The choice between a fixed price and a flexible energy contract is one of the most consequential decisions in energy procurement, and one frequently made by default rather than by deliberate strategy.
A fixed price contract locks in your unit rate for the duration of the agreement, typically one to three years. The benefit is certainty. The cost is the margin the supplier applies for taking the price risk, and the risk that wholesale prices fall after you fix.
A flexible procurement contract allows a business to purchase energy in the wholesale market over time rather than all at once. The potential benefit is a lower average price achieved by spreading purchases across market cycles. The risk is the reverse. Prices may move against you. Flexible contracts are generally appropriate for businesses with consumption above around £100,000 per year.
The choice is about risk appetite, consumption volume, internal resource and the degree to which budget certainty has value in your planning process. A business with tight margins is likely better served by a fixed contract. We'll tell you clearly when we think flexible is the better option, and why.
Our default position: we recommend the contract structure that fits your risk profile and consumption characteristics, not the one that generates the most visible activity on our part.