Think a fixed-price energy contract lets you escape wholesale volatility? Think again.

“Fixed price” is one of the most reassuring phrases in energy procurement. It offers exactly what it says: a known rate, protected from day-to-day market movements for the length of the agreement.

The question is what has already been priced in before that rate is locked. Wholesale forecasts, supply risks and expectations of further disruption can all shape the price offered to a business. A fixed contract may protect a business from what the market does next, while locking in a price shaped by today’s uncertainty.

What gets priced into certainty?

The fixed rate offered to a business is shaped by projections for international gas prices, geopolitical disruption, shipping and pipeline constraints, expected demand, renewable output and the availability of power stations and imported electricity. When those conditions become less predictable, the uncertainty does not disappear. It can be reflected in the price a business is asked to lock in.

Recent years have shown how quickly the outlook can change. During the June 2026 heatwave, higher cooling demand coincided with low wind and constraints affecting gas, nuclear and imported power. At one point, Britain’s system operator paid £1,379/MWh for emergency imports, around 15 times typical day-ahead prices.

Businesses on PPAs were not charged that exact rate, but the episode illustrates how rapidly market expectations can shift, affecting the fixed offers available at renewal. A business may gain predictability, but at a rate already shaped by anticipated disruptions.

This helps explain why certainty remains attractive. PwC found that 89% of UK businesses said energy-price volatility had reduced profits, while 92% expected it to increase the prices of their products and services. But with the commercial stakes so high, buyers need to understand whether a fixed contract is removing volatility or simply pricing it in upfront.

A different route to certainty

Power purchase agreements can provide longer-term certainty by linking a buyer to renewable generation at an agreed price. However, a single wind or solar asset is unlikely to generate electricity in exactly the pattern that a business consumes it. Shortfalls may still need to be bought through the wholesale market, while surplus power may need to be sold back into it.

This volume and shape risk means a PPA can offer a partial reprieve from volatility without delivering a complete escape. PPAs can also require considerable commercial and operational resources to negotiate and manage, creating a high barrier for small and medium-sized businesses.

There is an alternative: matching demand with a broader portfolio of renewable generators, rather than relying on one asset or a rate formed through wholesale forecasts. UrbanChain’s marketplace matches buyers directly with renewable generators on a half-hourly basis, with prices agreed in advance. Using a diverse portfolio can provide a closer match between generation and demand, without relying on the traditional wholesale-plus-certificate model.

Fixed … but fixed to what?

Before renewing, ask: how was the rate formed, what happens when supply and demand diverge, and which risks remain? Price certainty matters. Businesses cannot control the weather, geopolitics or global gas supply, but they can decide how much of that uncertainty their next contract passes through to the bottom line.

Key takeaways