Australia’s energy markets are always fluctuating due to the many complex factors influencing the cost of electricity.
As a result, businesses are seeing the effects of these fluctuations in electricity prices reflected in their electricity bills.
We understand that for businesses the impact of changing electricity prices on your operating costs can make it difficult to effectively plan and budget for the future.
That’s why we offer a range of flexible contracting options that can help your business better navigate fluctuations in the energy market.
While traditional fixed-price contracting locks in a price based on pricing at the time of the agreement, our flexible options like Strategically Timed Energy Procurement (STEP) Online and STEP Index can make managing the more extreme swings of market volatility easier to navigate.
Progressive purchasing gives businesses the option of agreeing their electricity pricing during the term of their contract, spreading timing risk by locking-in energy prices as you go.
Exactly when you agree to your contract price can make a significant difference to cost, so it is worthwhile considering the types of contracting available. Learn more about two of our most flexible options below.
Shell Energy’s STEP Online product is designed to help larger businesses (customers that use more than 5GWh per annum) manage timing risk and exposure to market fluctuations.
Instead of agreeing to prices upfront at the time of contracting, STEP Online allows customers to choose prices for parcels as small as 5 per cent of total volume for the purchase period on a quarterly or annual basis.
This gives businesses an opportunity to monitor market prices for electricity and environmental schemes to proactively manage timing risk.
Unlike a traditional fixed-price contract where you are locked in for the term at the prevailing market price, STEP Online customers can progressively agree prices for parcels of energy or selected environmental products during the contract term.
A multi-year STEP contract allows the customer to adapt their approach year by year according to their view of the market.
If you would like the benefit of progressive purchasing but are not able to actively monitor the market on a regular basis, STEP Index may be suitable.
STEP Index is a type of progressive purchasing that lets you spread timing risk by averaging energy prices over periods of time, helping to smooth out market highs and lows.
Eligible customers1 pay the simple average of forward-market prices for electricity and environmental certificates. STEP Index smooths out the market highs and lows by buying a small percentage of your requirement each day at the prevailing market price in the weeks and months leading up to your contract period, resulting in an average market price.
Regardless of the pricing approach, Shell Energy’s electricity contracts do not have consumption restrictions, meaning if your business changes over the contracted term and you use more or less electricity than you expected, you won’t be penalised with higher prices or fees.
Contracts like STEP Index and STEP Online may help your business manage market fluctuations. We understand that the options can feel overwhelming, and we are committed to helping you find the right contracting option for your business.
Talk to your account manager, explore the Shell Energy website, or talk to your energy advisor for more information.
Agree your electricity prices progressively over your contract period for more control over the electricity prices.
Your electricity prices are the simple average of daily forward market prices calculated over a period of time to smooth out market highs and lows.
1 Customer uses more than 500MWh per annum, per state.
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