Why would I choose to join a flex energy basket?

Opting for a flexible supply of energy enables businesses to better manage their energy procurement risk by purchasing their load in small amounts at optimum times.

Sounds perfect, doesn’t it? Well, commonly, standalone flex contracts are only available to large energy users with a big energy spend, but there is an option for smaller users; a flex energy basket.

A flex energy basket is ideal for anyone using from 1.5GWh of consumption right up to 10/15GWh from which point we would recommend a standalone flex product.

What is a basket and how does it work?

An energy basket is an ideal buying option for customers whose volume isn’t large enough to secure a standalone flex agreement with a supplier.

By pooling your tradeable volume with other customers, together you have better market buying power to purchase directly from the wholesale gas and power markets, to the benefit of all involved.

Flexible purchasing offers:

  • Budget certainty through the use of price caps
  • Forecasts providing better understanding of non-commodity costs
  • Full transparency in pricing
  • An opportunity to benefit if the market commodity prices fall
  • A risk managed trading strategy
  • Dedicated trader support and analysis by market experts

Let’s look at Businesswise Solutions flex basket offer, set up with suppliers and managed by our internal trading team.

Customers who join the basket benefit from all the usual advantages of a flexible contract, while Businesswise actively risk manage and trade the volume in the basket on their behalf.

We consider ours to be a three-pronged attack; fundamental, technical and risk management, all of which are vital to the basket’s success.

Fundamental analysis

Fundamental analysis is a method of building up an understanding of the market by following supply and demand factors which contribute to the setting of a price for energy commodities in the market.

At Businesswise we track these factors, specifically oil prices, international demand for oil and gas and, closer to home, the workings and the state of the UK gas and power systems. Energy must be delivered directly to the door of customers and therefore any breakage to this extensive system can have big impacts on prices.

We therefore follow the continuous development and health of these systems, including outages, breakdowns, new build power stations and gas injection sites to better understand what causes the price to be where it is. With this knowledge, we can understand what will happen next and when we should buy.

Technical analysis

Technical analysis contrasts with fundamental analysis by focusing on the movement of prices themselves, rather than what underlying supply and demand factors drive them. Driven by history and sentiment, technical analysis provides clues, through price shapes and trends to how the market will behave and where it may go next.

We detect patterns in price movements, that can be used to time trades, while momentum indicators help us to track the strength of buyers and sellers in the market.

We mark key price levels such as resistance and support prices, monitor trends in prices and predict price targets and any key risk levels to aid risk management.

As with fundamental analysis, we use all of this information to help develop our overall analysis of the marketplace.

Risk management

The value of flex purchasing means that we can lock and unlock buying in order to benefit when the market falls and reduce risk when it rises.

We can track and monitor each customer’s position and costs within the basket and gain an understanding as to how changes in prices will affect their actual costs and bottom line through applying our analysis of the market using the methods above.

We then use our expertise in the wholesale market to time trade activity at points which will benefit the customer.

How do I go about joining a Businesswise basket?

The first step is to gather data so that we can get a good insight into your current contract end dates across your energy portfolio. We then pass this to one of our preferred suppliers so that they can build a forecast of what you will use. They will then apply their terms and conditions to the agreement; we choose suppliers who offer maximum transparency and service.

When you are confident you understand the workings of the basket, contracts are signed and returned and your volume is added to the basket.

When basket has sufficient volume, it is closed and traded under risk management and price caps for the basket are sent to customers.

Interested? Please get in touch with us on 01282 611 329 or email us at enquiries@businesswisesolutions.co.uk 

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