Wholesale electricity rose 22.8 per cent in August, and gas 16.8 per cent. Those are big single-month moves, but they are not the number that should shape a budget.
This is the year:
Electricity has almost doubled in twelve months. The chart sets last September at 100, and August closes at 199. It climbed through most of the year, with dips in February, April and June that each gave way to a higher high.
Gas took a different route to a similar place.
Gas spent the autumn slightly below where it started the period, then stepped up sharply in March. That break is the clearest thing in the series, and gas has not been back below its pre-March level since. It finished the year at 190 against a base of 100.
Both charts track the wholesale market rather than anything a business pays. A delivered price also carries network charges, levies and supplier costs, and it is set on the day a contract is signed rather than moving with the market, so your own price will not have moved by these amounts.
What sits behind the move
The honest answer is that no single month has a single cause, and anyone selling you one is guessing. What can be said is how this market transmits pressure, because that is what makes gas and electricity move together.
Gas-fired power stations usually set the price at the margin in Great Britain. When they are the last plant needed to meet demand, their running cost becomes the wholesale electricity price for that half hour. So a gas market under pressure pulls electricity up with it even when very little of the power is coming from gas.
August shows that split clearly. Wind supplied 27.5 per cent of metered generation and gas 26.0 per cent, with solar adding 15.1 per cent. Renewables produced more than gas did, and there were 10 half-hour periods where prices went below zero because supply outran demand. None of that stopped the monthly average being the highest of the year, because price is set by the most expensive plant running, not the cheapest.
Three things move the underlying gas price: how cold it is and therefore how much is burned, how much is in storage and arriving as LNG, and whatever is happening in the countries that supply it. They are not independent of each other, and their weight shifts month to month.
Should I fix my business energy now?
It is the question this data gets asked most, and a market average cannot answer it. Whether fixing is right for you is a question about your contract, not about the market: your dates, your usage and what your current rate actually is. Two businesses reading the same figures on this page will sensibly do opposite things.
So we will not answer it in a blog post. We will answer it for you, with your numbers in front of us.
A quote issued now is priced off a market that has been climbing for most of a year. For an expert conversation about the options for your business, ring us on 01709 874506, or get a quote to see what your usage prices at today.
If your contract is near its end date, what happens when your energy contract ends covers the mechanics, and business gas and electricity explains how we work.
