Most people are familiar with domestic energy contracts, but business energy is a different ball game.
Depending on the size and nature of your business, there are different contract types and markets, all of which are based on different volumes and consumption. In short, it’s a minefield.
Most business owners are opting to work with an expert in the field to offer advice and guidance on how to manage their costs and consumption. The Green Energy Advice Bureau (GEAB) offers their expert advice on the complexity of business energy.
There are two stages to managing costs with your business energy: the price you negotiate with the supplier and your annual consumption. Energy management is much more than getting the best rate, most businesses are now adopting more sustainable approaches to their consumption, installing solar panels or Energy Monitoring Systems (EMS) to help identify their usage and wastage. This enables them to make annual reductions in their emissions and, by default, their annual spend. GEAB offers both of these solutions Cap Ex free to help businesses achieve their net zero goals without the burden of a huge upfront cost.
On top of making sure your business is operating as efficiently as possible, it’s important to get the right rates for your business, which is something many businesses don’t know enough about – the right contract type.
There are 3 main types of business energy contract. The larger the annual spend, the more flexibility the business has when negotiating a bespoke offer with a supplier. However, there are options available for businesses of all sizes to help manage costs and secure budget certainty. GEAB works with businesses and suppliers to secure the right deal for all parties.
The energy market has seen huge amounts of volatility over the last few years, and businesses have been heavily impacted. Because of this, there are now 3 core types of contract– to enable businesses to choose the one that is right for them.
The three options are fixed, simple flex and full flex.
GEAB makes contract recommendations based on the nature of your business, your appetite for budget certainty, and the nature of the market at the time of purchase.
A fixed contract is the most similar to a domestic contract. You buy your energy and lock in the price for the duration of the contract. While a fixed contract can offer budget security, being locked in for the same price throughout the term could mean you end up overpaying for your energy. You’re at the mercy of the market on whichever day you sign, and if energy prices drop the following month, you’re stuck paying above market rate with no option to switch or cancel.
With this contract, you don’t have to fix your price at point of signature, instead you purchase your energy at set intervals throughout your contract.
Unlike a full flex contract, simple flex allows you to set your pricing multiple times a year, taking advantage of seasonal changes. This allows for more security when forecasting costs, with some flexibility to take advantage of drops in pricing. Our consultants monitor the live market, securing you a new unit price at your pre-determined intervals.
This contract type is available to available to larger I & C clients. Full flex offers your business the most flexibility when purchasing energy and managing consumption, in line with your projected net zero and carbon targets.
This contract gives you the freedom to react to market changes based on pre-agreed risk management strategies. GEAB’s experts analyse markets and transact on your behalf, monitoring prices and global events to manage risk and forecast costs.
There are many factors that need to be evaluated when making this decision. GEAB offers a free consultancy to guide you to make the right choice with contracts and suppliers.
GEAB works with your business to decide how to split your contract into defined periods and tranches. It’s your choice, and they follow your guidelines when selecting the options that best suit your risk appetite and budget priorities.
With GEAB’s industry knowledge and tools, they can help you manage your costs and risk exposure. This gives you the stability to forecast energy costs whilst benefitting when wholesale energy prices fall.
– An energy expert will carry out a portfolio analysis of your business
– You will receive a free consultation, looking into the nature of your operations and current requirements
– An agent will carry out a bill validation and unit price analysis of your current contract
– You will receive a free sustainability consultation with options to reduce annual consumption and emissions
– For fixed price customers, GEAB will negotiate an offer on behalf of your business directly with a supplier
– For flex clients, GEAB will carry out a full tender across all suppliers and produce the best options to suit your business
