Fixed vs Flex Energy Purchasing: How UK Manufacturers Choose Without Guessing

For UK manufacturers, energy purchasing has become a higher-stakes decision.

Not because the process is new, but because the impact of getting it wrong is harder to absorb. High energy costs continue to affect competitiveness, and volatility still influences what suppliers can offer and how long prices stay available.

That is why more manufacturing leaders are asking a sensible question:

Should we fix our energy price, or choose a flexible energy purchasing approach?

This article breaks down the difference, explains where each option fits, and gives you a practical way to choose based on risk tolerance and operational reality, rather than guesswork.

Fixed vs flex: the simple explanation

A lot of confusion in energy procurement comes from terminology, so it is worth keeping this straightforward.

A fixed contract usually means you lock the unit rate for the full contract term. It gives you one clear price, one clear cost base, and minimal ongoing decision-making.

A flex contract usually means your energy purchasing happens in stages rather than all at once. Those stages are often referred to as “tranches”. The aim is not to predict the market. It is to reduce the risk of buying your full volume on a single day that turns out to be expensive in hindsight.

Flex contracts are typically most suitable for higher-consumption sites, and consumption thresholds may apply depending on supplier and contract structure.

Why the energy purchasing decision matters more for manufacturing

Manufacturing does not have the same room to manoeuvre as many other sectors. Output, uptime and quality come first. That means energy is often treated as a cost that must be tolerated, rather than actively managed.

But the market has made that harder. Even when prices ease, the baseline cost environment remains elevated, and that increases the impact of procurement decisions on profitability.

So the goal here is not to pick the most fashionable contract type. It is to choose a purchasing approach that protects the business from avoidable risk.

When fixed energy purchasing is the right choice

Fixed energy purchasing still suits many manufacturers, especially where budget stability is the priority.

It tends to work well when the business needs a predictable cost base and does not want regular market decisions being made across the year. It also works well in organisations where sign-off is slower or where procurement teams do not have the capacity to manage ongoing energy purchasing decisions.

From a senior decision maker’s point of view, the biggest benefit of fixed is simple:

It gives you a number you can stand behind.

The key point is this: fixed is not “safe” by default. Fixed is only safe if the decision is made with enough time and context.

Because the biggest risk with fixed energy purchasing is not the contract type. It is purchasing too late and locking in under pressure.

For a deeper look at how risk management plays into procurement outcomes, see our guide on energy procurement strategies and hedging for the year ahead, especially helpful if market volatility is a key concern.

When flexible energy purchasing is the right choice

Flexible energy purchasing tends to be most relevant when consumption is high enough that timing matters, and when the business wants to reduce exposure to a single buying point.

If you buy everything at once, one market moment effectively sets your cost for the year ahead. Flex energy purchasing reduces that “single day” risk by allowing the business to secure volume in planned stages.

However, the difference between a flex contract that works well and one that becomes frustrating usually comes down to one thing:

Having a strategy in place.

A flex contract should not be treated as “wait and see”. It should have a clear buying plan that sets out:

• How often the market will be reviewed
• The frequency of purchasing (for example, staged decisions across the contract term)
• The risk position the business is aiming for
• Who makes the call, and when decisions must be made

Flex is not about chasing the lowest price. It is about control and reducing regret risk. That only works when the business agrees the strategy upfront.

The bit most manufacturers miss: fixed vs flex is not the real decision

Most procurement outcomes are driven less by the contract type and more by the process behind it.

From our perspective, the real decision is this:

Do you want certainty, structured flexibility, or a hybrid of both?

Manufacturers tend to fall into one of three positions:

• Certainty-led: “We need a cost base we can defend.”
• Control-led: “We want to reduce timing risk and keep options open.”
• Hybrid: “We want confidence on most of the cost, without tying everything to one day.”

Most businesses sit in the hybrid category, even if they have not labelled it that way yet.

What goes wrong in practice (and why it matters)

If you want to make the right choice, it helps to understand the common failure points we see across manufacturing.

Why fixed contracts disappoint

Fixed contracts rarely disappoint because the concept is wrong. They disappoint because of execution.

The most common issues are:

• Renewal starts late, so the business locks in quickly with limited comparison
• Decision-making focuses on unit rate rather than total delivered cost and exposure
• The contract term is chosen without stress-testing what happens if usage changes

The outcome is predictable: certainty, but at a cost level the business struggles to defend later.

If you’re unsure what to look for when reviewing supplier quotes, our article on business energy deals and what to check before you switch highlights the key areas often overlooked, including pass-through charges and price breakdowns.

To avoid rushed or poorly informed procurement decisions, it’s worth reading our practical guide on how to search and compare business energy quotes, which outlines the comparison process and hidden factors that can influence cost.

Why flex contracts fail

Flex contracts do not fail because they are too complex. They fail because there is no strategy.

The common issues are:

• No agreed energy purchasing plan or frequency of buying
• No clear decision owner
• Hesitation leads to delayed decisions and reduced control

The outcome is also predictable: the business ends up exposed, then makes a rushed decision anyway.

A realistic manufacturing scenario

A multi-site manufacturer with stable year-round production wanted budget confidence after a volatile period.

Historically, they fixed everything at renewal. That gave certainty, but they disliked how exposed they felt to timing. One expensive buying point could define their cost for the full year.

They moved to a hybrid (phased) purchasing approach. They secured the majority of their forecast early so finance had a defendable base cost, then purchased the remaining volume in stages using a pre-agreed strategy, including decision points and buying frequency. Operationally, nothing changed. Commercially, they reduced “single day” risk while maintaining budget confidence.

A simple way to choose without guessing

If you want a practical decision tool, start with these four questions.

1) How important is budget certainty this year?

If budgeting pressure is high and margin is tight, fixed or mostly-fixed approaches tend to win internally.

2) How comfortable is the business with ongoing market decisions?

Fixed keeps decisions minimal. Flex requires a rhythm of reviews and sign-off points.

3) How much would you regret being locked into one buying point?

If that feels like an unnecessary risk, phased energy purchasing can help reduce exposure.

4) Can you agree a strategy before you go to market?

If the answer is no, full flex is usually a poor fit. A structured approach with clearer guardrails is often more suitable.

Why many manufacturers choose a hybrid approach

In practice, a large number of manufacturers prefer a middle ground.

A hybrid approach gives finance a stable base and gives the business a structured way to reduce timing risk without introducing unnecessary complexity.

It aligns with how manufacturing organisations operate:

• Budgets need to be defendable
• Decisions need structure
• Operations need consistency
• Risk needs to be managed without distraction

This is not about “making it complicated”. It is about creating a plan the business can stick to.

What to ask before you sign anything

Regardless of whether you choose fixed, flex, or hybrid, you should be able to answer:

What is our expected total delivered cost, not just the unit rate?
What is fixed, and what is pass-through exposure?
What assumptions are included in the quote?
If our consumption changes, what happens?
If we are choosing flex or hybrid, what is the strategy, buying frequency, and decision process?
If those points are unclear, the contract may carry more risk than you intended.

A practical next step if your renewal is within 6–9 months

If your contract end date is approaching, the best move is not deciding fixed or flex immediately.

The best move is starting early enough to keep choices open.

That gives you time to agree risk tolerance internally, validate consumption assumptions, and compare contract structures properly rather than under time pressure.

If helpful, Tritility can support with a structured review covering delivered cost visibility, renewal options, and whether fixed, flex, or hybrid energy purchasing is the best fit for your site and risk tolerance.

Are you ready to discover whether a fixed or flex contract is best for your business? Take our fixed or flex quiz to find out. Alternatively, if you have decided on the best course of action, get a quote. Or should you require further assistance, please contact our team.