With current world events causing unprecedented highs in energy prices, it’s no wonder that the energy market and contract renewals are becoming even more difficult to navigate.

So, it’s understandable that there is some confusion over when the best time - and what the best approach - may be for renewing an existing fixed energy contract.

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Consider the longer-term

In the past, you may have been more familiar with signing up for a 12-month fixed-term contract. But with the ever-changing – and frankly eye-watering – price of wholesale energy, you could instead consider securing a longer-term option.

For example, a three, four or even five year fixed contract is likely to soften the cost, as commodity prices further out in 2023 and 2024 are trading at a lower price in comparison to the current year.

Look at different energy contracts

When you’re buying energy on a fixed contract, especially now, it’s beneficial to have a contract that works for your business. Fixed contracts come with a number of options that can be tailored to your needs. That means being able to lock-in parts of your contract, such as the commodity element, whilst floating the non-commodity element - and you can also choose to take renewable electricity.

Fixing your contract is a simple and transparent way of securing your energy supply at a pre-agreed rate, providing budget certainty and straightforward management.

However, it could be beneficial for your business to consider a more flexible contract, which means you can take advantage of the changing wholesale energy market. This type of contract allows you to purchase energy in blocks or seasons so you have the security of fixed costs for part of your energy needs but with the chance to go back to market to buy more energy at a time when (hopefully) the prices have softened.

For more information on this, take a look at my latest vlog, which you can watch here.

If you would like to speak to someone about the different energy contracts on offer – please consult with your Client Lead or Account Manager (existing customers), or drop us an email to info@npowerbusinesssolutions.com.

Understanding UK energy

Making sense of the energy market can be challenging. While a glossary might help guide you through the industry jargon, understanding the causes of market volatility is critical.

You can find out more about where the UK’s energy comes from – and why the costs are so high – in our new report ‘Understanding the UK Energy Market: A Focus on Commodity Costs’, which you can download here – we hope you find it useful.

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