UK businesses continue to grapple with some of the highest energy costs in the developed world. Government figures released in September confirmed that British businesses paid more for electricity than any other developed nation throughout 2023. Over the past five years, industrial power costs have soared 124%, with UK electricity prices now:
⚡ 50% higher than in Germany and France ⚡ 4x higher than in the USA
While 2024 saw some easing in energy prices, reductions were minimal, and costs remain significantly higher than pre-pandemic levels.
What’s Happening to Energy Prices?
In recent months, energy markets have faced renewed upward pressure. Several key factors are driving prices higher:
🔹 Low Gas Storage Levels: Compared to 2024, both UK and European gas reserves are much lower. This means consistent demand for gas throughout the year, reducing the likelihood of price drops in summer.
🔹 Increased Global Competition for LNG: With Asia ramping up its demand for liquefied natural gas (LNG), the UK faces higher import costs and intensified market pressure.
🔹 Grid Challenges & Renewable Balancing Costs: With a colder, less windy winter, balancing the grid has required more reliance on fossil fuels, leading to premium costs being passed to businesses.
What Can Businesses Expect Moving Forward?
With storage refilling throughout the year and ongoing demand pressures, energy prices are expected to remain elevated in 2025. While there is potential for stabilisation, this depends on market conditions, geopolitical factors, and the UK’s progress in boosting energy independence.
What Should Businesses Do?
With long-term market uncertainty, businesses must be proactive in their energy strategy. If your contract is up for renewal this year, locking in rates at the right time could make a substantial difference. Enexus Energy can help you navigate the complexities of the market, secure the best deals, and reduce your exposure to volatility.
📞 Call us: 01253 966960 📧 Email us: info@enexusenergy.co.uk 🌍 Book a free energy consultation: https://enexusenergy.co.uk/contact/