Your Guide to Flexible Energy Contracts

If you’re responsible for energy in your business, you might currently be on a fixed contract. 

While you’ll always know what you’ll pay on a fixed contract, if prices fall, you’re stuck on the higher rate. 

However, what if you could buy energy at a lower price, anytime you needed it?

That’s the power of a flexible energy contract.

If you’re new to the concept of flexible contracts or are considering making the switch, we’ve put this guide together to help. 

We’ll look at the pros and cons of flexible contracts, the different types of contracts available, and whether a flexible contract is the right choice for your business needs.

Want to know more about the differences between fixed and flexible contracts? Check out this article.

What is a Flexible Energy Contract?

A flexible (or flex) energy contract lets you buy gas and electricity in small, regular amounts from the wholesale market.

This means you can buy when the market price is low and potentially save money.

Think of a flexible energy contract like trading on the stock market – you want to buy when prices have dipped and avoid investing when prices spike.

Are There Different Types of Flexible Energy Contracts?

Yes. Different energy suppliers will offer different types of contracts, so if you’re looking to switch, it pays to shop around.

The two main types of flexible energy contracts are full flex and basic flex.

Basic flex contracts adjust their prices less frequently, making them an ideal choice for businesses that want to move to a flexible contract but don’t have much time to monitor energy prices.

Full flex energy contracts adjust their prices in line with real-time energy market conditions, meaning that prices can go up and down in the space of 30 minutes. This contract is great if you want to make large savings, but it requires active monitoring to make the most of it.

A good energy consultancy will help you choose the right type of flexible energy contract based on your needs, budget, and resources.

How Far Ahead Can You Buy Energy?

It’s a common misconception that you can only purchase energy that you will immediately use.

Most flexible energy contracts will let you buy weeks and months ahead of time. Some will even allow you to buy up to five years in advance.

The benefit of buying as far ahead as possible is that you can take advantage of lower prices and have peace of mind that you’re not paying over the odds. 

Although, of course, you need to do your research and understand the energy marketplace trends that may affect prices in the short term and long term.

What Are the Advantages of a Flexible Energy Contract?

The main advantage of a flexible energy contract is that you can make significant savings on the energy you purchase, all by tracking the market and buying when costs are low.

You can even make money on unused energy by selling it back to the market!

Compare and contrast with a fixed contract where you are contractually bound to the same rate, even if the market cost drops.

Another benefit is that a flexible contract encourages you to think about how you use energy. As you become more aware of the cost of energy, it’s easier to make significant changes to help you lower your energy usage and become more sustainable.

The final advantage of a flexible energy contract is that you are in complete control of your business energy, meaning you can manage your energy costs with precision.

What Are the Disadvantages of a Flexible Energy Contract?

Energy prices can spike, for example, in winter or because of international events. This can mean if you’re not careful, you can pay over the odds for your gas and electricity.

Another disadvantage is that you need to invest time and resources into monitoring the energy market, especially if you opt for a full flex contract. This can mean you spend more time determining when to buy energy than you do running your business.

However…

If you work with an energy consultancy, you can manage your flexible energy contract more efficiently. 

At Tritility, we’ll monitor the market on your behalf and recommend the perfect time to buy your energy – meaning one less thing for you to worry about.

Is a Flexible Energy Contract Right for Your Business?

You might benefit from a flexible energy contract if:

• You use over 500k kWh of gas or electricity a year. The more you use, the more purchasing options are open to you
• You’re also open to risk. With a flexible energy contract, there’s the chance that your bills may go up as well as down
• You have a dedicated energy manager or energy procurement team. Flexible energy contracts need closer and more involved management than fixed ones
• You want complete control over your energy bills. Flexible contracts let you manage your gas and electricity bills with laser precision

Ready to Flex on Your Energy Bills?

A flexible energy contract may sound daunting, especially if you’ve always opted for a fixed contract.

However, it can be a fantastic way to potentially save money and get lots of valuable insight into how you use energy as a business. 

And the best thing is that with an energy consultancy like Tritility in your corner, you can take advantage of the lowest rates and get access to tools to ensure you always stay in control.

Want to know more about how flexible contracts work and if they’re right for you? We’re always happy to chat – get in touch and let’s talk energy.