Businesses often ask how they can compare fixed electricity rates to buying wholesale. It’s a bit like comparing apples and oranges but let’s give it a go.

Electricity in Australia is bought and sold on the wholesale market or the National Electricity Market (NEM). The market price changes based on supply and demand in each state – but stay low most of the time. Sometimes electricity is also bought through hedging contracts or direct agreements with generators.

While most retailers charge fixed rates, Flow Power gives you the upper hand with direct access to the wholesale electricity market. Often customers ask us to compare wholesale electricity prices to fixed rate offers they have received from brokers or retailers. Looking into the future, it’s like comparing apples and oranges because buying wholesale let’s you access all the low points of the market. However, we can see what businesses could have saved.

Over the last 5 years, on average customers would have saved 5.6% on their energy cost by buying wholesale. That’s with no change to operations.

Here’s the detail

Below is a graph that compares the average energy costs across the National Electricity Market over the last five years. The fixed rates are sourced from the ASX Energy Futures, which is normally representative of fixed rate contracts. The wholesale prices come from AEMO’s market rates. But remember, these power prices don’t include the retailer’s mark up.

By why does that happen?

Fixed electricity rates are forecasted numbers. Your retailer is predicting what will happen in the market whether they are buying direct from the market, hedging or signing agreements with large power plants. As we all know, forecasts are normally more conservative than reality.

Any questions? We’re here to help.

If you’re interested in learning more about the wholesale energy, our friendly team are always available for a chat.

If you’re an existing Flow Power customer, please do not hesitate to reach out to your account manager.

If you’re not a Flow Power customer contact our friendly team today:

📞 1300 08 06 08 (within business hours)

🖥️ Live chat message (within business hours via the chat button at the bottom of your screen)

Alternatively, you can submit your questions through our website contact form here.