Business energy procurement at a glance
- What it is: the way your business buys gas and electricity, from research to renewal.
- When to start: 6 to 12 months before your contract end date.
- Main contract choice: fixed price for certainty, or flexible buying for larger users.
- Who can do it: you, your supplier directly, a broker or a procurement consultant.
- Why it matters: there is no price cap on business energy, so timing and comparison set what you pay.
- Do not forget: energy management, because the cheapest kWh is the one you do not use.
What is business energy procurement?
Procurement means buying. For energy, it covers everything from understanding how much you use, to picking the moment to fix a price, to choosing a supplier and contract, to checking your bills until the next renewal. Large companies have teams for this. Small businesses can get the same benefits with a little planning and a good broker.
Unlike household energy, business energy has no Ofgem price cap. Every contract is priced for your business when you sign, so how and when you buy has a direct effect on your bills for years.
How does the energy procurement process work?
- Review your usage. Use 12 months of bills to find your annual kWh and when you use the most.
- Check your contract. Note your end date, any notice terms and your current unit rate and standing charge.
- Decide your approach. Choose between a fixed or flexible contract, and how long you want to fix for.
- Go to market. Ask a broker or several suppliers for quotes based on the same usage figures.
- Compare like for like. Look at the unit rate, standing charge, contract length, green options and broker fee together.
- Sign and switch. Make sure the new contract starts the day after the old one ends.
- Manage the contract. Submit meter readings, check bills and set a reminder for your next renewal.
Fixed or flexible energy procurement?
| Fixed price | Flexible purchasing | |
|---|---|---|
| How it works | Unit rate locked for the contract term | Energy bought in blocks over time at market prices |
| Bill certainty | High | Lower, costs follow the market |
| Effort | Low, set and forget | High, needs regular decisions |
| Risk | Locked in if prices fall | Exposed if prices rise |
| Best for | Micro and small businesses | Large users with high, steady demand |
There are also pass through contracts, where some non energy costs such as network charges are passed on at cost rather than built into a fixed price. They can suit larger users but make bills harder to predict.
Supplier, broker or procurement consultant?
| Route | What you get | Watch out for |
|---|---|---|
| Direct with a supplier | One quote, simple switch | No comparison with the rest of the market |
| Energy broker | Quotes from several suppliers, help with paperwork and renewals | Check the broker fee shown in your contract |
| Procurement consultant | Strategy, flexible buying and bill checking for larger portfolios | Usually a fee, aimed at bigger energy users |
For most small businesses, a broker is the sensible middle ground. Read what a business energy broker does before you choose one. Ofgem rules mean broker fees must be shown in your contract terms for contracts signed since 1 October 2024, and suppliers can only work with brokers who belong to a redress scheme when selling to small businesses.
What is business energy management?
Procurement controls the price you pay. Energy management controls how much you use. The two work best together.
- Read your meters every month, or ask for a smart meter so readings are sent automatically.
- Check every bill for estimated reads, the right VAT rate and the right unit rate.
- Find your peaks. Know which equipment runs when, and switch off what is not needed.
- Upgrade the worst offenders such as old fridges, heaters and lighting.
- Track usage over time so you can spot leaks, faults and wasted energy quickly.
Check you are not overpaying tax as well. Very low users should pay 5% VAT rather than 20%, and most businesses pay the Climate Change Levy, which is £0.00801 per kWh for both electricity and gas from 1 April 2026. Our guide to VAT on business energy has the details.
Common procurement mistakes to avoid
- Leaving it late. A rushed renewal means taking whatever is offered.
- Letting the contract lapse. Out of contract business energy rates are usually far higher than fixed deals.
- Comparing unit rates only. A low unit rate with a high standing charge can cost more overall.
- Guessing your usage. Quotes based on estimates can lead to surprises on the first bill.
- Ignoring the small print. There is no cooling off period on business energy contracts, so check before you agree.
Start your business energy procurement
Whether you run one small shop or several sites, the starting point is the same: your contract end date. See how small business energy deals work, check typical business electricity rates, and read our guide to business energy renewals. Then tell us when your contract ends using the form above and a trusted UK broker will compare suppliers for you, free and with no obligation.