Flexible Price Contracts
Let your price track the market
At Mindful Energy, our variable supply contract service targets a 15% saving against traditional fixed price offers.
We do this by giving smaller businesses access to buying strategies normally only available to industrial or large corporate organisations.
A flexible contract (also called a variable or tracker contract) lets your price follow the energy market on a daily or monthly basis, a bit like a tracker mortgage, rather than fixing all of your energy in advance. That means lower risk premiums, and you benefit if prices fall.
Advantages of flexible contracts
Reduced Risk Premia
When a supplier provides a fixed price supply offer, they do so not knowing what the future holds. As such, they build a sensible level of premium into the rates. Variable rates have a lower risk to the supplier and as such they include less risk premia in their offers.
Leverage Market Fundamentals
Buying closer to the time you use the energy means paying less for the supplier's risk, although prices can move either way. A variable rate contract lets you take advantage of that.
You Can Fix At Any Time
If the wholesale energy price falls to a point that is really attractive, we are able to fix the remaining 'open' energy volume for you, providing the opportunity to maximise your chances of getting the lowest price while creating budget stability.
Win-Win Mentality
A variable rate enables you to increase your chances of getting a lower price while retaining the option of fixing at any time. This level of flexibility enables businesses to manage their energy costs more dynamically, creating a win-win situation.
For those customers that are familiar with variable/flexible supply contracts, more bespoke strategies might be required. Mindful Energy's core strategies are defined below.
Risk Strategies for the Advanced Buyer
The Rolling Hedge
This is where 100% of your forecasted annual energy consumption is purchased 3, 6 or 12 months ahead of delivery. As an example, on a 6-month rolling hedge strategy, your October renewal would be purchased no later than the end of March. This is a low-risk approach to flexible purchasing.
Fix & Float
You purchase 25%, 50%, or 75% of your contracted energy volume prior to the contract starting. The remaining energy is purchased a quarter before the month of delivery. For example, you purchase 50% of your energy needs and then buy the remaining 50% of each month 3 months prior to that month starting.
Aggregated Purchasing
Many businesses do not use enough energy to qualify for a flexible contract. Leverage the buying power of many other UK businesses by joining one of our gas or electricity purchasing baskets and access flexible buying strategies.
Dynamic Purchasing
We create a tailored risk management strategy specific to your business. This includes a number of risk workshops to help you define your requirements and make the most informed decision.
Is a flexible contract right for you?
Flexible buying lets you take advantage of falling prices without giving up the option to fix. It suits businesses that can live with some movement in their energy costs.
If you need one fixed number for your budget, a fixed contract is the better fit, and we will tell you so.
We manage the buying and the market watching, so you can focus on running your business. Get in touch to talk through whether a flexible contract suits you.
Benefits of flexible contracts
Lower risk premiums
You pay closer to the wholesale price on the day, rather than a supplier’s estimate of what the market might do.
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Flexibility
You can fix some or all of your remaining volume when prices look right, and leave the rest to track the market.
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Market monitoring
We watch the market for you and flag when it is worth buying, so a price spike is less likely to catch you out.
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Renewable options
Flexible contracts can include renewable-backed supply, and we will show you what it costs before you choose.
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Built around your usage
We match the buying strategy to how and when you use energy, not to a standard profile.