Progressive Purchasing For Progressively Smaller Loads

Increasing access to progressive purchasing as a tool to reduce energy costs for small and mid-cap electricity C&I consumers

As mentioned in last week's discussion of opportunities and trends for 2026, the ability to spread risk is increasingly valuable. At the same time, the ongoing development and maturation of the Australian wholesale electricity market has resulted in tools such as progressive purchasing contracts being available to a wider range of C&I consumers which were previously limited to larger consumers of electricity. Progressive purchasing contracts are not new to the Australian electricity market but are the favourite for large consumers of electricity to manage their electricity costs.

 A progressive purchasing structure allows a consumer to lock on portions of their total annual consumption at the wholesale market price of the day instantaneously, thereby allowing consumers to ‘average in’ their electricity costs over time instead of trying to time the market using a slower all-in fixed-price tender process. This allows both the smoothing out of year-on-year electricity costs while providing consumers with much faster reaction speed to take advantage of opportunities for lower prices.

Up until recently these tools were limited by minimum consumption requirements and minimum transaction sizes which made it impractical and uneconomical for all but the largest consumers in the economy to take advantage of these tools. Technological and process improvements by energy retailers in Australia however have evolved towards much more flexibility and ability to provide access to a much wider range of C&I consumers.

Schneider’s Risk Management team has provided ongoing management advice utilising progressive purchasing contracts for over a decade and today helps manage around 10% of Australia’s C&I consumption in the National Electricity Market. Since 2020, Schneider has saved an average of 10.72%, 12.92% and13.86% annually in New South Wales, Victoria and Queensland respectively vs. an average market price in these states, and this history of outcomes mean Schneider strongly recommends this contract structure for clients looking to decrease energy costs over time.

Start lowering your energy costs now. Speak with our expert Gareth Simpson to set up a progressive purchasing strategy tailored to your consumption.