Energy Market
Fixed vs Flexible Business Energy Contracts
Budget certainty against market exposure, and which businesses each suits.
7 min read · Updated 11 August 2026
Most small and medium businesses buy energy on a fixed contract, but larger consumers sometimes have the option of flexible ('flex') purchasing. Each suits a different appetite for risk and a different level of internal resource to manage it.
Fixed contracts
A fixed contract locks in a single unit rate for the whole term, giving complete budget certainty. You know exactly what you'll pay per kWh regardless of what happens in the wholesale market during your contract. The trade-off is that you can't benefit if wholesale prices fall after you've fixed, and exiting early usually carries a termination charge.
Flexible contracts
Flexible purchasing allows a business (usually a larger consumer with dedicated energy management resource) to buy energy in tranches over time, rather than in one fix, spreading exposure across different market conditions. This can smooth out the highs and lows of the market but requires active monitoring and a higher tolerance for uncertainty in the final blended cost.
Which suits which business
In practice, the choice tends to fall out fairly naturally based on consumption and appetite for risk:
- Small and medium businesses: fixed contracts, for budget certainty and simplicity
- Larger, half-hourly metered sites: sometimes flexible, if there's resource to manage it
- Businesses wanting one number for the year: fixed
- Businesses with in-house energy expertise and risk appetite: may consider flexible
Ready to see your own options?