Market Update: Price Trends & Procurement Strategy

Wholesale Market Movements In late April, day-ahead electricity prices experienced a significant increase of nearly 10%, reaching £86.25/MWh. This surge was attributed to reduced wind generation and increased post-holiday demand. Gas prices remained relatively stable at approximately 84 pence per therm. Businesses approaching contract renewals should monitor these trends closely to secure favourable rates. (Weekly Energy Market Update (22–25 Apr 2025))

Industrial Energy Costs

 The UK continues to face high industrial energy costs, currently 46% above the International Energy Agency (IEA) member average. This disparity is impacting business growth plans, with 60% of UK companies citing energy costs as a barrier to expansion. (Rising energy costs undermine British companies' growth plans)

Infrastructure & System Updates

Grid Connection Reforms Ofgem is set to confirm major reforms to grid connections, aiming to boost investment in energy infrastructure projects. These changes are expected to streamline the connection process, benefiting businesses involved in energy development. (UK's energy regulator to confirm electricity grid reforms - Reuters)

Eastern Green Links Project Construction has commenced on the Eastern Green Links, two high-voltage direct current (HVDC) submarine power cables connecting Scotland and England. Once completed, these links will enhance the UK's electricity transmission capacity, supporting energy distribution across regions. (Eastern Green Links)

Strategy Focus: What Your Business Should Do Now

Review Energy Contracts With fluctuating market prices, it's crucial to review existing energy contracts. Consider negotiating fixed-rate agreements to mitigate potential cost increases.

Assess Energy Consumption Conduct an energy audit to identify areas for efficiency improvements. Reducing consumption can lead to significant cost savings and better budget predictability.

Stay Informed on Policy Changes Keep abreast of regulatory developments that may impact energy procurement and compliance requirements. Proactive adaptation to policy shifts can provide a competitive advantage.

How We Support Businesses

At Birchwood Energy, we specialise in helping businesses navigate the complexities of the energy market:

Contract Negotiation: Securing favourable energy contracts tailored to your business needs.

Market Analysis: Providing insights into market trends to inform procurement strategies.

Regulatory Compliance: Assisting with adherence to energy regulations and identifying opportunities for incentives.