WhichBusinessEnergy

Business Energy Procurement Explained (2025)

Business energy procurement is more than simply choosing the “cheapest” supplier. It involves understanding how suppliers price contracts, assessing risk, selecting an appropriate contract length and using brokers or direct supplier relationships to secure a fair deal. This guide breaks the process down clearly.

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Use this guide alongside our Switching Guide, Hidden Commission Guide, and broker comparison.

1. What business energy procurement actually means

Procurement is the process of selecting and agreeing a commercial gas or electricity contract. It typically includes:

  • Understanding your meter type (MPAN/MPRN)
  • Reviewing your usage and load profile
  • Comparing supplier contract offers
  • Selecting contract length (1–5 years)
  • Assessing risk and market timing
  • Negotiating terms through a supplier or broker

The decisions made during procurement can affect your costs for years.

2. How suppliers calculate business energy prices

Business energy prices are influenced by a combination of:

  • Wholesale gas & electricity market levels
  • Network and non-commodity costs
  • Your meter type (HH, smart, AMR)
  • Your usage pattern (baseload vs. peak-heavy)
  • Credit rating and payment terms
  • Contract length and timing

This is why quotes can vary significantly between suppliers, even for the same business.

3. Fixed vs flexible procurement strategies

Fixed contracts:

  • Price certainty for 1–5 years
  • Easier budgeting and stability
  • Most common for SMEs and offices

Flexible or “flex” procurement:

  • Used by large energy users
  • Purchasing occurs in tranches over time
  • Requires ongoing monitoring
  • Can reduce exposure to market spikes

Most SMEs choose fixed, while manufacturers or logistics firms may explore flexible strategies.

4. Why contract length matters in procurement

Contract length affects:

  • How long your prices stay fixed
  • Your exposure to market movements
  • Your renewal and switching timeline

For a full breakdown, see our Contract Length Guide.

5. The role of brokers in energy procurement

Brokers handle the “heavy lifting” of procurement by:

  • Requesting multiple supplier offers at once
  • Comparing contract options
  • Explaining terms clearly
  • Handling paperwork and switching
  • Managing multi-site portfolios
  • Resolving billing issues after the switch

The key is choosing a transparent broker that explains how commission works.

See our independent broker comparison to shortlist firms.

6. Commission and pricing transparency

Most brokers are paid via an uplift added to your unit rates or standing charge. This is common practice, but should always be disclosed.

To avoid problems, read our Hidden Commission Guide.

7. Timing your procurement

Market timing matters. Many businesses begin procurement:

  • 3–6 months before their contract ends
  • Earlier if they expect market volatility
  • Immediately if already in out-of-contract rates

A good broker will show you contract validity periods and avoid pressure tactics.

8. Procurement for multi-site businesses

Multi-site organisations can benefit from:

  • Portfolio contracts
  • Aligned renewal dates
  • Centralised billing
  • Better negotiation leverage

Many brokers specialise in managing portfolios for retail groups, logistics companies and SMEs.