Flexible purchasing the term coined by large energy users in the Uk is becoming more and more popular, with players wishing to be able to take on their own risk and manage it in a mature way. In reality flexible purchaisng has existed for a long time, in fact many companies several years ago opted for a six month contract to move them away from the heard of buying in April and instead the herd of buying now occurs in October. As a result of recent price rises, it has become apparent that putting your electricity contract in the drawer for next year can lead to disastrous shocks in planning and budgeting and many suppliers will tell you of stories of if only they had taken my advice. Flexible purchasing should not be confused with trading, which involves taking short positions and selling. However, the principles behind buying power and gas have changed significantly with many industry analysts asking how exposed to power prices a company is. Ironically due to increases in volatility the market has become slightly less liquid and paying for power on a forward basis has become quite expensive, those who are capable of analysing and managing their risk, may well wish to look at leaving it on the prompt and looking at recent balancing mechanism prices the prompter you leave it the better the price. Of course this will not always work, and it is now the role of the energy manager to look at this in more detail and assess the best way forward. In reality this can only be done with proper risk management a position management internally.

The market remained lacklustre with a slight rise in prompt prices, but the curve falling by 20p in reaction to low fundamental news.