Through our special access to flexible energy markets, we bought 200,000,000kWh of gas, and sold 100,000,000kWh of electricity, for our clients last week. This translated into a total contract value of £8m.

Oh yes, and we also saved our clients £100,000 p.a. in supplier margins in the process.

Companies with a high energy use can benefit from these flexible energy contracts. Whilst they are a more complex way of buying and selling energy, they provide much more clarity with regards to supplier costs and margins. This allows our clients to fix energy costs when it is right for them, not just when the contract is due for renewal.

However, the negotiation and management of these contracts is subtly different to conventional deals, as typically the only negotiable element is the supplier administration cost.

The cost of the energy itself (i.e. the lion’s share of the bill) is bought at the same ‘wholesale’ price offered by all suppliers, and is determined by the market.  There’s then a whole host of non-negotiable, pass-through costs from the distributor as well as various taxes and levies. 

Therefore, the trick is to get the best price for the supplier administration costs.

This will help the client to adapt their use, to best capitalise on pass-through cost price triggers, and to get the best credit terms; on larger gas contracts, some suppliers might request several £100,000s on deposit, whereas others do not.