July Review

2 August 2023

July 2023



As the Ashes were fiercely contested in England and reported heatwaves dominated news from the continent, July was an eventful month in the world of energy. There was a tightening in the wholesale gas market as the price failed to reach either the highs or lows of June, consolidating ahead of the next move. While the consolidation may be a sign of a lack of certainty in sentiment regarding energy markets, this may be seen as a positive given some of the more bearish news we saw in July. Whereas in the past year the market may have reacted swiftly and prices would have risen on the back of any negative news, there seemed to be a more considered response to supply-based fears.


Centrica expressed concern that the UK  will struggle to deal with any period of cold weather with low wind this winter. Should such an event occur it would mean the UK becomes more reliant on gas, yet the UK’s gas storage levels are limited, particularly when compared to that of other European countries. The UK’s storage capacity of 12 days worth of average consumption is less than 10% of the gas storage capacities of France, while Germany and the Netherlands also have enough capacity to store months of gas. There are plans to restore some previously closed gas storage facilities after the 2017 decision to shut down numerous storage sites has come in for heavy criticism. It has left the country increasingly reliant upon gas imports and, as such, any volatility in gas prices will have a more pronounced impact.


In more positive news, July saw the final length of the Viking Link interconnector joined, completing the physical link between England and Denmark. This will allow energy sharing between the UK and Denmark allowing for cheaper and cleaner import/export of energy between the two countries.


However, it wasn’t all good news from the continent. Heatwaves in France forced EDF to restrict nuclear production this month. While this may not become a large issue, more sustained hot water temperatures near the nuclear plants could further limit production and lead to a supply shortfall.


UK businesses may be a beneficiary of a proposal announced this month to increase protections and transparency on payments made to energy brokers. The aim is to provide clear guidance and regulation on these issues and hold accountable unscrupulous brokers who fail to act in the best interest of their clients. By enforcing these regulations, a higher level of protection will be offered to businesses and confidence can be restored in the industry.


After OFGEM had previously announced that the energy price cap is set to decrease in October there was some disappointing news from consultancy Cornwall Insight. They announced that, despite the price drop in October, prices are expected to rise again at the beginning of 2024, and they will remain above pre-pandemic levels for the foreseeable future. This was backed up by Investec who said they expect energy bills to remain high at least through to the 3rd quarter of 2024, with prices not expected to show a significant decrease for over a decade.


In spite of this analysis, some organisations have been finding ways to reduce their energy spend. West Northamptonshire council announced that they have managed to save £1.8m in energy spend through a flexible bulk purchasing model. While flex purchasing is normally reserved for large institutions there are an increasing number of ways that smaller businesses can take advantage of flexible purchasing contracts. By purchasing energy across seasonal markets businesses can have a greater freedom in when to buy their energy in advance and when to buy from the day ahead market. With the risk premiums associated with fixed contracts increasing over the past 2 years, flex contracts are increasingly being seen as a viable method for reducing energy spend. If you would like more information on flexible purchasing, feel free to contact us today and see if it could be the right option for you. 


As we start to edge closer to winter, it seems likely that concerns about supply for the winter of 2023 will increasingly drive the price narrative. With the failure to make a new low during July it now seems unlikely that wholesale prices will go below the low of May 30th and we are likely to see steady increases for the next few months. If you have a contract coming up for renewal before the end of Winter 2023, now could be an ideal time to review the prices currently available, as it seems unlikely that prices will improve in the coming months.

November 2025 Review

1 December 2025
By Adam Novakovic Whilst November’s budget may have disappointed businesses hoping for governmental assistance in the battle against high energy prices, the wholesale market offered some hope. With the mandated need for EU nations to replenish their reserves now in the rear-view mirror, buying pressure dissipated, and there were many positive stories that helped send prices downwards. The first half of the month saw small rises and drops that largely cancelled each other out, but from November 18 th through to the 28 th , wholesale gas prices fell approximately 12% and reached their lowest levels since July’24. There is normally a slight delay before the wholesale price drops are passed on to the end user, but for those with contract expiry dates in the next 6 months, the coming weeks may present opportunities to obtain quotes at rates more favourable than at any other point in 2025. One of the main reasons for optimism regarding future gas supplies is the peace talks being held between Russia and Ukraine. Any formal deal will almost certainly include a lifting of sanctions on Russian gas sales and provide a significant supply boost to the global market. However, there may still be obstacles to overcome before any peace plan is finalised with Ukraine and Russia both unwilling to concede territory.

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.