short or long term contracts

Short-term versus long-term energy contract, what’s best for me?

It doesn’t matter how knowledgeable you are on the energy sector, choosing an energy contract that best fits your business model is always going to be a difficult decision.

We’ve spoken previously about the kind of deals available, but once you’ve decided what type of contract is right for you, the next big question is: How long do I sign it for?

For anyone that’s read one of our posts before, you’ll know the right thing to do regarding business energy is different for every business.

The energy market has always been temperamental, and the complications Brexit has thrown into the mix has only further convoluted matters. The instability brought on by the current political climate has only worked to create more confusion amongst businesses about what deal is best for their long-term objectives.

To help provide some insight into what’s best for you, in the following piece, we’ll address some of the most common queries we receive from businesses and provide you with a clear vision of where you need to go moving forward:

The fixed price always seems higher for my long-term energy contract, so how can they work out more cost-effective?

Understanding why long-term contracts often work out cheaper requires you to look at the bigger picture. A longer-term fixed rate contract should always be looked at as a “price guarantee”.

Typically, the cost in your first year will always be cheaper (if you aren’t using a consultant) on a short-term contract compared to a 3- or 5-year deal as suppliers will always build risk into a long-term energy contract. But over the course of time, you become further susceptible to the changing environment.

The following example is a great visual representation of such a deal.  In the below table, we’ve compared a five-year fixed rate electricity contract we negotiated in 2014 (for an SME client of ours) with the UK’s average electricity price for each of the five years.

Energy Contract

Source: UK Government Department for Business, Energy and Industrial Strategy statistics.

Between 2014 and 2018, the price of electricity had risen by 12% (2016 to 2018 was a particularly volatile period which saw prices jump by 21%), however, due to the nature of our client’s contract they were protected throughout from any increases in price.

Would a short-term energy contract be better if there’s a chance I might move premises?

This really depends on a combination of your cancellation fee and energy usage. If you’re a small consumer of energy and you have a high cancellation fee, then it would be advisable to seek out a short-term energy contract. If you plan on moving on in the next twelve months, then it probably wouldn’t be advisable to sign a five-year deal.

However, it’s worth considering that any energy supplier worth its salt is likely to want to keep your business when you move premises, especially if you’re moving to a larger building. Quite often, with a bit of negotiating (normally via a consultant), a cancellation fee can be waived, and competitive rates acquired for your new location.

8 things you need to know before switching business energy

How can I best protect my business from a post-Brexit price hike?

It’s a volatile and unpredictable market, not helped by political events on the horizon such as Brexit. Experts like GAS are frequently asked where the market is going post-Brexit and, truth be told, nobody in the industry really knows.

One thing we do know is that as it stands, the UK imports around 40% of all the energy it uses, and currently has gas pipelines (or gas interconnectors) with three EU states: Ireland, the Netherlands and Belgium. With the future likelihood of tariff increases (especially in the case of no-deal) Energy UK, the trade association for the British energy industry, and a House of Lords committee, have both predicted price increases.

So, what’s your best option? If you’re concerned about rising prices then remember what we highlighted earlier, a long-term energy contract should be looked at like a “price guarantee”. The average cost of energy can go up as much as it wants, but if you have a long-term fixed rate contract, your price will remain the same.

This can provide a greater ability to forecast expenditure and give you some control and certainty post-Brexit…at least with regards to energy expenditure.

Can GAS help us?

Certainly.

We’re experts in negotiating and acquiring the best deal for you. We understand how daunting the prospect of dealing with large energy suppliers can be and that’s why we’re here, to do the hard work for you.

We’ll analyse your current business setup and contracts and present you with the most competitive (and bespoke) rates on the market, as well as chatting through why a particular deal would be the best fit.

To find out more, call us today on 0800 130 3514 or complete our contact form and we’ll be in touch.

 

Sign up to our NewsletterStay up to date with the latest industry news and offers.

Share this post

Share on facebook
Share on google
Share on twitter
Share on linkedin
Share on pinterest
Share on print
Share on email

SWITCHING BUSINESS ENERGY?

Start Saving

Pick a date and time that's best for you
Alan GarrattTraining & Development

Alan joined GAS in July 2016 having spent 11 years as a business owner, followed by 12 years at the mobile communications company EE. With a successful background in business sales, he moved into the world of Training & Development and specialised as a Management Development Consultant. Alan is tasked with creating a strong learning and development offering, where all employees receive the right level of support, training and development. His role incorporates needs analysis, training design and delivery.

Alan Says…

The pull of creating an L&D function at a young and vibrant company was too hard to resist. The board of Directors and senior management team are extremely pro-active where learning is concerned and push to get the best support for our people. My role is so diverse – one day I can be mentoring our young apprentices and the next I can be writing a management development session.

Did you know?

Alan goes camping regularly in the Highlands of Scotland and owns land on the West Coast. He has the official title of ‘Laird of Dunans’… his daughter bought him one square foot of land as a gift!

Bradley GrovesCEO & CHAIRMAN

Having co-founded GAS in 2012, Bradley has helped oversee the companies’ huge growth in a short space of time. Starting from its modest surroundings in South Shields, the rapid growth has seen the business move to its current surroundings in Seaham. Bradley’s background is in retail management and he has a wealth of experience working for a number of FTSE250 companies in a board level capacity, most notably with the Caudwell Group.

Bradley says:

"Certain businesses we’ve worked with have made six-figure savings over their contract terms, we cover a very large area when it comes to variable costs, and when we get involved, it means the companies can focus on their business while somebody else is focusing on what they specialise in."

Did you know?

Bradley is the proud Owner and Chairman of Spennymoor Town Football Club, who have achieved 4 promotions and Eleven trophies since his takeover in 2009. As a youngster, he was also on the books of Aston Villa Football Club until an unfortunate injury took him down another career path which has culminated in the empire he has built today.​​

Chantelle WallerTeam Manager (IT)

Chantelle is a Graduate of Teesside University, where she studied towards achieving a BSc Hons degree in Information Technology.

Her IT career blossomed upon joining local firm Teesside Steel Works in 2011, where she progressed from the IT Helpdesk to become a Desktop Support Analyst. Following a four-year spell with organisation, Chantelle moved to Great Annual Savings in 2015, where she currently heads up the IT department and is responsible for managing the business’s technology systems.

Chantelle says:

“I’m extremely grateful for the opportunity I have been given at GAS. There are real progression opportunities here and I have developed my career from Desktop Support to IT manager in the space of just two years. GAS make me feel valued and recognised.”

Did you know:

Chantelle is a qualified British Sign Language interpreter with a NVQ level 3 in British Sign Language.

Craig ShieldsHead of Quality & Risk

Craig spent the first 10 years of his career working in Education, firstly as a lecturer, then latterly as a Head of Sport, Leisure, Travel & Public Services at East Durham FE College. Having moved into the private sector in 2012 running a local franchise of Loughborough based business telecommunications company Crimzon Communications, Craig first became involved with Great Annual Savings by providing the telecommunications​ arm of the value added services of the business. In 2014, he turned that business rapport and relationship into a full time role within the company as our Head of Compliance.

Craig says:

"Being part of GAS is a journey, you genuinely feel part of the organisation and that your contribution makes a difference. The growth I’ve witnessed since I’ve been involved with GAS is phenomenal, to see us move from small serviced offices to where we are now has been a pleasure to be a part of. It’s exciting to think that we aren’t finished yet, with plenty more growth to come.”

Did you know?

Craig once appeared on the stage version of Catchphrase in Blackpool with the one and only Roy Walker.​​

Judith BennisonGroup HR Director

Judith was part of the team who initially set up Great Annual Savings in 2012, she brings with her an abundance of senior management experience, managing the HR/Resourcing functions in numerous fast growing FTSE250 companies including De La Rue International PLC, Blacks Leisure Group PLC and most recently G4S PLC. Judith has played a pivotal role in helping move the business forward with our ambitious growth plans and her impact has seen our head count grow significantly year on year with significant plans in place to manage and lead the continued growth going forward.

Judith says:

"Businesses who are pro-active continually look at managing their costs effectively, those who wait until a recession hits, are reactive and often too late. We want companies to be pro-active and take the pain away by saving costs now, letting GAS do the fully managed cost solution just makes good business sense for any company, whatever the size or industry. Our business ethos is something I truly believe in and want every company to benefit from our help and support, working collaboratively together is a great way to build long term relationships.”

Did you know?

Outside of work, Judith likes to turn her passion to Yoga incorporating head stands, hand stands, tree pose, back bends and still being able to twist & turn along with her fellow yogis. She is on the journey to lotus pose but 5 years on is not quite there… yet!​​

Lauren RedmanHR Manager

From Sunderland to Chicago and back again, Lauren has made significant strides in her career since graduating from Sunderland University with a 2:1 degree in Business & Human Resource Management back in 2011.

Lauren says:

“Attending University was a great learning curve for me and gave me a great insight into what I could achieve in my career. I was also afforded the opportunity to gain some fantastic work experience with Gateshead Council and Trade Training Associates, harnessing my skills in the end to end recruitment process and other generalist HR projects.”

After graduation, she took on a one-year internship in Hospitality Management in Chicago with Marriot. Upon her return to the UK in late 2012, her journey with Great Annual Savings began.​

Liam GrovesTeam Manager (Compliance)

An Alumni of Leeds Beckett University, Liam graduated with a 2:1 degree in Business Studies and has been part of the furniture from day one, starting his career at Great Annual Savings on a 12-month undergraduate placement working as a Business Solutions Manager. Having completed his degree, he took on a role as part of the Sales Administration Team.

Liam says:

“Being part of the companies’ inception and ongoing development has been a challenging yet rewarding experience which has helped me gain invaluable skills and knowledge of working in a fast growing private sector business.”

Since attending Argyle House School and Durham School 6th Form, Liam has always displayed a passion for business from an early age. You could even say it’s in his genes.

Over the years, Liam has worked his way up through the company and is now part of the Customer Compliance team working as a Compliance Manager, picking up a number of qualifications along the way including an NVQ in Customer Service.​

Mark JonesAssociate Business Solutions Director (UK & I)

Mark joined Great Annual Savings shortly after the company began trading in 2012 as a Business Solutions Manager, after initially beginning his career working in the Finance sector with Barclays, RBS and HBOS Group. His skills and high work ethic were quickly recognised as he was first promoted to a Team Manager, and then later to the Head of Sales, UK & Ireland. As one of the longest serving members of staff, he has now built a strong team of Energy experts designed to take the pain away from our customers when it comes to their utility bills and give them peace of mind and the time to do what they do best; run their business.

Mark says:

"The speed of my progression and development has been amazing. The guidance and ongoing support the Group has provided me to aid my development has been invaluable. It’s great to be able to assist businesses to reduce their costs and their customer satisfaction gives me personal satisfaction in my role.”

Did you know?

Mark is a lifelong Sunderland AFC supporter, attending every game home and away throughout the season with his young son Josh.​​

Matthew HerrellAssociate Director

A chartered accountant for over six years, Matt joined Great Annual Savings in 2015 after playing a key role in the growth of UK IT firm Onyx Group. As Associate Finance Director, Matt is responsible for planning, implementing, managing and controlling all financial-related activities for GAS, including the development of financial and operational strategies.

Phil AndrewAssociate Customer Experience Director

Phil joined GAS in May 2016, having worked in a number of blue chip organisations over the past 25 years including The AA, Tesco Bank, Aviva and Barclaycard. With the company committed to providing a first class customer journey and experience, as well as colleague engagement, Phil’s knowledge and experience as Head of Complaints at Barclaycard and Customer Experience at the AA is key to GAS delivering a first class experience to each of our customers’ every time.

Phil says:

"I am really excited to be a part of a local company which is looking to grow by putting the customer first. I was attracted by the positive culture that has been created and the opportunity of working for an organisation that is always looking to invest and develop its workforce and support the local community.”

Did you know?

In 2005, Phil was accredited a Six Sigma Black Belt whilst working for Zurich Financial Services. A winner of a number of industry awards, he also wrote and delivered the hugely successful Barclaycard “Obsessed” Program, which was designed to put the customer at the centre of the organisations thinking.​​

Philip BallNon-Executive Director

For over 30 years Phil enjoyed a career working for Local Authorities in Lancashire, City of Newcastle, Derbyshire and County Durham specialising in sport, leisure and cultural services before leaving his Director’s role at Sedgefield Borough Council in 2009 to start a leisure consultancy company. Having been commissioned to work on football and community related projects for Spennymoor Town FC in 2010, he developed a close working relationship with Club Chairman Bradley Groves.

Phil says:

"Outside of working on football club activity, discussions with Bradley began to explore how we were aware that many of the companies we had both worked with needed specialist cost reduction services which led to the creation of the Great Annual Savings Company in 2012 and began a journey of rapid expansion for us and huge financial benefits for our customers.”

Did you know?

Phil is a keen sportsman, his current playing passions are golf and sailing although when he was at school in Rotherham, he was proud to represent Yorkshire Schoolboys at Cricket and still holds his school’s wicket keeping record of taking 47 stumpings and 4 catches in a single season.​​

Ricky MingleCSR Ambassador

Ricky joined Great Annual Savings in May 2016, having spent eight years working in a Marketing and Data Management capacity in the events sector. To run alongside his core function of Email Marketing and Internal Communications Manager within GAS, Ricky was elected as Chairman of CSR in February 2017. He has been tasked with making a significant difference to the area of County Durham by raising money and spending time volunteering to help those in need. Putting his 10 years fundraising experience into practice, Ricky and the team did their due diligence and decided to support Animal Krackers, Heel and Toe Children’s Charity, Durham Foodbank and Wag & Co.!

Ricky says:

“When the opportunity arose to be part of the CSR team, I didn’t hesitate to put my name forward. The Group are very passionate about making a huge impact to small charities in our local community and the challenge now is to deliver on that. We have seen a positive response from the whole business to get behind our CSR drive, and with a number of successful events already done and many more planned over the coming months, we are in a prime position to fulfil our mission. It is great that staff have been given the opportunity to physically go out and support our charities as well, allowing for them to get involved and have a connection to our cause.”

Did you know?

As well as being a songwriter, Ricky is a Grade Five violinist.

Robbie ShearerHead of Field Sales

Robbie spent the early years of his working life in the public sector, including a stint in the Northumbria Police Force. After leaving his role at the Learning Skills Council, Robbie turned to a life of sales and hasn’t looked back since.

With a decade’s worth of experience in the utilities sector, Robbie is an expert on helping businesses find the right energy solution. Joining GAS in 2016, Robbie played a key role in establishing our Field Sales Division and spreading GAS’ portfolio throughout the UK.

Robbie says:

“Being at GAS has helped develop my career massively.  Working for a business and part of a senior management team who make you feel valued and make sure your contribution is recognised is really important to me and I feel like I have that in abundance here. “

Interesting fact:

I once successfully picked 5 numbers and the bonus ball on the Lotto and went to Camelot offices to collect my prize and have my picture taken.

SPID Number

Your SPID (Supply Point Identification) is a 13 digit long reference number that can be found on your most recent water bill.

Suppliers will use your unique SPID number to switch your retail services.

Victoria WaltonHead of Resource and Talent

Vic joined the GAS Group in 2016 following an 18 year career in recruitment, cutting her teeth on the Hays Plc Graduate Programme and more recently within the Senior Management Team of a locally based recruitment agency. With a degree in business management, she is tasked with developing an enviable employer brand for the group with a group strategy for attraction and selection from a constant pipeline of talented new applicants, as well as overseeing training, learning and development.

Vic says…

"GAS had already experienced a fantastic period of growth when I joined, and the vision and ambitions for the business, led by a passionate management team was enticing and exciting. With our focus to become an employer of choice in the local market, we used the success of the business and, most importantly the people within it, to create a strong personality and image for GAS, combining reward, progression, challenge and professionalism, washed down with a good dose of fun!  Highlights to date include the success of our recruits, the evolvement of our careers website and being part of the team achieving a national award in recognition for the success of our apprenticeship scheme."

Did you know…

In days gone by, she qualified as an open water scuba diver, and is handy in a quiz team when it comes to any 80’s music!

Top