Flexible energy purchasing explained

We’re calling on businesses across the UK to check their eligibility for a flexible energy purchasing contract that could save them thousands on their energy bills.

A flexible energy contract allows a business to spread energy purchasing decisions “throughout the life of a contract” and take advantage of market conditions, to maximise the potential for savings to be made.

Flexible energy contracts often have a no take or pay clause, which means energy consumption can be reforecast, and businesses can avoid purchasing a higher volume than is necessarily required. Flexible offers always have an element of risk, although low and medium risk offers often have a fixed element to help provide some budget certainty.

Multiple purchases that are made as the market changes can provide a business with greater opportunities to achieve individual savings and spread the risk of a volatile market.

If you’re unsure, it’s worth seeking advice from an energy specialist that can consult on the best contract for your business.

There are two types of flexible contract:

Fully flexible offers are ‘high-risk’ as the energy commodity cost is subject to market movement, and being able to track the perfect time to purchase and secure prices.

Third Party Charges (TPCs) are also passed through at the prevailing rate at the time of billing. These can fluctuate in price but usually increase over time, and can be reviewed as often as every six months.

Part Fixed & Part Flexible allows a customer to fix some or all TPCs, which reduces the risk of costs increasing. Only the commodity costs are dependent on tracking market prices.

To assist businesses, we have agreed bespoke basket deals with Engie and Gazprom Energy. The baskets enable smaller businesses to gain more purchasing power by aggregating consumption.

Monthly spend is calculated for each month of the framework contract, based on the cost of energy, and TPCs if required.

We offer flexible pricing from a variety of suppliers that operate in the UK and offer bespoke products to our customers.

They can develop purchasing strategies to suit customers’ needs and will provide market updates accordingly. Customers also get access to independent and varied market intelligence, updates on market news, prices and movements, invoice validation and educated advice from a range of sources.

To find out if your business is eligible for flexible purchasing get in touch with us.