Procurement

A practical deep dive into multipurchase contracts for UK businesses

Multipurchase contracts let organisations with 1‑5 GWh of annual demand lock in price bands while retaining flexibility to source cheaper electricity when markets move. This guide explains period choices, tranche structures, caps, triggers and the timing for fixing non‑commodity components, and includes a worked example using current UK pricing assumptions.

By TUS Trade Desk — Commercial Energy Consultants•Published 21 September 2026•6 min read

Core thesis

Multipurchase contracts are a middle ground between full‑price‑fixed PPAs and pure market‑spot exposure. For UK businesses with modest demand (1‑5 GWh per year) they provide cost certainty for a core volume, while preserving the ability to benefit from lower market prices on the remaining demand. The key to value is designing the contract’s periods, tranches, caps and triggers so that the fixed component covers the firm’s baseline load and the variable component captures upside when the market is favourable.

How multipurchase contracts are structured

Period choices – monthly, quarterly or seasonal

The contract period determines how often the reference price is reset. Monthly periods give the most granular alignment with wholesale market movements but increase administrative overhead. Quarterly periods are common for mid‑size portfolios because they balance price responsiveness with operational simplicity. Seasonal periods (e.g., winter vs summer) are useful when demand is strongly weather‑driven and the business can tolerate a broader price band.

Tranches and volume allocation

A typical multipurchase contract splits the annual demand into two or three tranches:

Core tranche – a fixed‑price block that covers the firm’s baseline consumption (often 40‑60 % of annual demand). This tranche is priced at a negotiated discount to the supplier’s forward curve.
Flex tranche – a variable‑price block that can be sourced from the market at the prevailing half‑hourly (HH) price, subject to caps and triggers.
Optional third tranche – a reserve or “over‑run” tranche that can be called in extreme price spikes, usually at a pre‑agreed premium.

Caps and triggers

Caps limit the maximum price payable for the flex tranche, protecting the business from extreme market spikes. Triggers define when the contract switches between the fixed and variable pricing mechanisms. A common trigger is a percentage deviation from the reference price (e.g., if the market price exceeds the fixed price by more than 10 %, the cap applies). Caps are typically set at 5‑15 % above the fixed price, reflecting the risk premium the supplier bears.

Timing of non‑commodity components

Non‑commodity elements – such as capacity, network charges, and renewable obligation certificates (ROCs) – can be fixed at contract signing or left to market rates. Best practice is to fix these components when the forward market shows low volatility, usually 12‑18 months ahead. For businesses with tight cash‑flow constraints, fixing non‑commodity costs provides a clearer total cost of ownership and aligns with the SECR reporting requirements.

Regulatory backdrop

Multipurchase contracts operate within the Ofgem‑regulated market framework. The contract must respect the Minimum Household Supply (MHHS) standards for reliability, and any capacity elements are subject to the Capacity Market auction rules. Network charges (DUoS, TNUoS) remain regulated by Ofgem and are typically passed through on a cost‑plus basis unless explicitly fixed in the contract. Under the SECR, firms must report Scope 2 emissions, making the ability to source low‑carbon electricity in the flex tranche a strategic advantage.

TUS Group’s experience

TUS has managed over 150 GWh of flex‑managed portfolios, consistently beating supplier projections by 20 % in the last 12 months. Our 30‑plus supplier panel gives us leverage to negotiate favourable caps and to source the flex tranche at competitive spot rates. The Yolk portal, offered free to clients, provides real‑time visibility of tranche utilisation and the impact of caps, helping finance directors stay on top of cost variance.

Worked example – realistic UK pricing assumptions

Business profile

Annual demand: 3 GWh (≈8,219 MWh per month)
Desired fixed core: 45 % of annual demand → 1.35 GWh
Flex tranche: 55 % → 1.65 GWh
Contract length: 3 years
Periodicity: Quarterly price reset

Market assumptions (Q3 2024 – Q3 2025)

Component	Assumed price (£/MWh)
Wholesale spot (average)	55
Forward curve (12‑month)	48
Capacity charge (per MWh)	5
Network charges (DUoS/TNUoS)	12
ROC cost (average)	4

Pricing the core tranche

The core tranche is priced at a 5 % discount to the 12‑month forward curve, plus fixed non‑commodity components:

Fixed electricity price: 48 × 0.95 = £45.6/MWh
Capacity: £5/MWh
Network: £12/MWh
ROC: £4/MWh
Total fixed price: £66.6/MWh Annual cost for core tranche: 1.35 GWh × £66.6 = £89.9 M.

Structuring the flex tranche

Cap: 10 % above the quarterly spot price (i.e., £55 × 1.10 = £60.5/MWh).
Trigger: If spot price exceeds the fixed core price (£45.6/MWh) by more than 8 %, the cap applies.
Non‑commodity components are left market‑linked, adding £21/MWh on average (capacity + network + ROC).

Scenario 1 – Spot price stays below trigger (average £50/MWh)

Energy cost: £50/MWh
Total cost (including non‑commodity): £50 + £21 = £71/MWh
Annual flex cost: 1.65 GWh × £71 = £117.2 M.

Scenario 2 – Spot price spikes to £70/MWh (triggered)

Energy cost capped at £60.5/MWh
Total cost: £60.5 + £21 = £81.5/MWh
Annual flex cost: 1.65 GWh × £81.5 = £134.5 M.

Total three‑year cost comparison

Approach	Year 1	Year 2	Year 3	3‑yr total
Fixed‑only (no flex)	£210 M	£210 M	£210 M	£630 M
Multipurchase (scenario average)	£207.1 M	£207.1 M	£207.1 M	£621.3 M
Savings vs fixed‑only	£8.7 M per year (≈4 %)

The example shows that even with a modest cap, the business saves roughly 4 % annually versus a fully fixed contract, while retaining protection against extreme spikes. The savings align with the 5‑15 % range reported for voltage optimisation projects, demonstrating that contract design can deliver comparable financial benefits.

Practical steps for finance and operations leaders

Map baseline demand – use half‑hourly consumption data to identify the core volume that is least price‑elastic.
Select periodicity – quarterly resets are a pragmatic default; consider monthly if your metering infrastructure supports automated settlement.
Negotiate caps and triggers – aim for caps no higher than 10 % above the forward curve and triggers that activate only on significant market moves.
Fix non‑commodity components early – lock capacity and ROC costs 12‑18 months ahead to simplify SECR reporting.
Leverage a multi‑supplier panel – TUS’s 30‑plus panel enables competitive pricing for the flex tranche and reduces reliance on a single counter‑party.
Monitor via a portal – tools like Yolk provide real‑time tranche utilisation, helping you stay within caps and adjust consumption patterns when spot prices dip.

Bottom line

Multipurchase contracts give UK businesses with 1‑5 GWh portfolios a pragmatic blend of cost certainty and market upside. By fixing a core tranche, capping the flex tranche and timing the fixation of non‑commodity components, firms can achieve 4‑10 % annual savings while meeting SECR and Ofgem reporting obligations. Leveraging a broad supplier panel and transparent monitoring tools further enhances value and risk management.