Understanding flexible energy contracts

Flexible energy contracts can provide businesses with substantial savings. You can actually buy forward prices up to 30% cheaper than if you were to take out a 12-month fixed energy contract. What business doesn’t like the sound of that? Think of the bottom-line savings!

But before you go ahead and sign a flexible contract, let’s look at them in more detail, starting with the difference between fixed and flexible contracts…

Fixed contracts

These provide budget certainty and stability through buying energy at a set rate years in advance, this contract type is ideal for those who prefer to allocate a set annual budget and forget about it for the rest of the contract period.

With fixed, no matter if the wholesale energy market rises or falls, you pay the agreed set rate, which is great if the market is rising, not so great if prices are going down.

Flexible contracts

Flexible contracts on the other hand let you buy in smaller chunks, so you can take advantage of fluctuations in the market, locking in at optimum times. This is how the savings are made.

There’s a misconception that you can’t achieve budget certainty with a flexible contract but that’s not true, by agreeing price caps with your energy partner, you won’t pay more than this set price cap. Helping you to plan your budget allocation for the year ahead and beyond.

You can learn more about the difference between fixed and flexible contracts with our Fixed vs Flex infographic.

So why doesn’t every business take a flexible contract?

Well, there is a minimum volume required to be considered for a flexible contract, above 10GWh*, and your business must have half hourly/smart meters in place, which not all businesses have.

*If your energy consumption is between 1GWh – 10GWh, then your business is best suited to joining a Flexible Energy Basket.

Flexible contracts also require more complex buying decisions and if not properly managed exposes you to risk, but don’t be put off just yet! Selecting the right partner to manage your flexible energy contract on your behalf will give you the energy to focus on what’s important, your business.

Interested in finding out more about our flexible purchasing contracts?

Take a look at our fixed vs flex and our flex basket videos. Or, if you’ve seen enough and want to speak to us directly, reach us at enquiries@businesswisesolutions.co.uk, alternatively give us a call on 01282 611329.

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2019-05-09T12:21:51+00:00