UK Energy Market Update - Markets Steady, But Winter Risk Premiums Rising - 30th September 2025

UK gas and electricity prices held steady last week as storage stayed strong and demand mild. Forward contracts still show winter premiums. Read Bright Edge’s update.

WEEKLY ENERGY MARKET INSIGHTBUSINESS ENERGY

9/30/20251 min read

Markets steady, but winter premiums remain in play

UK wholesale gas and electricity markets remained stable last week, supported by comfortable supply fundamentals and mild autumn weather. Renewables made up around a third of supply, while imports from France and Norway covered another 15%. With European storage near record levels, volatility was contained, though forward contracts continue to reflect cautious risk premiums ahead of winter.

Electricity Market: Renewables Steady, Imports Fill the Gaps

Day-ahead baseload electricity prices averaged around £84/MWh, rebounding slightly from the prior week’s lows.

Key drivers:

Renewables provided ~34% of supply, though variable wind output meant more reliance on gas-fired power
Imports averaged 4.3 GW (15% of demand), mainly from France (2.9 GW) and Norway (1.4 GW)
Carbon prices fell (EUA –2%, UKA –6%), slightly easing marginal generation costs
Demand remained mild, with peak levels in the low-30s GW — below seasonal norms thanks to warm, sunny conditions

Forward contracts for Q4 2025 (~£80.5/MWh) retained a mild winter risk premium, reflecting potential supply and demand shifts ahead.

Gas Market: Flat Trading, Winter Premiums Creep Higher

Gas prices were effectively unchanged, with the NBP day-ahead averaging ~79.5p/therm.

Key drivers:

Steady LNG send-out (~10–14 mcm/day) offset reduced Norwegian pipeline flows during maintenance
Mild temperatures delayed heating demand, keeping residential consumption soft
Gas-for-power demand rose when wind generation fell, balancing the system
European storage remained near record highs, limiting upside pressure

Despite stability in near-term prices, seasonal forwards edged higher, with Winter 2025 trading near 83p/therm, as traders priced in seasonal risk.

Bright Edge View: Calm Before the Seasonal Shift

The market is balanced for now — strong storage, steady LNG, and mild weather are capping volatility. But with forward contracts already building in risk premiums, it’s clear traders expect tighter conditions as colder weather approaches.

For businesses with contracts expiring in the next 6–12 months, now remains a sensible time to review options before winter volatility sets in.