In a webinar on July 15, our experts discussed flexible alternatives to standard energy deals.
Right now, businesses are facing more uncertainty but there are opportunities in the energy market that can support businesses.
The time you sign can set the prices you get
Energy prices have reached four years lows. If you’re looking at energy contracts, now is the time to make the most of it.
Even if your energy contract isn’t up for renewal, acting now may mean you can lock in a better price than you would in the coming years.
Prices in the energy market can fall or rise after you sign a deal. It’s not often that energy retailers will let you move down with the market if prices fall but there are solutions that can. Look for plans with tools like the Active Option, which can move you down to a lower rate if the market falls.
If the future of your operations are uncertain or likely to change, there are options to help. You can look for:
- Flexible contracts with no fees or penalty for changes for the volume of energy you use
- Plans that let you know how and when to use power to make the market work for you
- Contracts that put you in control of your energy use and the term of the contract. For example, three month rolling wholesale contracts, or 6-12 month contracts
Let’s see how this works in practice
Last year, a NSW-based manufacturer went to market for a new energy plan. Prices were high but the business knew there was every chance rates could fall in the future.
So they chose Power Active with the added Active Option. This would give them greater flexibility if prices fell.
And they did. By April, energy prices had fallen to four year lows. Unlike other energy plans, the Active Option let the business move to a lower rate, resulting in a total saving of 21% on their base energy rates, where the Active Option was applied.
Seeing the savings and low prices for coming years, the business chose to recontract early to make the most of the market lows.
Question and answers
My business is currently closed due to COVID-19 lockdown restrictions in Melbourne, but I still received an energy bill. Can you tell me why that is?
On your electricity bill, only 40-50% of your end cost is set by the energy you use. The remainder comprises network charges paid to the distributor by your retailer for environmental and metering charges.
You could ask your retailer if there’s a better tariff for your site. If you are using significantly less electricity than you were last year, there might be an opportunity to reduce that network component.
Why is it a great time to sign a contract at the moment?
The current long-term price trends are some of the lowest we’ve seen in the past four to five years and present a good opportunity to sign a contract.
If you sign Power Active now, with the Active Option included, you get the advantage of the prices you see in the market, with the option to move down with the market if prices fall.
I’m in contract until the end of the year, what are my options for signing?
If you’re coming out of contract in December, now is a good time to start looking at something like Power Active, where you get more flexibility.
There are other challenges at the moment in terms of forecasting future energy consumption for your business. This may pose a good opportunity to look at wholesale. If you can, start looking at something soon because prices won’t stay low forever.
Do these contracts let me do demand management or demand response when summer comes around?
Our energy contracts reward customers for doing demand response or demand management.
By moving operations outside of peak price periods, your business could unlock greater savings which aren’t possible through a traditional fixed-rate contract.
Our customers often say it’s too difficult to move their operations, but it can be as simple as delaying and charging your forklifts from 4PM to 7PM instead.
Our engineering team works with customers to lower their energy costs without making big changes to their operations.
In case you missed it, check out the video below.