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When considering the question of whether it’s best to enter into a fixed or a flexible energy purchasing contract then again there is no one right answer. The decision needs to be one made as part of your whole energy management strategy and taking into consideration many aspects relating to your business as well as to your energy use.

I’ve highlighted below some broadly accurate features of both fixed and flexible energy contracts:

Fixed

Protection against price increases throughout the duration of the contract (providing you have entered into a fully-fixed, fully-inclusive contract) and conversely inability to benefit from lower prices if the wholesale market drops.

No necessity for continual contract management, you can essentially ‘fix and forget’ (providing someone is looking at when to next renew your contract)

What length fixed contract should I enter in to?

Again, this decision will need to be made based on many factors and forming part of your overall energy management strategy.

Flexible

Enables you to make multiple purchases throughout the life of the contract, potentially taking advantage of dips in the market as and when they happen. Of course, if there is a rapid and sustained rise in the market subsequent to entering the contract, any buying decision you make could potentially leave you worse off than if you had fixed initially.

Essentially removes the risk of ‘take or pay’ clauses from suppliers if you feel there is a potential that your energy usage will significantly increase/reduce throughout the duration of the contract (suppliers typically allow a tolerance of c+/- 20% although this does vary)

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