Energy Myth #4: "Spot Is Always Cheaper Than a Fixed Price"

Few lines are as persistent in energy procurement as this one: “Spot is always cheaper.” It sounds logical — and it’s still too short-sighted. Because it mistakes a look in the rear-view mirror for a strategy.

What the market shows

Spot prices follow supply and demand hour by hour. In a sunny, windy year that can be cheap — in 2025 Germany saw several hundred hours of negative power prices. But it can be just as expensive when generation is scarce and demand is high. A fixed price flips the logic: you pay a set price and buy planning certainty — which the supplier charges for through a risk premium.

Neither route is a law of nature. Spot is a bet on cheap market phases; fixed is an insurance against expensive ones. Which is better doesn’t depend on the product, but on the portfolio’s goals.

Why the myth persists

“Cheaper” is a seductively simple claim. It just leaves out the decisive variable: risk. For a single asset, a spot spike may be bearable. Across a portfolio with fixed service-charge budgets, lease terms and return targets, the same volatility can become a problem — not as an average price, but as budget uncertainty.

What actually decides

It isn’t spot or fixed that decides — it’s the procurement strategy behind it. That depends on:

• Budget and risk tolerance — how much swing can your service-charge budget really absorb?

• Portfolio load profile — when and how evenly is energy consumed?

• Market phase — is the forward market attractive right now or not?

• Investment horizon — is the asset being held or sold?

• ESG goals — do you need green power, a PPA, guarantees of origin?

• Flexibilities — is there PV, storage or load-shifting on site?

These factors produce the right mix — often a combination of fixed and market-linked shares, not an either/or.

The NeoBid view

Look only at the unit price and you optimise a single number. Steer the portfolio and you optimise budget certainty, risk and value across the entire holding period. That’s exactly where NeoBid comes in: we derive the right procurement strategy from load profile, goals and market conditions — instead of giving a blanket product recommendation.

Conclusion

“Spot is always cheaper” is a statement about the average — not about your portfolio. The better question isn’t “spot or fixed?” but “which strategy fits the budget, risk and value of my assets?”.

NeoBid doesn’t think of energy as a price comparison — but as a strategic value driver for real estate portfolios.