UK Energy Market Update - Prices Ease on Strong Renewables and Gas Supply - 12th August 2025

Wind generation and steady gas supply pushed UK energy prices lower last week. See what’s driving the market and why now may be a good time to review contracts.

WEEKLY ENERGY MARKET INSIGHTBUSINESS ENERGY

8/12/20251 min read

Wind power lifts renewables share as gas and electricity prices ease.

Last week saw a slight softening in both UK wholesale gas and electricity forward prices, as strong supply fundamentals and high renewable output helped keep market sentiment stable. While nuclear outages maintained a mild premium in forward winter contracts, risk premiums overall remained contained.

Electricity Market: Renewables Take the Lead

The 12-month forward baseload electricity contract dipped slightly, tracking the easing in gas markets.

Key factors:

High wind generation regularly exceeded 40% of UK supply, pushing prompt prices into the £50s/MWh range on several occasions
Reduced reliance on gas-fired generation due to strong wind and steady solar output
Ongoing outages at Hartlepool, Heysham, and Torness nuclear stations continued to limit baseload capacity, adding a small premium to forward winter contracts
Seasonal summer demand remained typical, with market attention now focused on winter demand forecasts

Gas Market: Strong Supply and Storage Keep Prices in Check

Gas forward prices eased, supported by a combination of healthy storage, steady pipeline flows, and adequate LNG send-out.

Key drivers:

Consistent Norwegian and domestic pipeline supply kept system balance strong
LNG send-out held at around 9 mcm/day, with volumes lower than spring but sufficient for seasonal demand
Early-week cooler weather briefly increased demand before easing later in the week as temperatures returned to seasonal norms
Forward curve in backwardation, with longer-term contracts priced lower than near-term

Bright Edge View: Stable Market, But Watch for Winter Shifts

Both gas and electricity prices are benefiting from robust renewables and strong supply fundamentals, keeping volatility at bay for now. However, mild premiums in forward winter contracts show the market is still mindful of potential risks from nuclear outages and geopolitical tensions.

For businesses with renewals approaching, this is a favourable moment to explore forward contracts while prices are stable, especially before the market pivots to winter-driven pricing.