In our previous blog, you learned more about the different components of your energy bill. It is equally important to understand which aspects you can influence yourself when renewing your energy contract.
What can you compare?
The most important aspect to consider is the energy cost, which is largely determined by your pricing formula.
A wide range of pricing formulas are used in the energy market, making it essential to avoid comparing apples and oranges.
What should you look at?
Is the offer based on a fixed price, a variable price, or a combination of both?
Fixed Price
With a fixed-price contract, you pay a fixed rate that does not change on a monthly or annual basis throughout the duration of the agreement.
This price is always based on the Forward Market, also known as the long-term market. You can consult this market through the ICE Endex Belgian Power Base (also referred to as Belgian Power Base Load Futures). The price shown for CAL-27, for example, represents the market price for the year 2027.
Each supplier then applies its own pricing formula to this market price in order to determine the fixed price offered to you.
Variable Price
With a variable-price contract, your price changes every month or every quarter.
There are many different types of variable pricing formulas, which makes it crucial to examine the pricing formula and identify the market on which it is based.
Market prices that are known before the start of the consumption month are based on the Forward Market. Prices that are only known after the consumption month are based on the Spot Market, also known as the short-term market.
Some examples include:
- Endex101 = the arithmetic average of the closing quotations of the Belgian Power Base Load Futures during the month preceding the month of delivery (Forward Market). https://www.creg.be/sites/default/files/assets/Tarifs/ElectricityQuotations-NL.pdf
- Endex103 = the arithmetic average of the closing quotations of the Belgian Power Base Load Futures during the month preceding the quarter of delivery (Forward Market). https://www.creg.be/sites/default/files/assets/Tarifs/ElectricityQuotat…
- Belix (also known as EPEX DAM) = the arithmetic average of all quarter-hourly prices on the Spot Market during the relevant month. https://my.elexys.be/MarketInformation/SpotBelix.aspx
- Quarter-Hourly Belpex (also known as EPEX SPOT) = a pricing formula based on quarter-hourly market prices. This is also referred to as a dynamic pricing formula. https://www.elexys.be/insights/quarter-hourly-belpex-day-ahead-spot-be
Combination of Fixed and Variable Pricing
Some contract types allow a combination of both fixed and variable pricing.
In most cases, the contract is based on a variable price, while giving you the option to fix, or hedge, part or all of your consumption at a specific moment in time. This approach combines the flexibility of a variable contract with the security of a fixed price when market conditions are favourable.
TIP!
Calculate the cost in € for each proposed pricing formula based on your actual consumption, for example your consumption in 2025. Market prices are publicly available and your consumption volumes are already known. This provides a solid basis for making an accurate comparison between different contract offers.
Some quotations clearly outline additional charges, while others may contain hidden costs that are not immediately obvious to non-experts.
Here are a few aspects you should pay close attention to:
- Is there a fixed fee?
- Is there a fee for energy sharing?
- Is there a capacity charge or power fee determined by the supplier (in addition to transmission and distribution costs)?
- Are imbalance costs included?
- Are grid losses included or excluded?
- Is a security deposit required?
- What happens if you install a PV system or make a major change to your business operations that affects your energy consumption?
- What is the price applied for Green Certificates (GSC) and CHP Certificates?
There is no need to compare transmission and distribution charges or taxes, as these are identical across all suppliers.
We understand that comparing energy quotations can be a complex exercise, especially when several offers are based on completely different pricing structures.
That is why Elexys quotations are always designed to be as transparent as possible, and our team is always available to explain every detail.
Do you still have questions about the points above? Don't hesitate to contact Elexys!
