How does flexible energy purchasing work?

Flexible energy purchasing allows for more wiggle room when it comes to taking advantage of market opportunities to get the best price and protect against rising costs of energy. Customers are able to make savings through economics of scale, lower management fees and access to the live wholesale energy markets.

Unlike our Fixed products, with Flexible Energy Purchasing we can buy energy several times throughout the year and up to five years in advance in order to get the best price for you. By locking in an index price, we are able to protect that block of energy against any future variance in the market. For all our flexible customers, we set a target rate to purchase at and a cap that we won’t exceed, providing some certainty and working to minimise risks.

Savings surrounding the fully delivered cost of energy can never be guaranteed as the energy market can be very unpredictable. However, energy users will see savings in non-energy costs (lower supplier management fees, lower shaping fees and lower risk premiums) and they will have access to lower prices for energy on the wholesale market.

The invoices for a flexible energy contract are calculated by the energy supplier in the same way as invoices for fixed energy purchasing contracts. They take an average weighted cost of energy in line with the trades executed and add non-commodity charges to form the unit rates and standing charges. If an energy user opted for pass through of certain charges, these will be shown as separate lines on the energy bill.

At amber energy, we offer and execute several flexible energy procurement and risk management strategies which offer different levels of risk and strategy to suit your businesses requirements. 

We work closely with our clients to understand their attitude to risk and their need for budget certainty in order to design a bespoke strategy that is right for them. If unsure, amber energy would recommend that energy users opt for a risk averse (defend) strategy to start with, while getting familiar with more complex flexible energy procurement options. Whilst this strategy may not be the most rewarding, it offers the most security around budget protection. Energy users will have an option to change the strategy in the following trading year.

FAQJoe Hickman