Every energy procurement decision comes down to a question that sounds simple but is not: fix now, or wait? The honest answer is that it depends on the forward curve, the shape of future prices the market is offering today, and on factors specific to your business. Anyone who tells you confidently that prices will rise or fall is guessing. What you can do is understand how the market works, read what the curve is actually saying, and make a reasoned decision rather than a hopeful one.
How the Wholesale Market Works
The wholesale price is the cost of the energy itself, before the network charges, levies, and taxes that make up most of your bill. It is set by supply and demand and moves with several forces, which is why a robust energy management strategy is essential to insulate your business from volatility.
- Gas prices: Gas still sets the UK electricity price much of the time, so the two markets move together. Gas is global, influenced by weather, storage, supply disruptions, and geopolitics.
- Weather and season: Cold snaps and low wind raise demand and prices; mild, windy periods lower them. Winter prices typically sit above summer.
- Renewable output: High wind and solar push wholesale prices down; still, cloudy periods push them up.
- Geopolitics and supply: Events affecting gas supply can move the market sharply and unpredictably.
Understanding the Forward Curve
You do not buy energy at today’s price for a multi-year contract. Suppliers buy forward, locking in prices for future seasons, summers, and winters stretching years out. The set of those future prices is the forward curve. When a supplier quotes you a fixed rate, they blend the forward prices for the periods your contract covers, add the non-commodity costs and a risk premium, and give you a single number.
Why the Curve, Not Today’s Price, Decides Your Fix
This is the point most people miss. A fixed rate reflects the forward curve on the day you agree it, not the spot price you see in the news. The curve for future winters can sit well above today’s price, or below it. So a fix can look expensive against today’s spot and still be sensible, or look cheap and lock in a premium. Utilising intelligent energy monitoring can help you contextualise your usage against these market shifts.
Nobody can reliably predict energy prices, and anyone who claims to is selling.Omnium Energy Consultancy
Fix Now or Wait: What It Actually Hinges On
The decision is a trade-off between certainty and opportunity, and it depends on three things, none of which is a prediction:
- The shape of the curve: If forward prices for your contract period are low and stable, fixing locks that value. If the curve is steep (future periods priced well above today, a “contango” market), a long fix locks in that premium, and a shorter fix or waiting may be better.
- Your appetite for certainty: A business that needs budget certainty values a fixed rate even if it might, in hindsight, have done better waiting. One that can absorb volatility has more room to time the market.
- Your contract timing: When your current deal ends constrains your options; planning ahead gives you the freedom to fix when the curve is favourable rather than when you are forced.
How Omnium Helps You Decide
What a good adviser does is read the current forward curve, set it against your need for certainty and your contract timing, and recommend the option that is most defensible on the evidence, while being clear about the trade-off. We read the live forward curve for your contract period, weigh your needs, recommend the most defensible strategy, and time it effectively.
We never claim to predict prices; we help you make a reasoned call on current evidence. Whether you are looking to secure a better rate to drive energy reduction in your overheads, maintain strict energy compliance, or consolidate your commercial water services alongside your power contracts, we plan renewals ahead so you fix when the curve suits rather than when a lapsing contract forces your hand.
