Why You Should Secure Your Business Energy Contract Early to Avoid Pitfalls

For UK business owners, managing overhead costs is crucial for maintaining profitability and staying competitive in an ever-changing economic landscape. One often overlooked aspect of running a business is energy procurement.

Many businesses leave the renewal of their energy contracts to the last moment, only to find themselves facing higher costs and unexpected pitfalls. Let’s delve into the reasons why business owners should consider finding prices for their next business energy contract early – and consider the potential pitfalls of leaving it until a current contract has expired.

Understanding Market Fluctuations

To truly appreciate the importance of securing your business energy contract early, it’s essential to grasp the concept of market fluctuations. These factors play a significant role in determining the optimal timing for locking in your energy rates.

Market Fluctuations

The energy market is highly dynamic, influenced by various factors such as supply and demand, geopolitical events, weather conditions, and regulatory changes. As a result, energy prices can experience significant fluctuations over time. These fluctuations can occur on both short-term and long-term scales.

Short-term fluctuations are often driven by immediate factors, such as changes in weather patterns or sudden disruptions in energy supply. These can lead to short-term price spikes or dips, which may impact your energy costs if your contract is up for renewal during such a period.

Long-term fluctuations, on the other hand, are driven by broader market trends and economic conditions. For example, shifts in global energy demand, the emergence of new technologies, and changes in government policies can all have a profound impact on energy prices over several years.

Understanding these fluctuations is crucial because they can directly affect the rates you pay for your business energy. By monitoring market trends and working with a reputable energy broker, you can better time your contract renewal to take advantage of favourable market conditions.

Why Timing is Key

Timing is key in energy procurement because it allows businesses to secure competitive prices, avoid costly deemed rates, and harness market fluctuations for maximum savings.

1. Avoid Deemed Rates and Price Hikes

One of the most significant reasons to start the energy procurement process early is to avoid being stuck on deemed rates or experiencing sudden price hikes. Deemed rates are the default rates that energy suppliers charge when a business energy contract expires without a new one in place. These rates are significantly higher than negotiated rates and can quickly eat into your budget.

By initiating the procurement process well before your current contract expires, you can secure a new contract with favourable terms and rates, ensuring that you don’t fall into the expensive trap of deemed rates. Waiting until the last minute leaves your business vulnerable to price increases in the energy market, which can be triggered by various factors such as geopolitical events, supply chain disruptions, or fluctuations in demand.

2. Benefit from Market Fluctuations

Energy markets are highly dynamic and influenced by a multitude of factors. Prices can fluctuate daily or even hourly, making it challenging to predict the best time to secure your energy contract. However, starting the process early gives you the advantage of monitoring market trends and making informed decisions about when to lock in rates.

For instance, if you start the procurement process when energy prices are relatively low, you can capitalise on these favourable market conditions and secure a long-term contract at a competitive rate. Conversely, waiting until the last minute might mean locking in higher rates during a market upswing. By staying proactive, you can align your energy procurement strategy with market fluctuations to save your business money.

3. Gain Access to Competitive Offers

Another compelling reason to begin your energy procurement process early is to give yourself ample time to explore and compare offers from different suppliers. The energy market is highly competitive, with various suppliers vying for business customers.

By engaging a broker at an early stage, you open the door to an extensive selection of offers, far beyond what you might find on your own. These brokers have access to a broad network of suppliers and can cast a wider net to source competitive solutions that fits with your organisations unique requirements. This strategic advantage can lead to substantial cost savings, as brokers are adept at negotiating discounts and incentives that align with your preferences and objectives.

Leverage the Expertise of a Reputable Broker

Navigating the complexities of the energy market can be daunting for business owners, especially if you lack the necessary expertise. This is where reputable energy brokers come into play. These professionals are well-versed in the energy market and have the knowledge and connections to secure competitive deals for your business.

Using a reputable broker offers several advantages:

a. Market Knowledge: Brokers stay up-to-date with market trends and can provide valuable insights into when to secure contracts at the most advantageous rates.

b. Supplier Relationships: Brokers often have strong relationships with energy suppliers, which can result in better terms and rates for your business.

c. Time Savings: Energy procurement can be time-consuming, but brokers can handle the entire process on your behalf, allowing you to focus on running your business.

d. Cost Savings: Brokers have the negotiating skills to secure competitive terms and rates, potentially saving your business a substantial amount of money.

e. Tailored Solutions: A reputable broker can align energy procurement solutions to your specific business needs, ensuring you get a contract that fits with your budget and energy consumption patterns.


In conclusion, UK business owners should consider securing their energy prices early to avoid falling into the pitfalls of deemed rates and price hikes. Starting the procurement process ahead of your contract expiration date allows you to benefit from market fluctuations, access competitive offers from various suppliers, and leverage the expertise of a reputable broker.

Don’t leave your business’s energy costs to chance. By taking a proactive approach, you can maximise savings, minimise risk, and ensure that your business remains financially resilient in an ever-changing energy landscape.