Procurement Fundamentals2 / 12
Contract Types (Fixed, Index, Flexible)
Fixed price (budget certainty), index (spot-following), collar (min-max price).
10 min read · Jacob Willis, Net Zero Lead · Last reviewed July 2026
How an organisation contracts for energy determines how much price risk it bears. The choice between fixed, flexible, and indexed contracts is one of the most consequential procurement decisions - balancing budget certainty against the chance of lower costs.
In this lesson
- 01The fundamental trade-off
- 02Fixed-price contracts
- 03Flexible procurement
- 04Indexed (pass-through) contracts
- 05The collar: capping the risk
- 06Matching contract to organisation
- 07Beyond the contract
- 08Sources and further reading