Large businesses benefit from more options and flexibility in negotiating bespoke energy contracts than smaller businesses. The best energy contract for your large business will depend on several factors, including its industry, size, location, and consumption. Here is an overview of some of the most common types of contracts for large businesses:
Fixed contracts
Fixed contracts allow businesses to lock in a set price per unit of energy for the duration of the agreement, which typically ranges from one to four years. While costs can still vary depending on energy consumption, a fixed contract provides protection against rising market prices. This helps budgeting by making energy costs more predictable.
Part flexible contracts
A part flex contract offers a middle ground between fixed and fully flexible contracts. You can fix the price of some of your energy usage while keeping the option to benefit from market changes on the rest. This gives you some security while still allowing for potential savings with market fluctuations.
Fully flexible contracts
Fully flexible contracts give you complete control to take advantage of market fluctuations, providing the potential to benefit from falling prices but also carry the risk of price increases. They are suitable for businesses with a strong understanding of and eagerness to engage with the energy market.
Pass-through contracts
A pass-through contract separates the cost of your energy from the non-commodity charges, like network and policy costs, which are passed directly to you at the market rate. While the unit price for the energy itself can be fixed, the other charges can fluctuate based on market conditions. Like a flexible contract, it can allow you to benefit from market fluctuations but can also mean less predictability in your overall energy bill.
Green energy contracts
Some energy companies now offer green tariffs as standard, providing 100% green energy or blending renewable sources with traditional ones. Like traditional energy, green energy options are available with fixed, flexible, or pass-through contracts.