UK Energy Market Update - Prices Ease as Supply Stabilises - 29th July 2025

Gas and electricity prices ease slightly as summer conditions stabilise

After a period of steady upward pressure driven by heatwaves and tight margins, both gas and electricity prices softened slightly last week. While overall demand remains high due to continued heat, improved supply conditions, stronger renewable output, and steady LNG arrivals helped bring a touch of calm to the market.

Electricity Market: Slight Dip Amid Improved Wind and Gas Price Relief

The UK’s 12-month forward electricity contract slipped to just under £79/MWh, down modestly from the previous week.

Key drivers:

• Gas price decline filtered directly into electricity pricing, as gas remains the marginal price-setter in the UK power market

• Improved wind generation mid-week, reducing reliance on more expensive thermal generation

• Stable solar output continued supporting daytime demand

• Carbon prices remained high but unchanged, holding generation costs steady

• Sustained power demand from persistent heat maintained a tight but stable outlook

While demand remains elevated, the return of some renewable generation helped reduce stress on the system.

Gas Market: Storage and Supply Stabilise Sentiment

Gas prices also saw a modest dip, with the 12-month forward contract moving down to around 85p/therm.

Key drivers:

• No major supply outages, with Norwegian and domestic flows remaining consistent

• Additional LNG cargoes secured for late July, supporting short-term availability

• Asian LNG demand plateaued, relieving global price pressure

• European storage injections continued, narrowing the deficit to just below 10% of seasonal averages

• Reduced gas-for-power demand later in the week as wind generation picked up

Although temperatures remained above average, the improved supply outlook helped shift trader sentiment and ease pricing.

Bright Edge View: A Welcome Pause, But Not a Trend Reversal

This week’s market movement reflects stabilisation, not resolution. Demand is still high, carbon costs remain elevated, and the system is still tight. But with improved storage, better wind output, and calmer global LNG dynamics, there’s a short window of reduced pricing pressure.

If your business is nearing contract renewal, this could be a valuable moment to secure a forward deal — especially with energy still trading below recent highs.

Our Recommendation

We’re advising clients to review their upcoming renewals now while the market offers a little breathing room. Electricity prices are off their peak. Gas has dipped. But the fundamentals haven’t dramatically changed.

Let’s assess your current deal and build a strategy to lock in value — while it’s still available.

Let Bright Edge negotiate your business energy rates & see how much you could save

Contact us today to get started