November Review

3 December 2024

November Review

By Adam Novakovic

November 2024 saw the US choose a new president, Austria refuse to pay for their gas imports, and the UK set a record for importing more energy than ever before. While some of the news this month was novel and unfamiliar, there was a sense of Déjà vu in the factors keeping energy prices high. With international conflict and inaccurate forecasts from meteorologists being the prime culprits.


Wholesale energy prices had dipped in the final days of October, but any hope that this trend would continue into November would be short-lived, with the 1st of November marking the lowest we would see gas and electricity prices for the entire month.


While prices did continue to rise on geopolitical uncertainty and fears of gas reserves being used at a higher than anticipated level, there was some good news from the US.

Earlier this year Joe Biden had put a pause on all LNG export permits in an attempt to appeal to the green voting bloc. However, Donald Trump was quick to announce that one of his first actions when he re-takes the role of president will be to lift the ban on US LNG exports and approve pending permits. This is very bullish news for European energy consumers who had been forced into LNG bidding wars with Asian countries undergoing heatwaves for much of 2024.

Trump’s election also seems to offer an increased likelihood of a cessation of conflicts between Russia and Ukraine. A change of sentiment from the west towards Russia could lead to quick negotiations to secure the transit of Russian gas to Europe for 2025.


One of the main factors behind rising energy prices throughout November was the colder than predicted weather. Forecasts of mini-heatwaves in the first few days of November had changed to reports of 18 inches of snow less than days later. The Nordic jet stream responsible for the colder weather caused some fear in the energy markets. With reserves likely to be depleted sooner than previously anticipated, there were concerns about whether the UK and other parts of Europe would need to make additional gas purchases in the coming months.

The cold weather was also compounded by a lack of wind. This lower-than-expected electricity production from wind turbines only increased the fear in the market and aided prices in rising higher.


On the continent, it wasn’t just cold weather causing issues. Austrian energy giant OMV had been awarded over €200m in arbitration against Gazprom for irregular supplies. However, rather than waiting for the Russian energy giant to make the payment or entering negotiations, OMV elected to seize Gazprom’s Austrian gas supplies in lieu of payment. This caused Gazprom to cut supplies to OMV and Austria. OMV had a contract in place with Gazprom until 2040 -- one of the few remaining significant contracts Gazprom has in Europe – but now it seems as though this contract is likely to be terminated. This deal had seen Austria receive gas at prices far below what other EU countries had been paying for gas, but it now seems as though they will have to find alternative sources to make up for this lack of supply, adding further competition to the demand side of the energy market.



Outlook


Gazprom remains a key part of the energy landscape as we look forward to the factors likely to influence prices in 2025. It is believed that the Russian company are planning on completely stopping all gas transit through Ukraine. While there has been talks of this gas being rerouted via Azerbaijan, so far no alternative is in place, and the loss of the gas from Russia has been largely priced into the current market levels. Should there be any news of a U-Turn from Gazprom, this would likely lead to a drop in prices as the supply picture would notably improve for Europe.


One way the supply picture looks almost certain to improve is the previously mentioned imports from the US. With the US having a large quantity of LNG – with more due to come online in the coming years – the option for importing from the US will be seen as a big positive for Europe and likely lead to 2025 energy prices heading down from their 2024 levels.


After dealing with colder than expected weather than may be some sense of positivity regarding how well European nations have dealt with the unanticipated increase in demand. Reports show that European reserve levels still sit close to 90% and this may lead to less of a knee-jerk reaction should there be another event causing gas demand to increase above predicted levels.


For those who have contracts expiring in the coming months there seems to be a couple of options available to you. At the moment it seems prudent to hold off as long as possible before signing a contract – especially if it is a short-term contract – or alternatively, looking at slightly longer-term contracts that will have the expected 2025 drop in prices already factored into the unit rates.

However, it is wise to have as much awareness about the available options as possible, and if you would like us to conduct a free market review on your behalf, contact us today 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.