Flexible contracts
Flexible contracts, or flexible power supply contracts is a term used in the power supply industry in the United Kingdom.
Historically, in the UK, all users of power were on one of a range of standard tariffs. These tariffs varied with the type of usage, the shape of the profile, location, etc. The cost of the energy, metering, and delivery were wrapped up into a single (or perhaps several) kWh figure, and perhaps a demand charge. The key point is that these tariffs combined the energy cost with all the other charges - metering, transmission and so forth.
In a flexible power supply contract a user enters into a contract with an Energy Supplier who undertakes the delivery and metering of the power purchased by the user, but not for the purchase of that power. This type of delivery contract is entered into on a specific date, usually for a specific period of time - 1 year being the typical minimum
The flexible contract then allows the user to contract separately for the actual power he requires, directly with a generator over the lifetime of that delivery contract. If, say, a flexible contract covers an 18-month-ahead period, then the holder of the contract can choose when to buy power – typically in tranches of months at any point in that forward-looking 18-month period.
Availability[edit]
This is generally only applicable to large users of power able to have a dedicated purchasing team studying market data, or a purchasing consultant, who will pick the best time to buy power for selected periods ahead - "fixing".
Advantages[edit]
One of the claimed advantages is that by judicious studying the market, and choosing optimal time for purchase, and if necessary and appropriate selling back – "unfixing" – considerable gains can be made.
Typical energy companies offering flexible contracts are, for example: Centrica, EDF, GDF, Eon,
The company arranges to purchase with a generator under instruction from the buyer. The buyer uses various tools such as trading screens from large brokers – Bloomberg and the like.
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