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Energy Procurement

Energy procurement involves assessing what your business’ energy requirements are, with a view to finding the most suitable energy contracts on the market for your business.

The process of energy procurement reduces risks for your business and comes with a host of potential benefits. It pays to have a plan and crafting an energy procurement strategy gives you the best chance of ensuring your business uses energy in an optimal manner.

Lauren Smith
Mike Rowe
Written by Lauren Smith
Edited by Mike Rowe
11 November 2025
7 mins read

What is energy procurement?

Energy procurement is the process of strategizing and securing the best energy contract on the market for your business’ particular needs.

This means analysing your gas and electricity usage and researching suppliers across the market. Factors like the size of your business, sustainable targets , bulk purchasing of energy, and how flexible you want your contract to be all come into play when crafting an energy procurement plan.

Either you can engage a third-party consultant or energy broker to do your energy procurement, enlist an employee or go it alone. Irrespective of what route you take, the goal of energy procurement is to find the best energy deal for your business.

Types of corporate energy procurement contracts

In the UK, corporate energy procurement contracts can vary depending on factors such as the size of the business, energy consumption patterns, risk tolerance, and sustainability goals. Here are some common types of corporate energy procurement contracts:

Fixed Contracts

A fixed-price contract, also known as a fixed-term contract, is a contract where the price per unit of energy is fixed for a specified period, typically ranging from one to five years.

This means the price you pay is not affected by fluctuations in the wholesale energy market, providing you with price stability and predictability. Your energy bills will change depending on how much energy you use monthly.

The drawback of fixed-term contracts is that you do not profit if unit rates and standing charges drop in price during your contract, as your rate will stay the same. You have to wait until the end of your contract before finding a new deal that reflects the market rate.

Variable Rate Contracts

A variable rate contract is a contract where the price you pay for the wholesale portion of your energy bill fluctuates along with the market.

Typically costing more per month than a fixed-term contract, a variable rate contract offers your business a higher degree of flexibility as you can end it or switch at any time. This is helpful for businesses in a range of circumstances, for example if you are only going to require a premises for a month or two.

Flex Approach Tariffs

These tariffs are suitable for businesses who want to buy energy in bulk. On a flexible approach tariff, you can buy business energy at wholesale market rates for months, or even years, into the future.

This enables businesses to take advantage of favourable market conditions to save in the long term – particularly large businesses that tend to have deeper pockets and greater energy demands.

While flex approach tariffs offer the chance for greater financial savings, they also expose businesses to market price fluctuations and the prospect of ‘out of contract’ rates.

Pass-through Tariffs

A pass-through tariff divides your bill between fixed wholesale energy prices and other charges that are ‘passed through’ at market rates.

Passed-through charges – also known as non-commodity charges - include energy infrastructure costs (such as TNUoS and DUoS), feed-in tariff charges, and national grid levies.

Non-commodity costs now add up to almost 65% of your energy bill and are exponentially increasing. Opting for a pass-through tariff requires diligent research and forecasting to ensure your business would benefit from paying market rates going forward. Typically, larger businesses or energy-intensive businesses are the market for pass-through tariffs, as they do not require price certainty.

How can we help your business with energy costs?

With rising energy prices and evolving market dynamics, finding the right energy solution can be challenging. That's where we come in. We offer businesses a convenient and efficient way to compare energy tariffs, identify cost-saving opportunities, and make informed decisions to optimise their energy expenditure. In other words, we take the reigns on your business energy procurement strategy.

Our experts will advise you throughout the energy procurement process whilst considering the needs of your business. We empower businesses to navigate the complex landscape of energy procurement, enabling them to find the most competitive deals tailored to their specific requirements and preferences.

Who is involved in the energy procurement process?

There are typically three parties involved in the energy procurement process: the customer, the supplier, and the third-party energy broker/consultant.

  1. 1

    The Customer

    A business that requires a business energy contract. Typically the point of contact is the CEO or someone specifically appointed to liaise with an energy broker and supplier.

  2. 2

    The Supplier

    The energy provider that supplies you with energy.

  3. 3

    Energy Broker/Consultant

    An energy broker acts as an intermediary between the customer and the supplier. They work collaboratively with the business to assess their energy needs and find them the most suitable energy contract.

Why should your business use energy procurement services?

Energy procurement services, such as energy brokers and consultants, are a useful way of maximizing your business’s energy efficiency and saving you time and money. Energy brokers and specialised consultants have expertise in securing businesses’ bespoke energy deals.

Here’s why your business should consider energy procurement services:

  • Cost-effectiveness

    Energy procurement services leverage market expertise and industry insights to help businesses secure cost-effective energy contracts that perfectly meet their needs. Through market analysis and existing relationships, energy brokers can ensure you get the best value deal on the market.

  • Saving you time

    Finding your own energy supplier can be time-consuming and resource-sapping, especially for businesses with limited experience in this area. Energy procurement services streamline the procurement process, freeing up valuable time for you to focus on your business.

  • Expert guidance

    Energy markets are subject to volatility and price fluctuations, especially in these times characterised by so much political uncertainty. Energy procurement services help businesses mitigate these risks by providing expert guidance on market dynamics and helping businesses navigate contractual terms and conditions to minimise exposure to price volatility.

  • Identify stealth charges

    Energy brokers have been around the block and can rat out hidden costs tucked into contracts by smaller, shadier providers. You can rest assured that they’ll read the fine print and steer your business away from these unscrupulous suppliers.

  • Sustainable targets

    It’s 2025, and all businesses have sustainability targets to meet. The UK government’s target of net zero by 2050 is underpinned by several incentivizing schemes for businesses to go green. It pays to be environmentally friendly, and energy procurement services can help businesses identify renewable energy suppliers, negotiate favourable terms for green energy contracts, and harness greater amounts of renewable energy.

What is the best energy procurement strategy?

Strong energy procurement strategies for businesses combine elements of cost efficiency, risk management, and sustainability. However, the best energy procurement strategy varies depending on your business needs.

For example, a smaller company might value the price stability of a fixed-term contract due to their tighter budget. As such, they ought not entertain the option of higher risk, flexible deals for higher long-term financial returns which could appeal to some energy intensive larger businesses.

Here are some factors to consider when searching for the best gas and electricity supplier/tariff for your business:

Your business’ energy needs

Analyse your business's energy consumption patterns and identify peak demand periods to tailor your procurement strategy accordingly.

Cost-effectiveness

Look beyond headline prices and consider the overall cost-effectiveness of the supplier's tariff. This includes assessing factors such as unit rates, standing charges, contract terms, and any additional costs or fees.

Shop around

Compare quotes from multiple suppliers to identify the most competitive offer that aligns with your budgetary requirements.

Contract flexibility

A flexible contract structure can provide greater agility to adapt to changing business needs and market conditions over time.

Customer service reviews

Assess the quality of customer service and support provided by the supplier, including responsiveness, reliability, and accessibility. Check online reviews from trusted services, such as TrustPilot, to determine the quality of customer service an energy supplier provides.

Sustainability

Prioritise suppliers that demonstrate a commitment to energy efficiency and sustainability initiatives. Look for tariffs that incorporate renewable energy options, green certification schemes, and carbon offsetting programs to support your business's environmental goals.

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