Contracts and renewal
Fixed, flexible and pass-through business energy contracts
What is the difference between fixed, flexible and pass-through energy?
Contract labels describe how parts of the cost are bought or charged, but they do not tell you everything that can change. A fixed contract may fix some components while taxes, network charges or other items remain variable. Flexible procurement may spread buying decisions over time. Always compare the actual charging schedule and risk allocation, not just the product name.
Written by Energy Guide editorial team · Specialist review: Pending · Source checked:
Fixed does not always mean every line is fixed
A fixed-price product commonly fixes agreed energy-price components for a set term. Other charges may be fixed, forecast and reconciled later, or passed through at the prevailing rate. The contract and quotation should identify the treatment of each material component.
Flexible procurement changes the timing of buying
A flexible arrangement can divide purchasing into tranches or use agreed triggers and windows. It may suit larger or well-governed portfolios, but it needs clear authority, reporting and risk limits. It is not automatically cheaper and does not remove market exposure.
Questions for a like-for-like comparison
Ask each supplier or broker to map its offer onto the same assumptions.
- Which cost components are fixed for the full term?
- Which charges are passed through or reconciled?
- What volume or tolerance rules apply?
- What happens if sites, consumption or law changes?
- Who makes flexible buying decisions and within what mandate?
Sources
These sources support the explanation above. Check the linked source for current rules and eligibility.