Temporary electricity contract is usually valid for two years from the date of subscription. Fixed-term electricity contracts are also available from some electricity companies for one and three years. However, three-year fixed-term contracts are not permanent - consumers have the right to terminate a three-year contract after only two years.
For most electricity companies, fixed-term electricity contracts automatically continue as contracts of indefinite duration. It is not possible to automatically renew a fixed-term contract with another fixed-term contract without the consumer's consent.
The advantage of a fixed-term contract for the consumer is the predictability of pricing; for fixed-term contracts, the basic electricity bill and the electricity price (per kWh) often remain the same throughout the billing period. For electricity companies, fixed-term contracts are obviously good for cash flow predictability and avoiding customer losses.
Can a fixed-term electricity contract be terminated?
For fixed-term electricity contracts, termination is almost invariably only possible in the event of a move. For other reasons, a fixed-term contract cannot normally be terminated without a penalty.
Fixed-term contracts are a practical way for companies to retain customers for a longer period of time. Customer loyalty ensures future cash flow for the company, so the electricity company does not have to worry so much about losing customers to competitors. However, fixed-term contracts are not necessarily the most advantageous option for consumers. It is therefore always worth weighing up the various factors carefully when purchasing an electricity contract, and comparing prices between the different contract options offered by different electricity companies.
Fixed-term electricity contract and relocation
It's easy to terminate your fixed-term electricity contract when you move - all you need to do is notify the electricity company that you are moving and want to terminate your contract. When you move, you can also easily put electricity out to tender and save on future electricity bills.
If you wish, you can also transfer your fixed-term electricity contract to your new home. In this case, you need to inform the electricity company in advance. You should usually give at least 14 days' notice so that you can be sure that the electricity will be working in your new home immediately after the move.