Contract type comparison
Fixed-term contract vs Open-ended contract
The duration of an electricity contract affects both flexibility and price. With a fixed-term contract, you typically commit for 12-24 months, while an open-ended contract can be terminated at any time. Which suits you better?
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Benefits and risks of a fixed-term contract
A fixed-term contract locks in the unit price of electricity for the contract period. This protects against price increases but prevents you from benefiting from price decreases. If market prices fall during the contract period, you pay more than you would have with a flexible contract. Terminating the contract before the end of the period usually incurs a termination fee.
Benefits and risks of an open-ended contract
An open-ended contract offers full flexibility: you can compare and switch contracts at any time with 14 days' notice. Spot-price contracts are almost always open-ended. The downside is price uncertainty - with spot-price contracts, the price varies hourly, and with open-ended fixed-price contracts, the seller can raise the price with notice.
Which contract type to choose?
If a rise is visible in the electricity market, a fixed-term contract locks in a favourable price. If prices are high or falling, an open-ended spot-price contract provides the flexibility to switch or benefit from falling market prices. Most experts recommend spot-price electricity (open-ended) as the default choice and a fixed-term contract only when the market situation supports locking in the price.
Recommendation
For most consumers, an open-ended spot-price contract is the best choice thanks to its flexibility and on-average lower price. A fixed-term contract is suitable when you want to lock in a favourable price ahead of a visible price rise.
Frequently asked questions
Can a fixed-term contract be terminated early?
Yes, but it costs money. Typically, the termination fee is the value of the remaining contract period or a fixed amount (50-200 €). Always check the contract terms before signing.
What happens when a fixed-term contract ends?
The contract usually transfers automatically to an open-ended contract at the seller's general price. This price is often more expensive than the market-priced alternatives, so remember to compare offers before the period ends.
How quickly can I switch an open-ended contract?
The notice period is 14 days in consumer contracts. In practice, the new contract begins about 2-3 weeks after the switch is initiated. The switch is automatic - the new electricity company handles the transfer.
Is spot-price electricity always open-ended?
Almost always. Spot-price contracts are by their nature open-ended, because the price is determined by the market price. Some sellers offer fixed-term spot-price contracts in which the margin is locked for a specific period.