Roughly 90% of UK business energy contracts are fixed-price. The supplier sets a unit rate, a standing charge and a contract length up front, you sign, and that's the price for the duration.
The remaining 10% are flexible, and they look more like commodity trading than utility procurement. Here's when each one wins.
Fixed contracts: what you get
A locked-in unit rate for the duration of the contract, typically 12, 24, 36 or 48 months. Budget certainty, no upside if wholesale prices fall, no downside if they spike.
Best for: businesses with predictable consumption, limited finance team capacity, and a preference for budget certainty.
Flexible contracts: how they work
Rather than locking in a single rate up front, a flexible contract lets you 'click' portions of your forward consumption at different points in time. You might fix 25% of next winter's volume in January, another 25% in March, and so on.
Best for: businesses with £250k+ annual energy spend, an experienced procurement function (or a TPI partner running the strategy), and appetite for slightly more administrative complexity in exchange for better long-run pricing.
Worked example, 3-site café chain
Annual consumption: 84,000 kWh electricity across three sites. Annual spend: ~£21,000.
Fixed-rate recommendation: A 24-month fix at today's rates locks in budget certainty for the busiest period of the year. Total cost predictability: £42,000 over the term.
Flexible recommendation: Not applicable. Annual spend is well below the threshold where flex strategies justify the administrative overhead.
When to talk to a procurement specialist
If your annual energy spend is north of £100k and you've never explored flex, it's worth a 30-minute call to understand what's possible. Even if the answer is 'stay fixed', you'll know why.
Sarah Whitfield
Procurement Director
Part of the Scottish Prime Energy procurement team, 500,000+ UK businesses switched, £150M+ saved.