Energy Select is expertly placed to advise you, and to help you avoid, the potential costs of being on the spot market and can provide financial reporting that explains the risks and the likely outcome.
We recommend, where practicable, a ‘portfolio approach’ to hedging which over the long term minimises volatility, providing the client with a smoothed transition between contracts and removes the cliff edge decision making practice of negotiating all supplies at one point in time, which can lead to rate shock and significant but ultimately avoidable cost increases. This approach takes into account the seasonal fluctuations inherent in the electricity market and also the timing, term and prices of hedge contracts.
Common financial mistakes include:
- Being completely exposed to the floating wholesale price (Spot Price) in order to save money in the long run
- Not understanding how to adjust your hedge cover for volume or price differences where the contract is settled at the point of generation but your consumption is elsewhere in the country
- Not knowing how to evaluate the value of an offered hedge