The Future of Flexible Procurement

For decades, the standard approach to business energy procurement has been the fixed-rate contract: agree a price on a specific day for the next 1-3 years. While this provides budget certainty, it also exposes businesses to massive timing risk.

The Problem with Fixed

If you happen to sign a fixed contract when the market is at a peak, you are locked into those high prices for the duration of the term, even if the market crashes the very next day. You are also paying a “risk premium” to the supplier for them to guarantee that price.

The Flexible Alternative

Flexible procurement decouples the purchasing decision from the contract start date. Businesses can buy energy in smaller chunks (months, quarters, or seasons) gradually building up their required volume over time.

This strategy averages out the cost, smooths exposure to market volatility, and allows businesses to capitalize on market dips. Historically the domain of only the largest energy users, new “basket” or “framework” structures now allow mid-market businesses to access these wholesale strategies.