Every business owner knows that the end of the calendar year brings a flurry of tasks and deadlines. Among the most critical for energy-conscious companies is the renewal of commercial energy contracts.
If your contract is set to expire, it's crucial to understand why now is the time to act. Waiting too long could lead to unfavourable rates or limited choices, much like missing the window to refinance a mortgage.
In this guide, we'll walk you through everything you need to know about managing expiring commercial energy contracts, so you can secure competitive rates and avoid being caught off guard at the end of the year.
The year-end rush for energy contracts
Why November and December are key
The end of the year isn't just festive; it's a peak period for commercial energy contracts. As Andrew Borwick, Zembl Commercial Energy Team Lead explains, "Approximately 50% of our customers have commercial energy contracts that expire in December this year, making it a critical period for businesses. With so many contracts coming up for renewal at the same time, there's a surge in demand as companies scramble to secure new terms."
He goes on to say, "This rush can limit the number of offers available. Acting early gives you an edge over the competition and helps mitigate the impact of heightened supply and demand."
“Acting early gives you an edge over the competition and helps mitigate the impact of heightened supply and demand.”
Andrew Borwick, Zembl Commercial Energy Team Lead
The consequences of inaction
Doing nothing isn't an option when it comes to expiring energy contracts. Allowing your contract to lapse means risking an automatic rollover onto default market rates. These rates can be more than double what you previously paid, depending on market trends.
By failing to act, businesses may face significantly higher energy costs that could have been avoided with timely intervention.
Understanding market dynamics
The surge in demand during the end-of-year period gives energy retailers more power to be selective about the clients they offer contracts to. This dynamic not only affects pricing but also the availability of desirable contract terms.
By locking in a deal early, businesses can take advantage of competitive rates and favourable conditions before the market becomes saturated with last-minute seekers.
Navigating December cut-off dates
When to act for renewals
Timing is everything when renewing your commercial energy contract. Most retailers limit new offers after the second week of December because they cannot guarantee a transfer date by January 1st. The ideal window to act is from early November to early December. The sooner you start the process, the better positioned you'll be to secure a favourable contract.
Strategies for early engagement
Engaging early isn't just about beating the rush; it's about positioning your business advantageously. Start conversations with your current provider or a consultant like Zembl as soon as possible. Early engagement allows you to explore options without the pressure of contract end dates, ensuring you make a decision that's strategically sound and financially advantageous.
Preparing for renewal discussions
Preparation is key to a successful energy contract renewal. Gather all relevant data, including your current usage, previous rates, and any changes in your energy needs. This information will empower you to have meaningful discussions with providers and help them tailor offers that best suit your business's specific requirements.
Exploring contract options with Zembl
Initiating the procurement process
Zembl offers an obligation-free tender process for all businesses approaching contract expiration. The first step involves signing a Letter of Authority (LOA), giving Zembl permission to seek competitive offers on your behalf. This authorisation allows them to gather essential data from your current retailer, including usage and historical rates, and factor in additional considerations like solar usage or lease restrictions.
Gathering data and tailoring offers
Once Zembl has the necessary data, they can tailor offers to meet your specific needs. This customisation can make a significant difference in the terms and pricing you receive. By understanding your business's unique circumstances, Zembl ensures that the contracts presented align with both your current and future energy requirements.
Speeding up the process
Time is of the essence when dealing with expiring contracts. Zembl typically requires about four business days to turn around responses once all details are gathered. In some cases, this timeframe can be shortened if necessary. This means if you get in touch with Zembl early, you won't be left without a contract as the calendar turns.
Why talk to Zembl now
By acting early and getting in touch with Zembl's Commercial Energy Consultants, you can secure favourable terms and avoid costly default rates.
In addition to this, when you secure your next energy contract with their help, you'll get so much more than energy procurement with dedicated and expert service for your full contract duration. This includes AI-powered energy intelligence, delivering the insights to help unlock energy efficiency opportunities, and the service to turn those insights into action which could make a significant impact on your business’s bottom line.
Our team is ready and waiting to hear from you. Don't leave it to the last minute, reach out to us today.
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