3. Market contracts: opt for a fixed price or a price indexed to the wholesale market?
As already mentioned, alternative suppliers offer their customers three types of contract: 1) Contracts with a price indexed to the TRV; this mainly concerns small domestic customers; 2) Fixed-price contracts (generally for 1 or 2 years); this mainly concerns small and medium-sized professionals; 3) Variable-price contracts indexed to the wholesale price. This mainly concerns large consumers. It should be mentioned that EDF can also offer this type of contract to its professional customers or to domestic customers who have opted out of the TRV.
When alternative suppliers (apart from Engie, TotalEnergies or subsidiaries of foreign groups such as Iberdrola) do not have their own production facilities, which is often the case for small suppliers, they can source electricity from the ARENH and must buy the market complement on the spot market. To do this, they hedge...
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Market contracts: opt for a fixed price or a price indexed to the wholesale market?
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