February Review

1 March 2024

By Adam Novakovic, Energy Markets Consultant


In what proved to be the wettest February in 258 years, we saw energy prices continue their downward trend. Electricity prices for the upcoming summer season fell approximately 20% in the first 3 weeks of the month before ending the month with a small rally in a pattern mirrored by the gas prices.


The energy markets saw prices pull back to levels not seen since 2021, although after 7 weeks of the price falling some counter movement was to be expected. For companies on flexible contracts who are looking to make purchases, the 2nd and 3rd weeks of February represented an ideal time to lock in prices as the market achieved a short-term bottom. The end of the month rise seems likely to be caused by parties looking to de-risk and lock in prices while they are at these lows. The downtrend could very well be set to continue after this period of de-risking, but there now appears to be a greater risk to the upside than there is potential for large decreases.


One of the primary reasons for this continued decline in price was the milder than expected weather in February. While it may have been wet, windy, and unpleasant, it wasn’t quite as cold as had been feared, which led to lower levels of gas consumption throughout the month.


The market also appears to have developed further resilience to negative news on the supply side. The first week of February saw a halt in exports from Norway’s Nyhamna processing plant. A power outage at the plant coincided with a compressor failure at the Troll gas field, which further reduced Norwegian export capacity. In the previous 3 years events such as this have caused sharp spikes in price. As recently as a few months ago, threats of industrial action at an Australian LNG plant caused prices to rise sharply. However, it seems faith has been restored in the UK’s ability to deal with some small supply-side shocks.


Part of this ability to deal with supply issues is related to decreased demand. Reports released in February showed that gas demand had decreased 20% across Europe since the Russia-Ukraine conflict began. Rising prices have made both individuals and businesses more conscious of how they consume energy, and consumption patterns have noticeably changed as a result.


One threat to the supply-side which may have an impact in the future is seabed warfare. Reports this month have highlighted attacks on subsea connections as a potential security threat to the UK. China and Russia were mentioned as countries that have sufficiently advanced technologies in this area, an area that the UK may be under-prepared for. Should we see seabed warfare increasingly occur, it could be a case that this becomes one of the major threats to the UK’s energy supply.




Outlook

As a result of the previously mentioned lower demand, UK reserve levels remain in a healthy state. As such there appears to be no need for large purchases to replenish these levels, which suggests the downtrend could be likely to continue into the summer months.


The conflict in the Red Sea still remains a risk. While we saw further Houthi attacks on commercial vessels this has yet to impact LNG exports out of the region. The threat of Lebanon and Iran being pulled into any escalating conflict should be a cause for concern though, and any developments will need to be monitored closely.


The end of month buying doesn’t appear to suggest a change in trend, merely some expected buy-back after a prolonged period of decline. This may continue into the first few days of March, or we may a slightly longer period of price stability, but it seems after this period, the decline in price will likely continue. For those with flexible contracts this month has presented good opportunities to make purchases, but further declines seem probable, albeit with there now being an asymmetrical element of risk should the market encounter a supply-side problem of significance.


If your business requires advice with its energy procurement, management, or planning, then don’t hesitate to contact Seemore Energy to speak to experienced advisors who can help you with bespoke strategies and advice that is tailored to your needs. 

How the 2025 Budget Neglects the Concerns of Struggling UK Businesses

26 November 2025
By Adam Novakovic With many British businesses struggling to navigate the challenges that soaring energy costs have had on their ability to compete internationally, there was a sense of optimism that the government would introduce measures designed to alleviate the pressure that many companies have been burdened with. As we close out 2025, Energy costs are typically within the top 3 overheads for any business operating from commercial property & rising costs are fast becoming the most significant risk to sustainability, which has far wider impacts to the UK economy. Unfortunately, no such measures were forthcoming and the announcement fell flat for those that need it most. Hopes of expanding the NCC or EII discounts to further sectors, or reducing VAT levels on gas and electricity, turned to disappointment, as only minor changes were announced. One such change was the government’s decision to abolish the Energy Company Obligation (ECO) and to fund a substantial portion of Renewables Obligation costs through general taxation. Although these measures are aimed at easing pressures on domestic consumers, they also remove some of the cost drivers within the wider energy system. With fewer policy-driven levies feeding into wholesale and supplier operating costs, businesses may experience a modest dampening effect on future price rises, although this is unlikely to translate into immediate or substantial reductions in commercial tariffs. The Budget did reinforce the government’s commitment to green investment through its updated Green Financing Framework, which will fund green expenditures that tackle climate change, rebuild natural ecosystems and support jobs in green sectors. While this is unlikely to have any short-term impact on energy costs, one small positive -- when compared to previous green schemes -- is that this programme will be funded by the issuance of gilts and bonds, rather than passing the cost on to suppliers who invariably pass the cost on to the end users.  Despite the need for assistance with rising energy costs, small and medium-sized enterprises (SMEs), many of which remain exposed to fixed-term contracts negotiated during the recent price spikes, are not going to see any immediate relief, and the accountability seems to remain solely at the door of the business owners to find their own ways to minimise costs.

The Ever-Increasing Standing Charge

23 November 2025
The ever-increasing standing charge By Adam Novakovic While finding ways to decrease consumption can help lower your electricity and gas bills, many of the savings accrued through reduced consumption can be seemingly wiped out by constantly increasing standing charges -- charges that end-users have no control over. As standing charges continue to rise, we take a look at the reasons behind this and whether this trend is set to continue. What are standing charges? A standing charge is the fixed daily fee you pay for your utilities before you’ve used a single unit of gas or electricity. The intention behind the standing charge is that it covers aspects of the energy network that require funds regardless of usage levels, such as: National Grid and local network costs Supplier operating costs and smart metering Some industry and government policy schemes A recent government consultation found that around half of the typical electricity standing charge is made up of network costs alone, with a further quarter linked to operating and industry costs.

October 2025 Review

3 November 2025
October Review By Adam Novakovic In the month of Halloween, October energy price movements were free of jump-scares. Whilst prices moved up slightly at the start of the month, they marginally decreased throughout the remainder of October. Ending the month slightly below the levels seen at the end of September. The expectation this month was that European gas reserves would be the key story impacting energy prices. The European Network for Transmission System Operators for Gas (ENTSOG) released their report on the Winter supply outlook. This confirmed that Europe is well prepared for the coming winter, with 83 % gas reserves recorded as of the 1 st of October, and infrastructure resilient enough to meet demand without Russian pipeline gas. Their projections had Europe ending the winter season with over 30% storage even in the most severe scenarios. There is also the expectation that any unforeseen supply disruptions can be mitigated through increased LNG imports -- supporting the EU’s goal of phasing out Russian gas while emphasising continually reducing demand. During the first week of October Russia launched a wave of drone attacks against Ukraine -- the largest since the war began. These strikes have damaged Ukrainian gas production and left storage at 42% of capacity. This has forced Ukraine to look at importing large quantities of LNG from Europe this winter. With the deal that brought Russian gas to Europe now expired, Europe faces added demand pressure. This comes despite Europe significantly reducing Russian gas imports and increasing LNG imports from other nations. With there currently being a large quantity of LNG available for importation, and with EU gas reserves being in a healthy position, it seems as though further conflict may not have a large impact on energy prices. This could change however if Europe were to experience a particularly cold winter.

The British Industry Supercharger

30 October 2025
With government-imposed charges making up an increasing percentage of business energy bills, it is becoming difficult for many UK industries to remain competitive in international markets. This led to the introduction of the British Industry Supercharger (BIS). A scheme for energy-intensive businesses that aims to counteract many of the government-imposed environmental levies and the rising transmission charges. In this article, we cover how it works and what your business needs to know to benefit from it. What is the British Industry Supercharger? Launched on the 1st April 2024, the British Industry Supercharger is a strategic package of relief measures aimed at energy‐intensive industries (EIIs) such as steel, metals, chemicals, cement, glass and paper. The aim is to reduce electricity non‐commodity costs so UK foundational industries can compete with businesses in nations with lower energy costs. The BIS is comprised of 3 sections: 1. Relief from Renewable Levies This provides businesses with exemptions from paying Renewables Obligation (RO), Feed-in Tariff (FiT), and Contracts for Difference (CfD). These charges were added to invoices in order to fund green-power generation. Under the Supercharger, eligible EIIs can receive up to 100% exemption from these charges. 2. Network Charging Cost Compensation This offers discounts on electricity network charges - including Transmission Network Use of System (TNUoS) and Distribution Use of System (DUoS) fees. These fees cover the cost of maintaining the national grid and distribution networks, but can represent a large proportion of industrial energy bills. The BIS introduces a Network Charging Compensation (NCC) mechanism, reimbursing eligible firms for around 60% of these costs. 3. Capacity Market Exemption The scheme offers eligible business a full exemption from Capacity Market charges. The Capacity Market is funded through indirect charges on electricity bills with the aim of funding generators to ensure they are available during supply-peaks.

Why UK Energy Prices Keep On Rising…

21 October 2025
Why UK Energy Prices Keep On Rising… And what it means to manufacturing and engineering companies over the next few years Over the past decade, UK energy prices have changed dramatically. Not only in terms of overall cost but also in how those costs are made up. Ten years ago, the largest part of a business electricity bill came from the commodity element: the wholesale price of electricity. Non-commodity charges -- often used to support the infrastructure of the electricity grid or government energy policies -- were relatively modest. In 2013, the typical breakdown of electricity costs for a business user was around 60–65% commodity and 35–40% non-commodity. Today, that picture has flipped. For many manufacturers, non-commodity charges now make up over 60% of the total bill, with the non-commodity percentage of the bill increasing each year. This shift explains why energy bills have remained stubbornly high, even during periods when wholesale prices fell. Grid reinforcement, renewable subsidies, and balancing costs have grown year on year, with these costs baked into every unit of power consumed, regardless of wholesale prices.

What happens when a supplier fails?

14 October 2025
In the last decade, over 50 UK energy suppliers have gone out of business. With Tomato Energy being issued with a provisional order this week, it seems as though their name will be the latest to be added to the list of defunct suppliers including Bulb, Avro, and Spark Energy. For customers of a supplier that is on the brink of going out of business, this can be a scary time, but there is a process in place to ensure they are not at risk of losing their supply. Who is responsible? OFGEM (The Office of Gas and Electricity Markets) are a non-ministerial government department tasked with regulating the energy markets and networks. In cases where a supplier goes out of business, OFGEM provide a safety net to ensure that customers supply won’t be disrupted. What is the process? OFGEM may elect to appoint an administrator. If this is the path they choose, then no action is necessary from the supplier’s customers. At some point, the administrator may choose to shut down the supplier, at which point, all existing customers will be moved to a new supplier of the administrator’s choosing.

MHHS: Market-Wide Half-Hourly Settlements

6 October 2025
Market-Wide Half-Hourly Settlement (MHHS) What is MHHS? MHHS stands for Market-Wide Half-Hourly Settlement. Currently, most electricity is billed based on estimates or meter reads that can be provided monthly, quarterly, or sporadically. With MHHS, electricity consumption will be accounted for and billed in 30-minute blocks. The idea is that with more precise, time-based data, suppliers and networks can match supply and demand more accurately. This helps reduce waste and allow more flexibility in how electricity is used across the system. Who does it apply to? Previously, only large industrial and commercial users needed to have half-hourly meters, but MHHS is intended to apply across the whole electricity market in Great Britain. This includes domestic consumers, small businesses, large industrial users, and everything in between. That means most electricity users will be indirectly affected, even if they don’t see anything change in how their meter looks, the rules behind billing and settlement will shift behind the scenes.

September 2025 Review

1 October 2025
September Review By Adam Novakovic We have reached the time of year where the summer months have started to fade and we begin to think about the colder seasons. This month saw the UK government recognise Palestine as a country, although they still seem unable to recognise the harm their energy policies are causing UK businesses. With further charges set to be added to UK energy bills and rising non-commodity costs, it was a relief that wholesale energy prices remained fairly flat throughout September. A recent report from independent analysts Cornwall Insights revealed that large energy users who aren’t covered by Government schemes could find that they are paying a further £450,000/year in non-commodity costs by 2030. With non-commodity costs such as DUOS and TUOS charges –which are used to fund the infrastructure responsible for the transmission of electricity – now accounting for over 2/3rds of total electricity costs for some businesses, it is of growing concern that these charges are set to continue rising. With the TUOS charges for 26/27 expected to increase significantly , the non-commodity charges are starting to have a negative impact on UK businesses ability to compete against foreign businesses with fewer governmental charges on their energy bills. This growing concern is yet to be addressed but could have a huge impact on many industries in the next year.

RIIO - ET3 and increasing costs

25 September 2025
Following on from our previous article about rising TNuOS costs , we look at the reasons behind energy price rises, and which other items on your bill are likely to increase in the near future. What is RIIO – ET3? RIIO: “Revenue = Incentives + Innovation + Outputs” is Ofgem’s regulatory framework for setting how much network operators can recover from users while delivering value, efficiency and innovation. The current RIIO-2 period ends 31 March 2026, and RIIO-ET3 (also called RIIO-3) will run from 1 April 2026 through 31 March 2031.

How TNUoS costs are set to rise

17 September 2025
How TNUoS costs are set to rise As the UK pushes towards a low-carbon energy system, there has been a sharp rise in costs for businesses connected to the grid. The National Energy System Operator (NESO) has released its latest five-year outlook on Transmission Network Use of System (TNUoS) charges, and -- from April 2026 – energy costs will rise significantly to fund the country’s energy transition. What Are TNUoS Charges? NESO uses the funds from TNUoS charges to build, operate, and maintain the high-voltage transmission network across Britain. The forecasts for 2026/27 have indicated that NESO will be looking to almost double the revenue generated in the previous year. While suppliers pass these charges on to both households and businesses, the scale of the increases ahead will be most acutely felt by large energy users.