A guide to choosing between energy contracts
We have seen rapid increases in energy costs in recent years and this is expected to continue over time due to increasing energy capacity shortages. Selecting a fixed price contract therefore has obvious advantages of certainty of cost and no risk of price increases. But no one solution fits all so we have summarised here below the merits of fixed and variable contracts.
Fixed price contracts
The advantages of fixed price contracts are:
- Certainty of cost, guaranteed prices for the duration of the contract term
- Rates that can be flexed between day, night, half-hourly, single rate, seasonal or a combination depending on your business and consumption patterns
- Simple to manage and can apply to your entire property portfolio
- Risk of increase in prices is with the energy provider
- Billing can be consolidated and checking automated
Variable or flexi contracts enable large consumers (consuming over 6GWh per annum) to take advantage of short-term price volatility. Whilst the long term trend is for prices to increase, capacity availability may provide for some lower energy costs for a period. They are by nature more risky as prices can rise as well as fall and so total energy costs will vary up as well as down.
The advantages of flexi contracts are:
- Potential to take advantage of short-term falls in market prices
- Basket purchasing can allow 001 to purchase at prices that larger organisations can achieve
- Rates will move by month or season depending on contracts purchased
- Establishes long-term arrangements with one or two key suppliers
- Dedicated purchasing professional on-hand to advise on procurement timing
- Contracts are tailored to suit your business
- Best prices as you can take advantage of falling energy prices
Purchase In Advance
You purchase the contract in advance providing you stability and certainty for the 12 month period.
Purchase Within Period
You can purchase just a portion of your energy requirements within the contract period. This provides greater market opportunities but there is less certainty when compared to purchasing in advance.
001 have over 16 years experience and we can provide you extra unbiased information. We will work closely with you to fully understand your business requirements and ensure you get the best deal. Contact us to see how much you could save.