach relied on a single energy supplier, limiting competition and opportunities to negotiate more favorable contract terms. Additionally, the company had historically favored one-year agreements based on expectations that energy prices would decline, leaving it exposed to future market fluctuations.

Leveraging its proprietary market research and intelligence, Tradition demonstrated how longer-term purchasing could reduce both energy costs and market risk. The team developed a competitive procurement strategy that introduced multiple suppliers, corrected natural gas volume requirements, and prioritized fixed-rate agreements with improved pricing and contractual protections.

The Result:
Lower Costs, Greater Certainty

16% Reduction in Annual Energy Spend

Tradition negotiated new energy supply agreements that reduced the manufacturer’s annual energy spend by 16%. The resulting procurement strategy delivered more favorable pricing while providing greater long-term budget certainty and protection against future energy cost increases.

Expanded Supplier Competition

Tradition sourced five natural gas suppliers and eight electricity suppliers, creating a competitive procurement environment that had been absent from the manufacturer’s previous purchasing strategy. This process resulted in three new fixed-rate contracts with more favorable pricing and contract language, strengthening the company’s overall procurement position.

Improved Natural Gas Cost Management

By identifying and correcting outdated contracted natural gas volumes, Tradition addressed a long-standing purchasing inefficiency that had forced the manufacturer to buy additional supply at higher market rates. The incumbent natural gas supplier’s renewal offers also reduced the applicable budget by 50%, while updated purchasing volumes positioned the company for additional ongoing cost reductions.

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For decades, organizations have trusted Tradition Energy to navigate increasingly complex energy markets. As the nation’s largest independent energy procurement and sustainability solutions advisor, we bring clients resources, market reach, and transaction activity other advisors cannot replicate.

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Tradition Energy and OMNIA Partners Reduce Energy Costs for Global Chemical Manufacturer