Fixed Energy Agreements
Fixed Energy agreements give your business a clear understanding of what you are expected to spend. This is usually a method taken to avoid market fluctuations and minimise risk.
There are many factors that influence prices in the Energy market, whilst taking a safe approach can give you clarity in the market it also means you are unable to take advantage of any market drops.
The agreement applies to both your agreed Unit rate and daily standing charge for the term of your agreement.
What we regard as the ‘Safe Option’
Advantages
Maximum understanding of monthly outgoings – bar usage fluctuations
Allows for close monitoring for efficient reporting
Usually cheaper than Flexible Agreements
Our team can determine the best agreement term with maximum savings to match your business requirements.
Disadvantages
Locked in price, unable to take advantage of market reductions
Extremely high out of agreement charges
Market fluctuations aren’t always easy to read on a monthly basis. Factors such as weather, economic conditions, pandemics, and global events will immediately influence costs.
Whilst the benefits are clear taking a Fixed Agreement allows a business to have greater security in a volatile market, from our experience it is rare that the market drops enough to make a substantial gain from Flexible agreements. The disadvantage would therefore be huge market fluctuations, we had such an instance when Covid first hit, the markets crashed and surplus Energy was being sold at very competitive prices.
What we regard as the ‘Maximum Risk with Maximum Reward Option’
Advantages
Potentially Lower energy prices
Spread risk
No Take or Pay clauses
Disadvantages
Susceptible to market fluctuations
Maximum risk can result in paying more for your Energy than a fixed term
Budgeting will be a challenge as market fluctuations wont allow for clear financial reporting
Flexible Energy Agreements allow you to take maximum control of your Utilities, giving you freedom and flexibility when it comes to Energy procurement. It lets you buy as much or as little energy as you want at any given period, depending on your requirements. This means you can make wise energy purchases whenever the market is favourable, you determine the amount and the duration.
Businesses could potentially benefit from lower energy prices taking this method of approach, you essentially spread risk by purchasing at various points across your agreement term.
There’s no ‘one size fits all’ approach to Business and adopting this method applies the same principle to Energy.
Clean. Renewable. Efficient.
Get in touch with us to see how we can help manage your Energy and Reduce Costs!