January Review

1 February 2024

January Review

by Adam Novakovic, Energy Markets Consultant

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As many were nursing new year hangovers and endeavouring to stick to their freshly made resolutions, the UK gas and electricity markets began January 2024 by staying around similar levels to those seen at the end of 2023. However, after the first week of the year prices began to fall with futures markets seeing electricity costs fall over 5% as the 2nd week of the year began, and then continue to fall throughout the week.  

As the month progressed, electricity prices for Summer’24 were almost 25% lower than the levels seen in December 2023.  As prices continue to fall, we increasingly see these reductions in price being passed on to those looking to negotiate fixed contracts in the coming months.

A large reason for these falling prices were the steady supplies being received from Norwegian pipelines and LNG imports. These inflows combined with a milder than anticipated winter led to gas storage levels remaining high and the dissipation of any remaining fears about shortages.


Despite this positive news regarding falling prices there remained concerns about how the UK has seen energy prices rise disproportionately when compared to other countries over the last 5 years. The International Energy Agency found that since 2019 energy prices in the UK have risen at a faster rate than most other developed countries. This puts a particular strain on Energy Intensive Industries, although these numbers don’t account for UK government schemes aimed at allowing such industries to remain competitive internationally.


It's not just energy intensive industries that have been impacted by energy prices. A report by Simply Asset Finance found that almost 20% of SMEs have had to downsize and cut costs as a result of increased energy prices. They also found that 57% of SMEs were unaware of financial support or government schemes that were designed to help them. If you would like to find out if your business is entitled to any governmental schemes that can help reduce your energy spend then contact us today. We can help with the process of applying for any schemes you may be eligible for without charge.


In addition to seeing usage charges increase over the past few years, standing charges have also increased significantly. This month the standing charge became a much-discussed topic, with OFGEM receiving recommendations to change the way Standing Charges are offered to customers, as well as a group of MPs initiating a petition for the abolition of standing charges. As the year progresses, we will likely see OFGEM put more pressure on suppliers to change the way standing charges are being applied.


While prices dropped throughout the month, there were still some concerns that threatened to send prices higher. Conflict in the Red Sea saw many shipping routes diverted. Many cargos that would normally pass through the Suez Canal were forced to take the longer route around the Cape of Good Hope. This has yet to have a significant impact on price but will need to be monitored as the UK is reliant upon LNG imports from Qatar.


A further threat to LNG imports came from the US where the government has paused approvals on expanding LNG exports. Last year the US became the world’s number 1 exporter of LNG. While this isn’t expected to have any immediate impact on European energy prices, there could be mid-to-long-term effects that drive up prices from other LNG exporters.


Outlook

As we look ahead to how energy prices will move in the coming months, we can see a number of factors that have the potential to disrupt the current downtrend.


Should the conflict in the Red Sea escalate, or should shipping be further disrupted, this could negatively impact energy prices. The fact that shortfalls in supply from the Middle East currently can’t be made up by importing from the US make this a greater concern than when news of the conflicts were first reported.


Throughout this winter, weather has been a significant narrative in the direction of energy prices. While the temperature so far has been (mostly) milder than expected, forecasts for the 2nd half of February are suggesting it could be colder than originally anticipated. Given the healthy gas storage levels in the UK, this shouldn’t have too large of an impact, but it could become a factor if supply is disrupted.


Looking further ahead, there was positive news in the UK as plans for the Sizewell C nuclear reactor advanced. Construction is now set to proceed for the reactor that will add to the UK’s capacity in a reliable and environmentally friendly manner.


Should we avoid any of the potential disruptions to supply in February it seems plausible that prices could continue to drop. For the short-term we would urge some caution in the energy markets as prices are at their lowest levels in some time.  Looking beyond the current months, it seems reasonable to assume that prices will continue their current downtrend, although there may be a speedbump or two along the way.


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. 


ESOS Phase 4: What Businesses Need to Know

8 September 2025
ESOS Phase 4: What Businesses Need to Know The Energy Savings Opportunity Scheme (ESOS) is back for another cycle. Phase 4 officially began on 6 December 2023, and while the final compliance deadline of 5 December 2027 may feel a long way off, now is the time to start preparing. If your business was in scope for Phase 3, you’ll already be familiar with the process of calculating energy use, submitting an action plan, and reporting on progress. Phase 4 builds on that foundation, with a few important changes to be aware of. Who needs to comply with ESOS Phase 4? The rules on eligibility haven’t changed since the last phase. ESOS applies to “large undertakings” in the UK, meaning your organisation will qualify if, on the qualification date of 31 December 2026, it meets all of the following criteria: Based and registered in the UK Employs 250 or more people Has an annual turnover above £44 million Has an annual balance sheet total over £38 million To see if your business is eligible, visit our site and answer the questions to see if you should be participating in ESOS phase 4. Even if you don’t meet the criteria right now, if you cross the threshold on the qualification date, you’ll fall into scope and must submit your compliance notification by 5 December 2027. If your business previously qualified but no longer does, you’ll need to submit a “Do Not Qualify” (DNQ) notification to the Environment Agency through the online MESOS portal. Key requirements for Phase 4 Phase 3 introduced the requirement for organisations to create an Action Plan that set out how you intend to cut energy use and when. That same principle continues in Phase 4, along with mandatory progress reporting in the years that follow. However, there are some updates to note: Action plan progress must now be included within your ESOS assessment. If commitments aren’t met, your business will need to explain why. Display Energy Certificates (DECs) and Green Deal Assessments (GDAs) are no longer valid routes to compliance. While net zero reporting will not yet be mandatory, you can choose to adopt the new PAS 51215 standards for voluntary energy and decarbonisation reporting. This could give your organisation a head start before net zero requirements arrive in Phase 5.

August 2025 Review

1 September 2025
August Review By Adam Novakovic August was a month that saw the return of domestic football and the return of one of the most prolific energy narratives of the last 5 years, as the conflict between Russia and Ukraine once again dominated the headlines.

Nuclear Regulated Asset Base Levy

29 August 2025
Nuclear Regulated Asset Base Levy: What It Means for Your Electricity Bills From this autumn, UK businesses will see a new charge appear on their electricity invoices: the Nuclear Regulated Asset Base (RAB) Levy. This charge will help finance new nuclear power stations such as Sizewell C, but it also means yet another non-commodity cost will be added to bills. What is the RAB model? The Regulated Asset Base (RAB) model is not new and has been used for decades to fund water networks, energy grids, and other large-scale infrastructure. Instead of waiting until projects are completed, it allows investors to receive steady returns during construction. The aim is to lower the overall cost of borrowing by sharing risk between developers, government, and consumers. In 2022, the Nuclear Energy Financing Act cleared the way for this model to be applied to nuclear energy. The logic is that by reducing financial risk, investors will be more willing to commit to long-term projects. For the government, it helps accelerate the nuclear build-out that is essential to the UK’s 2030 clean power targets. For consumers, however, it means paying towards new power plants years before they produce a single kilowatt-hour and before they can help lower unit rates.

Why electricity prices keep going up

21 August 2025
Why electricity prices keep going up By Adam Novakovic Electricity has always been more than just a utility it is an essential component in every part of UK business. Yet in recent years, costs have been climbing steadily, and today’s bills are weighed down by more than just wholesale market prices. There can be long periods of time where wholesale prices remain stable or decrease, yet the amount businesses are paying for their electricity continues to rise. A large part of the increase comes from policy decisions. Most notably the way the UK has chosen to fund decarbonisation, its reliance on renewables, and its failure to make a serious commitment to nuclear energy.

Back Billing

14 August 2025
Back Billing Recently we have been seeing an increase in suppliers issuing invoices for charges that are more than 12 months old. In this article we will be reviewing why you may not be liable for these charges. What Is a Back Bill? A back bill is issued when your supplier discovers that they haven’t accurately invoiced you. This can be due to missed readings, estimated charges, or issues with obtaining consumption data. These bills can include charges dating back weeks, months, or even over a year, leading to unexpected costs. The 12-Month Back-Billing Rule Under Ofgem’s rules, suppliers cannot charge domestic energy users or microbusinesses for energy used more than 12 months ago, provided that you: Never received an accurate bill for that period (even if requested) Were never informed of charges through a statement of account Had a Direct Debit but it was set too low to cover the actual charges When You May Be Asked to Pay for Energy Consumed More Than 12 Months Ago The only scenario where you could be charged for older energy usage is if the issue is deemed to be your fault. For example, if you deliberately prevented meter access or ignored billing requests, your supplier can back-bill you for up to six years.

July 2025 Review

3 August 2025
July was a month that saw an England international football team lift a trophy and the unfamiliar events weren’t just limited to the sporting arena. For the first time in recent memory, it wasn’t geopolitics and international conflicts that were the main drivers behind movements in the energy market. In this article we review the factors that did cause energy prices to change and how prices are likely to move for the remainder of 2025.

The EII Support Levy (ESL)

29 July 2025
What is the EII Support Levy? As of April this year, a new charge called the EII Support Levy may have begun appearing on your invoices. The ESL has been introduced by the government to fund the Exemption Scheme for Energy Intensive Industries (EIIs). This essentially means that businesses not categorised as operating in Energy Intensive Industries will be offsetting the costs of businesses whose SIC codes do fall under the EII umbrella. This is being done to ensure UK businesses with large energy costs can remain competitive internationally. Which businesses need to pay it? All non-domestic UK energy users who don’t have a SIC code that classifies them as being a part of an Energy Intensive Industry will need to pay it. How the charge is applied will be at the discretion of suppliers with some suppliers yet to confirm exactly how they will be applying the charge.

June 2025 Review

30 June 2025
June 2025 Review By Adam Novakovic The British summer is underway and it commenced with a heatwave, leading to record temperatures during the opening games of Wimbledon. However, energy prices would be largely dictated by events far away from the UK, as a need for cool heads in the Middle East was the primary driver of energy prices throughout June.

The UK's Modern Industrial Strategy

24 June 2025
The UK's Modern Industrial Strategy 2025 Electricity Discounts for Over 7,000 Businesses Thousands of UK businesses are set to benefit from a new government plan to cut energy costs, boost competitiveness, and support long-term industrial growth. As part of the newly launched Industrial Strategy, electricity bills for over 7,000 energy-intensive firms will be cut by up to 25% from 2027. What Is the UK's Modern Industrial Strategy? Unveiled on 23 June 2025, the government’s 10-year Industrial Strategy is designed to stimulate business investment, create over one million skilled jobs, and address key structural barriers that have hindered British industry — particularly high electricity prices and delays in grid connections. Central to this plan are two new policies focused on reducing energy costs for businesses: The British Industrial Competitiveness Scheme (BICS) An expanded British Industry Supercharger programme 

How the Iran-Israel Conflict Could Impact UK Energy Prices

19 June 2025
How the Iran-Israel Conflict Could Impact UK Energy Prices By Adam Novakovic Tensions between Iran and Israel have intensified in recent weeks, prompting renewed concerns across global energy markets — including in the UK. The immediate impact has seen some fear in the markets and prices have risen as a result. Any further signs of escalation that could disrupt global supply routes will likely provoke sharp spikes in wholesale energy prices. Soon after Israel launched initial attacks and Iran responded, the United States distanced itself from Israel’s aggressive military posturing, urging both sides to engage in diplomatic dialogue and to avoid an extended regional conflict. This initial reluctance to support a drawn-out confrontation has helped calm fears of a broader war, however, there have been some indications that the US position could change. If the US were to become more directly involved, then the outlook would worsen considerably. US involvement would increase the probability of ground troops being deployed in Iran, and of a prolonged war. Without prolonged hostilities, the energy market should resume its downward trajectory once immediate geopolitical risks fade. Both Iran and Israel lack the resources to sustain a protracted war without foreign support, and most analysts agree that military actions will likely remain confined to missile exchanges, drone activity, and cyber or intelligence-based sabotage, rather than a full-scale ground war.