What Is a Bilateral Electricity Agreement?

A bilateral electricity agreement is a direct commercial agreement between an eligible consumer and an electricity supplier on price and contract terms. Physical electricity distribution continues through the distribution company infrastructure; the changing part is the commercial supply relationship.

This model allows businesses to receive offers outside the regulated supplier tariff, choose a pricing model and define the contract period according to their own risk appetite. However, a contract signed without proper analysis may fail to deliver the expected total invoice advantage even if the visible unit price looks low.

Who Is an Eligible Consumer?

In the Turkish electricity market, consumers above a certain annual consumption threshold may become eligible consumers and use their right to choose a supplier. The eligible consumer limit is a topic that should be followed through periodic EPDK decisions; therefore, before contract negotiations begin, the relevant subscription’s current limit, consumption history and supplier-switching suitability should be checked.

Industrial facilities, hotels, hospitals, cold storage facilities, shopping centers, chain stores and large office buildings are often subject to eligible consumer assessment. In multi-location structures, consumption should be reviewed not only as the company total, but also by subscription and meter. Every location may not be suitable for the same supply model.

Difference Between the Incumbent Supplier and a Bilateral Agreement

The incumbent supplier model proceeds with regulated tariffs and standard processes. In a bilateral agreement, supplier selection, pricing model, contract duration and risk sharing are defined between the parties.

This flexibility creates value, but it also requires contract literacy. Deciding only because the "kWh price is lower" is not enough.

Three Main Pricing Models

Fixed price

A fixed energy unit price throughout the contract period provides budget predictability. It can create protection when market prices rise. On the other hand, if the market falls, the business may remain in a more expensive contract.

Market-indexed price

This is a variable model linked to the day-ahead market price. It can be advantageous when the market is low, but invoice management becomes harder during periods of high volatility. Hourly consumption profile is very important here.

Hybrid model

Part of the consumption is structured as fixed price and part as market-indexed. It distributes risk, but if the ratio is set incorrectly, the disadvantages of both models can come together.

Contract Clauses That Must Be Checked

When comparing offers, the following topics should be reviewed separately:

• Contract duration, automatic renewal and exit notice
• Price update mechanism and which items are fixed
• Consumption deviation tolerance and penalty clauses
• How imbalance, capacity, distribution and fund items are reflected
• Reactive energy, demand exceedance and compensation responsibilities
• Distribution company notification calendar for supplier change
• Security deposit, invoice maturity and delay clauses

Comparing offers only by placing active energy unit prices side by side is incomplete. Some offers show a low energy price but increase total risk through imbalance, service fee, guarantee, consumption deviation or early exit clauses. For this reason, offers should be simulated under the "same invoice assumption."

Which Businesses Is It More Critical For?

Bilateral agreements produce more measurable results especially for businesses with high consumption and a clear load profile. Three-shift production facilities, cold storage warehouses, continuous processes, high base-load structures similar to data centers and multi-location chains are directly affected by supply strategy.

For businesses with seasonal consumption, the contract should be built more carefully. In hotels, agricultural irrigation facilities or factories with seasonal production, low-season consumption may deviate from the committed consumption amount. In this case, flexibility clauses become as important as price.

Separate Evaluation for Businesses with Solar

For businesses with solar investments, the bilateral agreement becomes more sensitive. Net withdrawal hours, surplus production, settlement model and supply price work together.

For example, if a facility creates daytime production surplus but has high net withdrawal at night, an indexed or seasonal pricing model may produce a different result than expected. Therefore, the solar generation profile and supply contract should be modeled in the same table.

How Does the Switching Process Work?

The switching process starts with the review of the last 12 months of consumption and invoice data. After eligible consumer status, subscription information and any obstacle to supplier change are confirmed, offers are collected from multiple suppliers. In the decision stage, not only unit price but also contract terms, consumption deviation, guarantees, notification calendar and invoice maturity are compared together.

After the contract is signed with the selected supplier, distribution company notifications and the transition calendar are tracked. At this stage, there is usually no physical change at the facility; the real risk is whether the commercial transition is reflected in the correct period and with the correct contract terms.

After the transition, the first two invoices should be checked separately. Topics such as whether the supplier change was reflected correctly, whether the consumption period was split, whether distribution and other charges arrived as expected and whether the contract pricing model was applied correctly on the invoice should be caught early.

Conclusion

A bilateral agreement is a powerful tool for reducing electricity cost, but it should not be seen as a search for a "cheap price" alone. The real advantage appears when consumption profile, market risk, solar generation, contract clauses and invoice items are managed together.