Energy Supply Contracts

Increase your profit as you select the best Energy Supply Contract suited to your levels of consumption and attitude to risk

Making a decision on the best energy deal from different suppliers is not always easy. With multiple daily rates and different tariffs it is important to understand the different energy supply contracts on the market. At PES our energy consultants will work with you to understand your consumption, your perception of risk and which type of energy contract suits your business. With the ability to trade commodities we can advise on how you can save the most throughout the year.

 

As well as traditional fixed and flexible term contracts, PES are also experts in more unconventional contracts such as:

Fixed Pass-Through Contract

This type of fixed contract is recommended for the clients who can be flexible with their energy usage patterns with the main target to avoid the distribution costs associated with different distribution periods. This can prove to be a very cost-effective way of achieving further efficiencies outside of the standard procurement model.

Our systems alert the clients on the different distribution periods and help them avoid the peak period.

This type of contract secures the commodity rates and leaves all other elements of the electricity price passed through at cost from the supplier. At present, there are two main risks associated with this:

  1. The non-commodity element makes up 60% of the overall cost of electricity
  2. The significant legislative changes for 2022 and beyond that will impact your energy spend.

Flexible (Hedged Wholesale)

This product provides clients with more than one purchasing option per year and opens up the wholesale market to enable you to make multiple purchases throughout your supply contract, giving you the ability to manage your wholesale cost on a regular basis. This product proves popular in the spend categories of £3m and above annually but is also available for spends all the way down to £250K.

This product has three main facets of low risk, medium risk and high risk. These take three separate different hedging ratios and apply this to a hedging policy to allow multiple purchases of electricity and sell backs, the frequency of which will be determined what level of risk your portfolio falls in.

To make sure we operate within the parameters of a market we need to exclude ourselves from achieving either extremes of the market. We exclude ourselves from these extremes by participating in the market regularly and ensuring our commitment is balanced across the market curve (having risk spread in both short term and long-term markets).

Flexible Purchasing

In this model, we examine your energy consumption pattern over a year and break it down into tradable pieces allowing you to buy your energy flexibly and simply.

Below is an example of your previous contract period. The grey bars representing different energy trades that range from the month purchased to quarters and futures to demonstrate the mechanics of such purchasing.

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