Energy brokers, also known as energy consultants in the energy industry, act as intermediaries between energy producers and energy consumers. These consultants perform job duties similar to real estate brokers or stockbrokers. More narrowly, the domain of energy brokers can encompass either the residential level or the industry level of energy consumers, depending upon the expertise and experience of the broker.
What does an Energy Broker do?
Energy brokers work with clients on a contractual basis in order to lower the bottom-line cost of energy between consumers and producers. From a business perspective, energy consultants help companies minimize day-to-day operational expenditures, but from the perspective of home residents, energy brokers help lower monthly electricity bills.
Essentially, energy brokers operate at either the residential or commercial level. These specialized consultants act as an intermediary between energy producers and energy consumers. When speaking of the residential level, energy brokers arrange service contracts between home residents and local utility providers. At the commercial level, energy consultants arrange similar contracts and conduct operations on a much larger scale, often providing management consulting services to corporations and municipal governments as well.
Residential electricity providers in deregulated regions can now offer customers competitive price rates. The very fact of having a choice of electricity providers has fostered fierce competition among residential electricity providers. Brokers allow service providers a new means to contact and maintain customers. Before energy deregulation, electricity providers had little to no incentive to offer their customers lower rates, but today, brokers fulfil a pivotal role in the residential energy sector.
Entry-level brokers gain their first experience in the energy business by arranging residential utility contracts. These contracts may encompass electricity or heating services depending on the amount of deregulation within a state or province. For instance, several states in the U.S. only allow residences a choice of an electricity provider, but other states allow residences to choose both a gas and an electricity company.
Commercial-level energy brokers arrange wholesale energy contracts among residential electricity providers in addition to offering brokerage services in the petroleum, coal, natural gas, ethanol and renewable energy sectors. In one manner of speaking, commercial-level energy consultants more closely resemble real estate brokers and stockbrokers than salesmen.
Large corporations conduct business on a global scale by investing and trading in energy derivatives and related commodities. In order to keep up with the gargantuan demand for energy-related assets, global corporations hire energy brokerage firms to conduct day-to-day trading operations. The ability to conduct large-scale market analysis is key for energy brokerage at the upper-echelon, international level.
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Energy brokers often work in a typical professional office environment. This size of the office depends upon the size of the brokerage firm. A start-up firm may employ less than 50 people, which means an entry-level commercial energy broker may have to perform many more minor operational duties. On the highest level, careers at a large brokerage firm may require international travel or relocating to a foreign country entirely.
A growing number of residential-level brokers are self-employed individuals that conduct business out of a home office. The work environment of these brokers may include soliciting new clients in novel, inventive ways. Door-to-door consultations remain the most common marketing strategy residential-level brokers deploy, but a large number of brokers have moved their entire operation online, offering potential clients real-time quotes.