3 March 2023

‘SeeMore’ Energy Markets: February Review

This February we saw wholesale prices continue to fall. The day ahead market was relatively stable with the price dropping slightly over the course of the last 4 weeks. It started the month at £148/MWh and closed at £127.10MWh representing at 14% decrease in price and returning to levels similar to August 2021. February 6th saw the highest price of £172.50MWh with February 17th seeing the lowest price of £120MWh. This continues the 2023 trend of price steadily decreasing. A meter that consumes 10,000KwH per month would be seeing commodity costs of £1370.50 compared to £3400.30 it would have been paying based on the day ahead price on December 1st. For those who were out of contract in December, staying on the day ahead rates and waiting for prices to fall will likely prove to have been a superior strategy to taking the rates available then.


After a winter that saw reduced levels of gas consumption across Europe, the UK government have made plans to reduce energy costs for specific industries and announce the latest round of Energy schemes.




OFGEM announced that the energy price cap will change from £4279 to £3289 for the April-June quarter. With the level of support provided by the government set to be reduced from April 1st - this could lead to a 20% increase in the bills of the average household. From April 2023 - April 2024 the Energy Price Guarantee is expected to save the average household around £500, whereas a typical household was predicted to save £900 from the price guarantee that was in place from October 2022 - March 2023.


This announcement suggests that OFGEM see the declining price in the wholesale market as something that will be sustained even if wholesale price movements aren’t immediately reflected in the bills most households will receive. 


It is likely energy costs will remain at the forefront of people’s minds for the foreseeable future as it was revealed by The Centre for Sustainable Energy that standing charges have risen by more than 80% in the last year. These price rises are mostly felt when a customer moves from the previous fixed rate contract to a new deal and could come as some surprise to people whose contracts are due to expire in the coming months. Although with the trend of commodity prices starting to decrease, this could go some way to offset the increased price in bills that people can expect to see.


The UK has also felt the impact of higher energy prices in the supply of groceries. Items which previously may have been taken for granted as staples are now facing shortages. Frost in Morocco and Spain lowered tomato production this winter, and - with UK energy prices high - it hasn’t been cost-effective to make up for these supply shortfalls by heating greenhouses. Horticulture was not included in the Energy and Trade Intensive Industries scheme which provides support to specific industries. Although the UK government is trying to offer support elsewhere.

2 November 2026
By Adam Novakovic Energy Markets Consultant Energy costs remain one of the largest overheads for British charities and housing providers. Following the government’s legislation introducing a temporary zero rate of VAT on qualifying domestic and non-business electricity supplies in Britain, many organisations have a major opportunity to cut their energy costs. If your charity or housing association is still paying the standard 20% business VAT rate on electricity bills, you could be missing out on an immediate zero-rating as well as substantial retrospective refunds. The VAT Rate Change Standard commercial energy comes with a 20% VAT rate, with organisations that use less than 1,000KWh/month paying a reduced rate of 5%. Under revised VAT rules, supplies that meet the qualifying 5% threshold are now cut to 0% VAT across England, Scotland, and Wales. These changes are for electricity only – gas retains the 5% VAT rate – and should be automatically applied by suppliers. However, this is only the case for accounts where the correct VAT rate is already applied to the account. In order for this to happen, a VAT declaration certificate needs to be sent to the supplier.
2 November 2026
October Review By Adam Novakovic Energy Markets Consultant  October was a month that saw far more tricks than treats in relation to energy prices. While there were times when the hope of falling prices seemed as though it was on the verge of becoming reality, those hopes never materialised and prices continued to ascend.