Understanding Termination Notice requirements for Business Energy Contracts

26/08/25

Did you know that with many energy suppliers, you may not be free to leave at the end of your current contract? You may be required to give Termination Notice beforehand.

What is termination notice?

A formal notice from an organisation to their energy provider, requesting to terminate their existing contract at its end date and avoid any auto-renewals. 

What do you need to do?

Contact your supplier, usually via email although they may accept it verbally, stating your wish to exit your current agreement on its end date.  You should reference any supply and account information to ensure they can apply it correctly. It’s also important to obtain written confirmation that the termination notice has been accepted.

When do you need to take action?

Energy suppliers who require termination notice will generally have a set deadline of when it should be received by.  This normally ranges from 30 – 90 days before the contract expires. However, many suppliers will accept termination notice as soon as a contract is live, so it can be sent immediately after a contract commences. 

What can happen if you do not take action?

If a business does not submit the correct termination notice, their supplier will be able to retain ownership of the supply and refuse any transfer requests until the appropriate terms have been met. What happens next will be at the suppliers discretion; they may simply auto-renew onto a new fixed-term contract for a minimum of 12 months, likely on above market rates.  Alternatively, some suppliers continue to require a minimum 30 days’ notice after your contract has ended.  In this instance you may be placed on higher out of contract/deemed rates until the notice period has been served, before being able to switch to an alternative supplier.

Ofgem encourages suppliers not to auto-renew customers, particularly for smaller businesses, but, for now at least, it remains at the individual supplier’s discretion.

It is worth remembering that even if you serve termination notice, you can still remain with your existing supplier (by agreeing a new contract at a later date).  Issuing the notice just allows you the option of switching to an alternative provider (at the end of your current fixed term contract), if more competitive rates and terms are available elsewhere.  Therefore, it’s important that business energy customers submit termination notice to their current suppliers, within the appropriate timeframes, to ensure they are getting the most competitive rates and terms for their business. The amount of notice required to terminate your contract, varies depending on the supplier.  Typically, however, you will need to give 90 days’ notice before the fixed term contract end date.

If you are a microbusiness, then you should receive a renewal letter from your energy supplier advising when your contract renewal is due, so check your contract now to see when your current agreement is expiring and how much notice is required.

Once you have identified your contract end date, the next step you should take is to understand what the requirements are, for your termination notice. You may need to provide written notice via e-mail or fill in an online form to terminate. Once you’ve served your notice (and it has been accepted) then you are free to switch to a new supplier, if you so wish.

Please be aware that you can agree a new contract to switch to an alternative supplier, prior to submitting the termination notice to the incumbent supplier, however you must ensure the termination is still issued to the current provider within the appropriate timescales to allow the switch to be completed.

How IEC can help your Business

We review all of our clients’ contracts to fully understand their termination terms to ensure all renewal options remain open. So, if you have a fixed term agreement coming to an end before the year, then you should be acting now to ensuring the appropriate notice is provided, avoiding any unnecessarily high charges. 

Purchasing business energy is not easy. It can be difficult to know whether you’re paying the right price, especially in the currently volatile market. However, on average, our clients save 15% on their renewal offers. As an independent company, we aren’t tied in with any particular suppliers. So, we can source the best price – at the most appropriate contract terms – for your business.

To discuss how we could meet your business energy needs, and reduce your costs, please get in touch https://www.innovativeenergy.co.uk/contact/