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Making Sense of the Wholesale Energy Market: Day Ahead vs. Month Ahead Rates

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The Ebb and Flow of Wholesale Energy Market Day Head Prices

Hello there! If you've ever taken a close look at wholesale energy market Day Ahead (DA) prices, you've probably noticed they behave a bit like a yo-yo. Take the week of 25th September to 2nd October 2023, for example. Gas prices ranged from 90.00 p/th to 112.25 p/th, and electricity was no less turbulent, swinging from £60.25/MWh to £97.00/MWh. It's like watching a suspenseful thriller—never a dull moment.

Supplier Rates: Why They Don't Ride the Same Rollercoaster

Now, when it comes to Month Ahead (MA) prices and what your supplier might charge you, that's more akin to a period drama—way less volatile and far more predictable.

Stability Matters to Suppliers

Energy suppliers don't have the luxury of living for the moment; they're always playing the long game. While Day Ahead rates reflect the market's immediate mood swings, suppliers are more conservative. They're looking at Month Ahead or even Year Ahead forecasts.

A Melting Pot of Factors

Think of supplier rates as a stew that's been slow-cooking all day. It's a blend of many ingredients, including but not limited to supply, demand, seasonal impacts, and global influences. So, they're not quick to react to the Day Ahead's ups and downs.

What's Up with Price Hikes and Decreases?

We've all seen it happen—prices shoot up in a heartbeat but come down at a snail's pace. Why? Well, energy suppliers are notorious for waiting for their competitors to make the first move.

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The Waiting Game

If Day Ahead rates are plummeting, don't expect your supplier to rush to slash their rates. They're more likely to wait and watch what the competition does first. It's like a game of chess, but instead of capturing the king, they're capturing market share.


What's the Takeaway for Your Business?

Keep Both Eyes Open

While Day Ahead prices are volatile and offer quick snapshots, Month Ahead rates give you the broader storyline. Being savvy about both helps you negotiate a better energy contract. Trust me, knowledge is power—no pun intended!

The Small Print Is Important

Even when Day Ahead rates take a dive, it doesn't necessarily translate into immediate savings on your next bill. Always scrutinise your contract terms, and perhaps have a word with your supplier to get the full picture.

Time to Wrap Up

Understanding the market is not all about numbers; it's also about market behavior. Keeping abreast of both Day Ahead and Month Ahead rates, as well as understanding supplier pricing quirks, can set you up for smarter decision-making. So don't skip our daily and weekly reports—they're your cheat sheets for energy market mastery.


How often do Day Ahead (DA) and Month Ahead (MA) prices fluctuate?

DA prices can fluctuate daily and are influenced by a multitude of factors like supply, demand, and global events. MA prices are generally more stable but can still change based on long-term forecasts and market conditions.

Is it generally more cost-effective to lock in a rate based on Day Ahead or Month Ahead prices?

How quickly do suppliers adjust their rates in response to changes in DA and MA prices?

What factors should I monitor to make the most informed decision on when to agree to a new energy contract?

Is there a specific time of year that is generally better for negotiating energy contracts?

How do global events impact both Day Ahead and Month Ahead prices, and how can I stay updated on these?

What is the average lag time between a drop in DA prices and a corresponding drop in supplier rates?

Do suppliers offer any flexibility in contracts to take advantage of lower rates, or are the terms generally fixed?

How much weight should I give to seasonal factors when considering a new contract?

If DA prices are currently low, should I rush to lock in a rate, or should I consider other factors first?

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Have More Questions?

  • Is it possible to change multiple business utilities at the same time?
    Our switching service allows you to switch multiple utilities simultaneously. We have successfully assisted multiple businesses in the UK by helping them save on various services such as energy and water with savings within 2023 already over the £2 Million mark.
  • How much can I save on my business utility bills?
    The amount you can save on your business utility bills will depend on various factors such as your current usage, the rates offered by different providers, and the specific deals available in your location. However, our switching service is designed to help you find the best deals and save as much as possible. By comparing multiple suppliers and negotiating competitive rates, we aim to maximise your potential savings. Get in touch with us to discuss your specific needs and get personalised information on potential cost savings for your business utility bills.
  • How does switching business utilities work?
    Switching business utilities involves a straightforward process. Here's a general overview of how it works: Evaluation: Start by assessing your current utility bills and usage patterns. This will give you an idea of your current costs and help identify areas where savings can be made. Comparison: Use a switching service like ours to compare different utility providers in your area. We provide you with quotes from multiple suppliers, allowing you to compare prices, contract terms, and services offered. Selection: Based on the comparison results, choose the utility provider that best meets your needs and budget. Consider factors such as price, customer reviews, contract terms, and any additional services or benefits offered. Contract Negotiation: Once you've chosen a new provider, our team can help negotiate the contract terms and rates on your behalf. Switching Process: The switching service will coordinate the transition with your current supplier and the new provider. This may involve submitting termination notices, arranging meter readings, and scheduling the activation of new services. Enjoy the Savings: After the switch, you'll start receiving services from your new provider, typically at the agreed-upon rates. You will notice savings on your utility bills, providing you with cost advantages for your business. Remember, the exact process may vary depending on the type of utility you are switching, but our switching service aims to simplify the process and assist you at every step.
  • Who are the cheapest business utility providers?
    As market conditions and prices fluctuate regularly, it's challenging to provide an up-to-date and definitive list of the cheapest business utility providers. The prices we provide you are valid and available on the day of the quote and will provide most current and competitive deals available. Our switching service helps you compare prices and offers from multiple suppliers, ensuring you have the most accurate and relevant information to make an informed decision about your business utility provider.
  • What is energy procurement?
    Energy procurement is the process of sourcing, negotiating, and securing energy contracts to meet the specific needs of a business. It involves analysing energy consumption patterns, understanding market trends, and negotiating with suppliers to obtain the best possible rates and contract terms.
  • Why is energy procurement important for my business?
    Energy procurement ensures that your business secures energy contracts that are both cost-effective and aligned with your operational needs. Proper energy procurement can lead to significant cost savings, budget predictability, and reduced risks associated with volatile energy markets.
  • How does The Smart Energy Company help with energy procurement?
    We specialise in analysing your energy consumption, understanding your specific needs, and leveraging our relationships with over 20 suppliers to negotiate the best possible contracts on your behalf. Our team ensures you get optimal rates, flexible terms, and contracts that align with your business goals.
  • How do you ensure I get the best energy rates?
    Our team continuously monitors the energy market, staying updated with trends, price fluctuations, and supplier offerings. Coupled with our in-depth analysis of your energy needs and consumption patterns, we negotiate with suppliers to secure rates that are both competitive and suited to your business.
  • Are there any hidden fees associated with your energy procurement services?
    Transparency is a core value at The Smart Energy Company. We provide a clear breakdown of any commission we earn as a company when you come to agree any new energy contract. This is typically included as an uplift in your unit rate and paid to us by the supplier you chose to go to. Our primary goal is to secure the best energy deals for you, with no hidden costs.
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Very helpful, quick expert advice. We have been using Smart Energy for a while.


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