How can companies purchase electricity correctly?

07/02/2025

Although there is no single best strategy for purchasing electricity, it is very important for businesses to purchase energy correctly. Given that Latvia has an open electricity market, businesses are free to choose their preferred supplier, much like choosing a mobile phone operator. Electricity reaches the consumer in the same way, regardless of the supplier. To ensure that everything is fair and secure, the market is supervised by the Public Utilities Commission (SPRK).

Fixed or variable price?

When looking for the answer to the question of whether to choose a fixed or variable price, various aspects must be taken into account. A fixed price is suitable if the business wants stability and predictable payments. This means that the price remains unchanged throughout the contract period, regardless of what happens on the exchange. A variable price, on the other hand, offers flexibility – by following the market and consumption, it is possible to make significant savings, especially if the company is prepared to use more electricity during cheaper hours. This is a more flexible approach, but requires more active involvement. A fixed price can give consumers a greater sense of security. However, those who are willing to take the risk of potential savings may consider a variable price. Enefit also offers the option of choosing a product that combines both and allows you to spread the risk.

Various factors must be taken into account when purchasing electricity

There is no single best strategy for purchasing electricity, as it depends on many factors, including consumption habits, risk appetite and the market situation. However, a mixed approach may be a good solution – fixing a portion of the base consumption and purchasing the remainder at the exchange price. This allows you to take advantage of price drops in the market and reduce the weighted average price of electricity. Ideally, this approach can be reinforced with technical solutions such as batteries and smart management systems that help adjust consumption to price fluctuations and increase overall benefits. It should be remembered that when comparing electricity offers, it is important to evaluate not only the price but also the overall terms of the contract. First, it is important to compare the contract term, as the price offered may vary significantly depending on this. Even a difference of a few months can significantly change prices; for example, prices will be lowest in the spring and summer months, but if the customer has requested a price for 12 months from January to the end of December, and someone else gives an alternative offer not until the end of December, but until the following spring, these are incomparable units and can significantly change the price. Secondly, it is necessary to assess the quality of the company's customer service and reputation, including how well the trader keeps its word and complies with the terms of the contract. It is also worth investigating whether any smart solutions are offered, such as batteries and solar panels, or options for optimising consumption. Price is undoubtedly important, but the overall package determines the final benefit.

When purchasing, it is important to evaluate not only the price, but also the reliability of the trader

If a company needs to conduct a procurement procedure or an official tender for the purchase of electricity, it is important to do so in good time. It is often the case that procurement is carried out at the last minute, when the existing contract is about to expire. This means that even if you receive offers from several suppliers, you will not have time to wait or listen to experts who say that, for example, the price may be better in a couple of months. You will have to take what is available at that particular moment. One of the most common mistakes in electricity procurement is choosing the lowest price without comparing the terms and conditions. Similarly, consumption trends may not be assessed and the reliability of the trader may not be checked, as there are many examples where we have encountered a situation where a contract is concluded with a trader who has offered a good price, but after some time, for example, when the energy crisis began, these traders ceased their activities and the conclusion of a new contract resulted in losses. If the company does not represent the public sector, a price survey is sufficient — requesting several offers from different traders and evaluating the most advantageous option. This approach is simpler, more flexible and at the same time ensures a transparent and clear choice.

The sustainability factor must also be taken into account

When purchasing electricity, the increasingly important sustainability factor must also be taken into account — green energy reduces the impact on the environment, improves the company's reputation by responding to growing sustainability requirements, and at the same time demonstrates social responsibility to customers, partners and investors. This is also particularly important when a company wishes to apply for state or EU financial support or obtain a sustainability certificate for its production. Green energy also promotes long-term energy independence, as renewable resources such as sun, wind and water reduce dependence on fossil fuels and the geopolitical risks associated with them.

New contracts can be concluded for different periods

It used to be believed that the best time to sign a contract was in the spring, when there is more water in the Daugava River, but the market has changed – it is now influenced by weather conditions, political processes and other factors, so the most favorable moment can come at any time. To determine this, it is advisable to regularly follow market news and communicate with your customer manager, who will take care of current issues throughout the contract period, as well as help assess the situation and provide information on upcoming events that may affect electricity prices. This allows you to react in a timely manner and jointly choose the most advantageous moment to conclude a contract.