30 January 2026

Understanding Weighted Average Price (WAP) in energy

What is the Weighted Average Price (WAP) in energy?

In the UK energy market, Weighted Average Price (WAP) refers to the average price paid for electricity or gas over a period of time, weighted by the volume bought at each price point. For those on flexible energy contract, the WAP represents what the unit rate will be when multiple purchases were made for the same period.

In other words, it answers the question: “What did we actually pay for our energy once all purchases and volumes are taken into account?”

This makes WAP far more meaningful than a simple average, especially in volatile markets.


How WAP works in practice

Energy prices move constantly. Businesses, particularly those on:



often buy energy in multiple tranches at different times and prices. For example:


  • 40% of energy bought at 10.0p/kWh
  • 30% bought at 12.0p/kWh
  • 30% bought at 9.0p/kWh


The WAP reflects the price-weighted impact of each purchase, giving a single unit rate that reflectsthe real cost exposure.


Why WAP matters to UK businesses

1. It reflects real procurement performance

WAP shows how effective your buying strategy has been, not just whether the market went up or down, but how your timing and volumes performed.


2. It’s essential for budgeting and forecasting

Using WAP allows businesses to:


  • Accurately forecast energy spend
  • Compare performance year-on-year
  • Avoid misleading headline prices


This is especially important for manufacturers and high-consumption sites where small price differences materially impact costs.


WAP vs fixed prices


This means WAP can improve with smart market timing and deteriorate if exposure is unmanaged. For those on fixed contracts, it can be vital that portfolios are being managed by a person or group with experience and expertise in energy markets. Ultimately, the strategy of when and how much to buy is just as important as the market itself.


WAP as part of your purchasing strategy

Weighted Average Price is the truest reflection of what your business actually pays for energy. Understanding it is critical to controlling cost risk in volatile markets.

For larger SMEs and energy-intensive businesses, having a clear energy purchase strategy and having this strategy communicated through regular reporting can be vital for forecasting future energy costs.


If your business would like assistance with understanding the current state of your portfolio, or advice on purchasing and management strategies, contact us today to see how we can help lower your electricity and gas costs and help you See More of the hidden value in your energy portfolio.

February 2025 Review

by Craig Watson • 27 March 2026
With consumer spending declining and OFGEM raising their price cap, you would be forgiven for seeing February as a month where negative news was at the forefront, but in the energy markets, this was not the case.

2024 Review

by Craig Watson • 27 March 2026
In a year that began with falling energy prices, there were recurring catalysts that led to prices climbing steadily higher. Geopolitical uncertainty and the perennial threat of escalating conflicts meant fear would maintain a constant presence in the wholesale markets. We will look back at the key energy stories from 2024, and how the energy markets are likely to shape up in 2025. Quarter 1  The year began with cautious optimism as the UK’s gas reserve levels were healthy and prices for the Summer’24 season were in freefall. In February, prices pulled back to their lowest levels since 2021, and for the first time in a while, we identified that there was greater potential for upside risk than for further downward price movement: “ there now (exists) an asymmetrical element of risk should the market encounter a supply-side problem of significance. ” During February we had advised customers on flexible contracts that this was an ideal time for making purchases. March would see prices begin to ascend again as international conflict would create problems with LNG imports, and we would highlight the geopolitical risks as an area for concern moving forwards: “ fears remain and there are potential negative catalysts that could lead to prices rising further, with the main factors to watch out for being based on geopolitical unrest. “ For a business that purchases their energy in advance, this quarter was the optimal time for purchasing during 2024. In February, electricity prices for Winter’25 were down to 7.75p/Kwh, and as low as 6.05p/Kwh for Summer’25. Winter’25 ended the year with prices above 11.1p/Kwh, with Summer’25 prices exceeding 9p/Kwh. For a company that uses 500,000Kwh of electricity per month, the difference between buying at the February low point compared to today’s prices would represent a yearly saving of over £200,000.
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