24 February 2026

Where Does My Energy Come From?

Where Does My Energy Come From?

It’s a simple question, but the answer is more complex than many businesses realise.

When you flick a switch or power up your operations, the electricity and gas you use is the end product of a vast, interconnected system of generation, infrastructure, global markets and regulation. Understanding where your energy comes from isn’t just a curiosity, it’s commercially relevant.


Electricity: A Real-Time Balancing Act

In the UK, electricity is generated from a mix of sources. The primary contributors today include:


  • Gas-fired power stations
  • Wind (onshore and offshore)
  • Nuclear
  • Solar
  • Interconnectors importing power from Europe


Unlike gas, electricity must be generated and consumed in real time. Supply and demand are constantly balanced by the system operator, ensuring the grid remains stable. If supply ever falls short, then prices can spike. In recent years, numerous grid updates have taken place to ensure that renewable energy can be added to the grid and quickly transported.


While many businesses purchase “renewable” tariffs, this doesn’t mean the electricity you receive was generated by renewable sources. Electricity on the grid is pooled, so you don’t receive electrons directly from a specific wind farm. Instead, suppliers match your usage with renewable generation certificates (REGOs), demonstrating that an equivalent amount of green power has been produced.


For larger energy users, the mix of generation matters because it directly impacts wholesale pricing. An evening with low wind output, for example, can significantly increase reliance on gas-fired generation, therefore increasing exposure to the wholesale price of gas.


Gas: A Global Commodity

Gas plays two roles in the UK energy system: Heating homes and businesses directly, and fuelling many power stations that generate electricity.

The UK produces some natural gas domestically from the North Sea, but production has declined over the years. Today, a significant proportion of supply is imported via:


  • Pipelines from Norway
  • Liquefied Natural Gas (LNG) shipments – particularly from Qatar and the US
  • Interconnectors from continental Europe


Because gas is traded globally, UK prices are influenced by international supply and demand dynamics. Events in Europe, Asia or the US can directly affect what UK businesses pay. This means geopolitical events such as the threat of war in the Middle East can cause prices to rise sharply.


Renewables and the Energy Transition

The UK’s generation mix has changed dramatically over the past decade. Coal has been phased out, while wind and solar capacity have grown significantly.

This shift brings both opportunity and volatility. Renewable generation lowers carbon intensity and reduces exposure to fuel imports. However, because wind and solar output depend on weather conditions, short-term price fluctuations have become more pronounced.

For businesses with flexible procurement strategies, understanding this dynamic can create opportunities to secure more competitive pricing.


Why It Matters for Your Procurement Strategy

Where your energy comes from can influence many other aspects of your energy strategy, including:


  • Wholesale market pricing
  • Carbon reporting obligations
  • Contract structures
  • Long-term risk exposure


Understanding where your energy comes from has never been more important for UK businesses.


If you want to understand how the current generation mix and global gas markets are affecting your upcoming renewals, SeeMore Energy can help you interpret the landscape and see what options are currently available for you.

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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