Fixed, flexible or pass-through? Choosing a half-hourly electricity contract
Fixed, pass-through and flexible contracts handle price risk in different ways. Compare how each treats energy and non-commodity costs, who each one suits and what to check before you sign.
Half-hourly sites usually have more contract choices than smaller businesses. As well as a standard fixed price, you can choose how network and policy costs are handled, and larger users can buy energy in stages rather than all at once. The right option depends on how much price certainty you need, how much risk you can carry and how much time you can give to managing it.
Key points
- Every half-hourly price has two parts: the energy (commodity) and the non-commodity charges.
- Fully fixed contracts fix both parts. Pass-through contracts usually fix the energy and pass non-commodity costs through at cost.
- Flexible procurement buys energy in tranches over time and suits larger users with the resources to manage it.
- Whatever you choose, renew on time: out-of-contract and deemed rates are usually much higher.
The two parts of every price
The commodity part is the wholesale electricity your supplier buys for you. The non-commodity part covers DUoS and TNUoS network charges, BSUoS balancing costs, policy costs such as Contracts for Difference, the Renewables Obligation, the Feed-in Tariff and the Capacity Market, metering and data charges and Climate Change Levy. VAT is added on top.
Contract types differ mainly in which of these parts are fixed, which are passed through at cost and who carries the risk if they change. If you are unsure what each line on your bill means, our guide to reading a half-hourly bill explains them.
Fixed contracts
On a fully fixed, or all-inclusive, contract the supplier fixes both the energy and the non-commodity charges for the contract term. You get the most predictable bills, which helps with budgeting and cash flow. In return, the supplier takes on the risk that costs rise, and that risk is reflected in the rates it offers.
Read the terms carefully. Some fixed contracts still allow certain third-party charges to be passed through if they change. Watch the label, too: some quotes described as "fixed" fix only the energy price, with the non-commodity charges passed through. That is the pass-through structure described below.
Pass-through contracts
On a pass-through contract the energy price is usually fixed for the term, but non-commodity charges are passed through at the rates actually charged and shown on the bill line by line. You see exactly what you are paying for, and changes you make, such as moving load out of the DUoS red band or reducing your Agreed Supply Capacity, show up directly on your bill.
The trade-off is less budget certainty. When network or policy rates change, your bill changes too. Pass-through suits businesses with good half-hourly data, someone who checks the bills each month and a finance team that is comfortable with some variation.
Flexible procurement
With flexible, or basket, procurement you do not fix the whole energy price on one day. Instead, energy is bought in tranches over time, against the wholesale market, within an agreed strategy. Some arrangements pool the demand of several buyers.
The aim is to avoid locking in everything at a single point and to spread market risk. It needs a clear risk policy, rules on when to buy and regular monitoring. It is typical for large users and multi-site portfolios with significant consumption, and it is rarely the right fit for a single small site.
Side-by-side comparison
| Contract type | Price certainty | Non-commodity costs | Best suited to | Watch out for |
|---|---|---|---|---|
| Fully fixed | Highest | Fixed by the supplier, subject to the contract terms | Businesses that need a firm budget | Clauses that let some third-party charges change; risk priced into the rates |
| Pass-through | Energy fixed; other charges vary | Passed through at cost | Sites that can shift load and check bills regularly | Bills moving when network or policy rates change |
| Flexible (basket) | Depends on the buying strategy | Usually passed through | Large users and multi-site portfolios | Needs a risk policy, a buying plan and regular monitoring |
How to choose: questions to ask
- How important is a fixed budget for the whole contract term?
- Can you move load out of expensive periods, or reduce your peaks?
- Do you have reliable half-hourly data for every site?
- Who will check the bills, and who would watch the market on a flexible contract?
- How long a contract do you want, and what are the exit terms?
- Does the contract include volume tolerance clauses that charge you if usage moves outside an agreed range?
- Can any charges described as fixed actually change during the term?
- Is the broker fee shown clearly in the principal terms?
We compare half-hourly electricity contracts from a range of UK suppliers on a like-for-like basis, so you can see the trade-offs side by side.
Broker fees and transparency
Since 1 October 2024, Ofgem has required suppliers to show any broker fee clearly in the contract's principal terms for all non-domestic customers, and to provide it on request. Since December 2024, suppliers may only use brokers that belong to a qualifying redress scheme, such as the Energy Ombudsman, for small business contracts. You can read Ofgem's announcement on business protections and our guide to broker fees and the Ofgem rules.
Renew on time
Whatever you choose, do not let the contract lapse. Out-of-contract and deemed rates are usually much higher than contract rates. Most suppliers let you agree a new contract months before the current one ends, so start reviewing well ahead of the end date. Our contract renewal service keeps track of the dates for you.
Get help choosing a contract
If you are weighing up fixed, pass-through or flexible options, we can compare them against your half-hourly data and explain the trade-offs in plain English. We'll show you whether you can pay less, and if we can't find a better option, we'll tell you.
Ask for a free quote or call 07565 147 170.
Frequently asked questions
What is a pass-through electricity contract?
A pass-through contract usually fixes the energy price but passes non-commodity charges, such as DUoS, TNUoS, BSUoS and policy costs, through at the rates actually charged. You see each cost on your bill and benefit directly from changes like moving load out of the red band, but your bill varies when those rates change.
Is a fixed contract always the safest choice?
A fully fixed contract gives the most predictable bills, but the supplier prices in the risk it is taking on, and some fixed contracts still allow certain third-party charges to change. It suits businesses that value budget certainty most. Read the terms to see exactly which charges are fixed for the whole term.
Who is flexible energy procurement for?
Flexible, or basket, procurement is typically used by large energy users and multi-site organisations. Energy is bought in tranches over time rather than all at once, which spreads market risk but needs a clear buying strategy, a risk policy and regular monitoring. It is rarely a good fit for a single small site.
